Stock Trading And Stock Investing

Stock Trading

Some of us use 'invest' the stock of words and 'trade' stock interchangeably. Trading also requires investment. But if you look closely, 'trade' and the two terms 'investment' will appear in different lights with different connotations.

The exchange system is a rapid and transient process, 'investing' involves a long-term process that involves patience and perseverance. We most often use the phrase investment property rather than real estate trading, because it involves real estate 'buy and hold' the estate for an appreciable period of time. Real estate can not be traded like stocks on trading day. Similarly we do not say 'day to invest'. Let's say trading day. Trading involves the buying and selling in a short span of time. The element of waiting is inherent in investing. We invest in the education of your children.

Although stock trading seems to be an attractive option to make easy money, most people fail to achieve their goal of becoming rich quick. Instead of making money these people end up with losses.

It should however be noted that the reasons for failure to make money are not in the nature of stock trading. They are found with merchants. Stock trading, or, for that matter the trading day is a business full time. It is not gambling. Stock trading is a very unpredictable business. If it could be predicted by rules, follow them all and become rich. Of course, there are some basic rules that must be learned and followed to start trading shares. But basically it's like the game of cricket. The players do not know which way, to what angle or height, or how fast the ball will come. The successful cricketers develop intuition to address the cricket ball is approaching.

As with any other activity or game, you need to learn the ins and outs of stock trading. Stock market needs investment of time and money to acquire knowledge, skills and experience. These intellectual activities can not be acquired overnight. These virtues are necessary to develop a fast and intuitive strategy to deal with unexpected developments, such as increases or falls in stock prices, it should be noted that intuition goes where the rules do not work.

To be a successful stock trader, you must have a killer instinct and an eye of a hawk. You need to be disciplined and resourceful. You must learn to anticipate trends and thinking in advance. Livestock trade can not be done on knowledge borrowed or tips and tricks of the experts, gurus and experts. Need to develop their skills and their own responses to situations emerging trading.

Stock investing

As previously mentioned, stock investment involves long-term process. Have specific objectives. As traders try to 'time' the market by buying stocks when they think the market has reached its lowest or their sale, when it peaked, stock investors usually are not moved by these fluctuations . I should note that since the market fluctuations are unpredictable, a lot 'of traders suffer losses. Billions of dollars are lost each year to 'timer' on the market that get things done the wrong way.

Investors archive, on the other hand, patiently wait for weeks, months and occasionally years to reach their targets. E 'was observed in a study on the performance of Standard & Poor's 500 Index between 1926 and 1987 that the 500 SandP returned, on average, approximately 9.44% over the 62 years from 1926 until the end of 1987. It 'was, therefore, determined that "the general direction of the stock market has always been and that is likely to continue in this direction unless something very frightening is happening in the world."

There are some time tested strategies to build solid equity portfolio;

or Always buy the stock of well-managed businesses and keep them all the time in which to continue to grow.

Set aside or a certain amount of regular investments and not be influenced by short-term fluctuations of the market.

o Try to always buy when the market is at its lowest.

Or Reinvest your earnings to get the benefits of compounding.

o Do not put all your eggs in one basket. Diversify your investment in at least 8-10 stocks.

or start to invest now. Do not wait for a better time to come .......