Topic: Could there be a line of similarity or difference between trading and investing? (Read 217 times)

Just like how the narration of this thread goes, I found myself—in a discussion with some friends few days ago—reflexively debating on this topic. My argument was that trading in itself is a form of investment; checking the meaning of investment from the dictionary made my point more stronger and it seem to me like I was absolutely correct. Only for me to later find out that my Ideas were layman's. I realised that there are two ways to see investment and trading, Layman perspectives and Professional's (Economic).

English Dictionary says: Investment is the action or process of investing money for profit.

Wikipedia reiterate: Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.

Thinking from the 2 definitions provided above, I feel it's correct to say that investment and trading are the same since they both involve Inputing a capital in expectations to make profit, this perspective I will call a superficial one. In Economic perspective, not everything that is been invested(whether time, money or/and energy) in, is regarded as an Invesment, for example, investopedia says here that Education can not be classify as an investment (in the Economic perspective), even though education is a form of investment, it is regarded as goods that offer benefit.

Now, it has been clear that trading and Investment might be synonymous, but the financial world draw obvious lines between the two; the basic differences are:
(1) Time: Investment is long-termed, it spans several years (few years to even decades) while trading happens in a short period of time compared to investment, even though trading is also classified base on its time of occurrence (Position trading, Swing trading, Day trading and Scalp trading).
(2) Risk: it is studied that the level of risk in investment is low compare to that of trading possibly owing to the fact that investment takes a long time compared to trading.
(3) Profit: one other thing that seem to differentiate this two is the overall profit, investment attract greater income (profit) while in trading, it is the opposite. Traders mostly seek to make profit within a short period of time so the profit is small compared to that of investment.
You can read more on investment and trading here, this also highlights forms of investment.

trading: Uncertain profits can be sure when you know what to do. use good strategy and analysis. There must be a target to be achieved when trading, short term, mid term or long term.

Investment: Profits may be certain. But in reality the actual investment benefits will not be certain either, because before making an investment you must do research, what project you want to invest in, because if you choose the wrong investment there will be no profit, just wait and keep waiting. Investment is also included in the long term strategy.

The most important thing is to use money that you won't need later, trading and investment are both profitable, it's just a matter of how to manage everything properly.

Trading and Investing are not the same even though they have the same profit making at the end the beginning are very much different.

Trading: You are involved in the buying and selling of goods to customers and make profits. Example: You go to the MARKET and buy the goods and come to your shop and sell. So in bitcoin you buy the asset and sell it out to another person.

Investing: You give your money to someone else to do business and at the end you will be rewarded with the specific amount that were agreed upon. Example. You gave $50 to someone and told him to give within 5 days with the sum of $70.

Trading: the profit is not certain
Investment: the profit might be certain.

Usually in investing you have one exit target and you'll get out when it hits, this is happening in very long time frame, if you sell some during your exit and price goes down and you buy some more, you are low frequency trader. Mid/high frquency traders buy and often using technical analysis oncharts, they can also short and long with leverage to make more gains if they are skilled enough.

Similarity are quite simple:

-You both need to spend and risk money.

-You need to be patience cause those two are still not guaranteed profits.

-You need to study both for investing you need to study the project or platform you are gonna put your money is while on trading it should be broad and must have knowledge and experience on how to analyze technical parameters.

Anyway mostly here answered you the easiest way not to get confuse on both.

Its a very close definition to me. Some will even call it a gamble. When you invest in BTC and hold it as savings, it means you are betting that the price of BTC to go up in value and sell. But its also the same thing as trading because you are also making money upon selling it. A very fine line I think but for someone who wants to make money, it don't matter.

It probably will matter on who you are talking to. If you are talking to a kid, you might likely just say you are investing.
Talking to a Thug, you'll be betting.
Talking to a pro investor, trading.

Investing: intended to be mostly span for at least a year or longer.
Trading: mostly spans for as short as a few seconds, to around a few months or so.

There are really no super strict definitions; but sometimes it mostly depends on intention. I could buy something as an investment, but after just a few weeks I change my mind and I sell it. By definition it's a trade, but by intent it's an investment.

