Traders and Investors are two sides of a coin.
As you flip the coin you get to know on which side or category you belong or fall. You must have heard the phrase people saying he or she has a Trader or Investor Instinct which means what are their gut feelings and how they respond to the market conditions. Traders and Investors both seek profits from the markets. The only difference is between the techniques of doing so. Let us go a bit in-depth!
First, we have to understand how the investor and trader work and what both these terms signify in the financial world.
An investor (the name itself suggests) works in longer time frames by buying, selling, and holding the securities. They look for the return on their investment on annual basis and are not bothered with short-term fluctuations. Investors put a certain amount of savings into the markets for a long period which leads to impeccable returns on their investment and capital appreciation which everyone wants and plans to do so.
On the contrary, Traders mean that they take advantage of both the situations in the market it may be rising or falling they can swing in both directions and are not concerned with a long time view. They do not hold securities for long they just quickly crack the deal by frequent buys and selling many times in a day. They also look out for weekly or monthly returns on the capital invested and do not plan for annualized returns or plans of capital appreciation in long term.
Both of them have different aspects on which they can be monitored to consider which side you want to fit in as per the requirements. But in general, what we have observed is that people enter this industry considering themselves to be traders and make it a side income so that they can get fixed returns from it but what the situation brings them in is that they buy some securities of a company considering it will rise and they will book profits and look for other trade but if it does not happen as planned means if the price of the security falls then they make it a long term investment and hold it for long periods thinking that it will be profitable in long term, and people become an Investor instead of Trader. The reason for this turn out is because when you think of entering a trade you do not have a clear view that this would be investment or trade due to which this happens you need to decide earlier only and think of the target and stop loss when you have taken the stock that this is only a trade and not for investment purpose then you need to take action swiftly. And also I would suggest if you are a person who has anxiety with the speculations then you are not a trader and should go for safer options look for good investment options.
So summing up I would like to say Investor and Trader both are safe , good but all you need is to decide that what suits your investment in quality stocks for long period and not getting affected by small fluctuations or Trading frequently and having the capacity to bear losses as well but in a planned manner.
