
Trading vs Investing
Trading is based on technical analysis, whereas investing focuses on fundamental analysis. Fundamental analysis looks at the actual facts of the company and the market, whereas technical analysis analyses price, volume and other market information.
For example, technical analysts will use charts and indicators to determine the direction of the price. They believe that a stock price leaves a footprint known as pattern. Most traders relies on patterns to predict the direction of the price. In addition, trading is based on short-term gain (less than a year), whereas investors focus on long-term gains (more than a year).
Traders believe that holding a stock for a long period of time is risky and investors also believe that buying and selling stocks the same day is risky. However, we believe that trading provides a better visibility of a stock than investing. For example, when driving in fog it is often difficult to see few miles away (investing) but you can still drive if you focus on what you can see now (trading).