There are similarities between trading and investment 

• Purposes: get profit. Whatever methods or strategies you use for trading or investment, your final purpose you aim it is profit
• Net result: The most common net result is loss. Because in the market (not only in crypto market), the Pareto principle still works so you can imagine that there are 80% losers and only about 20% of traders or investors are winners
• Emotional effects: Both trading and investment can be seriously affected by emotion

Fortunately, if you have a good strategy and accurate method to filter potential good projects, you will reduce risk of loss and also reduce emotional effects for your investment. So in my opinion, investment is better than trading!

Trading and investing are not the same. But they have similarities. In the first place, both start with buying. However, there's the difference in terms of time-frame in that trading involves shorter periods of time while investing involves a longer period. There's also the difference of activity because trading requires that you constantly make orders while investing is more or less passive. There's also the difference in terms of the goal because in trading you are after the small movements of the prices while in investing you are oftentimes just setting months, years, or decades for growth of value.

This is what I've understood...

Trading - a way of earning money through buying and selling quickly. And a person who does this calls themselves a trader.
Investing - a way of earning money through buying and selling in long term.

It literally differs in the time frame and all of these earning strategies work so well but they are accompanied by risks as well.
Not really a thing to argue as we have different opinions about them.

 * https://trading.info/what-is-trading/

When speaking broadly, trading means frequently buying and selling and getting profit from the difference between prices. While investing means putting money into something to get profit, not limited to just selling at thigher price. It could be dividends from a stock, buying real estate to become a landlord, investing in startups to become a shareholder and so on.

But when it comes to crypto, investing is just long term trading, because crypto doesn't have cash flow.

The only similarity I can see is that both requires some initial funds.

Investing is more or less limited to just one direction: a growing market. Buying the asset to sell it later at higher price.
However investing in PoS coins can be profitable within some small price drop as well (because due to staking you will probably own more units of the asset than you originally bought)

But trading offers two ways to make profit as margin trading allows you to "sell" stuff you don't even own (had bought) so you can make profit on price dropping asset as well.

I would say the main difference is that active trading requires constant oversight (either manual or using scripts, bots etc.) and changing/updating positions to maximize the profits (or cut loses) while investing is more about few buy actions and waiting for good sell opportunity.

sum up:
Investing => targeting only continuously growing assets (or assets you believe is going to grow in future )
Trading => asset itself is no so much important, it's more about watching it's market behavior ( price fluctuation, volume ) and your reactions.

Trading is very different from investing.

If you are trading, you an open position or buy coin for just some minutes, hours (scalp) or for a whole day (day trading) or weeks (swing trading). If you invest, you can hold for example bitcoin for 6 months which is short term investment or for years like 3 or 4 years.

Trading and investment are very different.

Trading is very risky than investing.

If you see a a person that invest for example in bitcoin which is a safe asset to invest, the price can fall and the person is comfortable with it because he knows the price will rise back. But if a trader is not professional enough, they always lose, they panic and close position or sell in a way they will lose. The worst part of trading is leveraging, some traders will leverage to open a position, before they will kown, the exchange will send them message that their liquidation is 80% near and their money will be liquidated after the price of liquidation is reached which is most likely. This is common to high leverage traders that are not experts.

People can say investing is not gambling for new investors but trading is gambling for new traders, losing is certain in trading for beginners unlike investing in coins like bitcoin after some correction which the market will still rise again and the investor will make profit.

In investing, you're buying an asset because you have confidence and think it'll do well.

For trading, you're buying an asset with the intent to sell it later on (it could be an underlying asset or a contract/agreement - like futures trading is).

Where the lines come in is when you sell an asset you've invested in, you might become a trader. If the asset does badly for example and you sell after it's dropped (expecting it to drop more) and then you start buying it again after it's dropped further in increments then you might become a trader. If you apply a more advanced strategy to investing, it might be considered trading by some (such as accumulating an asset at a low rsi and selling after a certain amount of a correction).

I came across some persons having a random discussion, then in the process they delved into trading and investment discussion which later tend to lead into a sort of argument about trading and investing, which some argued that trading is quite different from investing.

I still can remember one saying that there's a thin line in similarly in terms of the aim in both but,  between a very big difference exists.

So I found it of necessity that I should drag this discussion to the forum so people here could shed more light on this.

So as to enlighten some of us darkness on the similarities or difference that exists between both.

Possibly this could help elucidate some of the newbie's and even myself as a Member.

Thank you!