INVESTING vs TRADING: Differences

After understanding the clear similarities between Trading and Investing, it’s also essential to understand their differences as well.

Here’s how they differ from each other:

- Time Horizon: Trading has a short-term focus, often ranging from minutes to months, while investing has a long-term perspective, stretching over years or decades.

- Risk Tolerance: Trading is generally riskier due to its short-term nature, whereas investing aims for long-term growth and is typically less volatile.

- Strategies: Traders use technical analysis and may employ leverage, while investors rely on fundamental analysis and often prioritize diversification.