Hey Steemians,
Participating in the stock and crypto market, Trading and Investing are two terms you should be familiar with. Differentiating both in context of vision and time investment, the only goal common in both of these fields is making money and grasping the best of experiences. All in all, both trading and investing are important for the market to function properly. A person can be a trader or an investor but he can act partial too and can choose both the field for self. Traders choose the best of stocks and coins in the market and keeping a keen eye on the trade, they plan to enter as well as well exit with booking small or huge amounts of profits, depending on market trend. On the other side investors concentrate on their purchases to be their assets for as far as possible to book maximum amount of profits from their trade.
- Initial Investments & Risk Factors!
Though money levels do matter when it comes to investing, a huge sum is required generally to make a planned and long-term investment. But Futures Trading doesn’t involve a huge investment; it can be done on small and low levels of profits to achieve satisfaction. The best examples for such trading can be set by its type known as Future/Intraday trading in which a margin amount of money can be invested to make small profits and the money can be invested for as short as seconds or maybe hours. Investing doesn’t involve short levels of profits. If a trader finds 5% margins of profit as a success then investor generally thinks of 5 times the profit out the money he has invested. Walking through risk levels, trading involves way more risk than investments. Market fluctuations on day to day basis are very high whereas investments are planned and long-term with a vision of the stock/coin to achieve high levels in their value which decreases the risk to minimal.
- Either Act Swift Or Be Patient!
Trading involves some principles including patterns of supply and demand which is closely observed to determine where and how the investment goes. Other principle that does matter is the price pattern involving history of a particular stock/coin which helps in predicting future movements. Investing has its own sets of principles. Unlike traders, Currencies and Commodities are added by investors to their diversified portfolio. Long-term thinking and planning focuses more on the success rate than profit booking that would be achieved via choosing the best of the coins/socks & HODLING them. The investor should be smart enough to act according to the market swings. William O’Neil once said. “Letting losses run is the most serious mistake made by most investors.”
- Are you always available!
Traders should always have a sense of involvement. Trading can be preferred because term views are usually matched. Engaging in social media has made it even more approachable to the latest updates. Predictions are less likely to be true in case of trading as it involves huge risks as well as the panic created by surroundings due to market volatility. Investing can also be preferred because it doesn’t need a person to be active every single minute as there are no open positions that needs to be closed at day end. So investing doesn’t really need your 24x7 attention as trading does.
- Real Incident Reported!
Nearly 6 months back, one of our friends bought 2 BTC at the price of around $5,000 each to enter the crypto market. His sole purpose was to make more & more money out of his investment. So he transferred the entire amount to the exchange and started trading. Soon he converted himself to a hardcore trader and started having quick decisions for entering & exiting the new coins on the basis of their market capital and candle movements on the exchange graph. With all the efforts and hard work of six months, he enhanced his account value from nearly $10,000 to 22,000. During this time frame, he made many right decisions as well as wrong too. Sometimes he gained good profits from his trade but many a times he had to book losses from the trade to switch in another coin too. He has to devote nearly 12-14 hours a day as well as attentiveness round the clock. Now has he been a HODLER, Bitcoin touched $20,000 during this time span and he could have easily made $40,000 from his 2 BTC ($10,000) investment. But that too could be a case of luck as BTC rise too time during this time.
What if I had started with 2 BTC investments? In my opinion, I would have chosen the midway via holding 1 BTC for the investment and make diversified trade with another 1 BTC. Not sure what profits or losses I would have made but certainly that would have been my approach. I would convert my trades into long term investments to make higher profits if that has been the need of the hour.
- Choose Wisely! My Thoughts
Both investing and trading are good & bad; all it depends is amount of time and patience level you can devote in it. Both the patterns can help you make a lot of money and can be dangerous enough to lose everything as well. You should be active enough to buy a stock/coin on the right time as well as exit and book profits too. You carefully need to choose tips & research, business channels & the accurate timing for entering & exiting the market. Happy Trading & Investing!
I think long term position even if u are available lot of time is better
Completely agree @piotras..
Whatever it is, don't invest if you can not afford to lose. Thanks @pkalra for sharing this article. This is a fact that everyone should learn. :-)
Great advice @andyjim
Top Cryptocurrencies Pending Price Target and their due dates//
https://steemit.com/cryptocurrencies/@salahuddin2004/top-cryptocurrencies-pending-price-target-and-their-due-dates
how do you think about bitcoin prices that the end of this there is a decrease,
What is your opinion?
In my opinion, there are many other options (altcoins) where you can stay invested for good profits @pujaisma
In a strong bull market Hodlers is probably the most efficient & profitable way to make money, however a trading mentality as a Hodlers can be more profitable as charts always give you early clues when the bull market is over. SO getting out and even going short can be more valuable than a Hodler. Therefore combining the best of both is more profitablein the long term.
Surely whatever suits you is the best strategy for you! Many factors decide for your trading calls, plan them wisely @crushthemarket
LOL ;) @karolynaz
Thank you for your insights. I personally believe that, on a long term, traders will probably be more successful as they jump out at dips, buy low again and sell high in between the rise. I personally hold #ripple if I had sold at ATH and jumped back in yesterday, I would probably be at 600% profit, now since I hold i am at 100%. You were right though writing that the price for this is extremely high and, I also agee, I am not willing to pay this.
Wish you the best for your investments @bitcoinquest
I disagree about saying investing is minimal risk whereas trading is a lot of risk. It's about sizing and asset allocation.
If you invest a large percentage of your portfolio into one coin, that can be a large risk as your downside can be great if its price falls.
If you're trading, and you size your trades appropriately, you choose your position size such that your risk is a set percentage, for example 1% or 2%. If you trade then you should be using stop-losses, to set that particular percentage.
Also, you have to determine when a "hodl" investment is a good "hodl" or one of those cases of "letting your losers run", otherwise there's a contradiction there. In saying that, not all "hodl" investments are good ones.
Another point is opportunity cost is often forgotten with risk. You risk opportunity cost if you invest in a coin that takes a relatively long time to rise in price. Long term profits are always more obvious in hindsight.
Never mind, everyone can have different opinions mate @danaltstream
As long as you are making money from your strategy, your strategy is right for you!
I prefer to be hodler, since I don't have much time to watch market, so I prefer to study the project behind the coin and them invest in the most visionaries. However, be trader could give a lot of money for people whose have time to watch the candles sticks.
Well said. Cheers for being a HODLER @robertoueti
This post has received gratitude of 8.26 % from @appreciator thanks to: @pkalra.