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<div class='featuredimage'><img src='https://coinsnotebook.com/wp-content/uploads/investment-600.jpg' alt='investment-600' /></div> What Is The Difference: Investing VS Trading 
By <a href="https://EzineArticles.com/expert/Charles_R_Woods/2292994" target="_blank" rel="noopener noreferrer">Charles R Woods</a> 
 
Investing vs Trading: What is the difference? 
 
This is a commonly asked question that beginners have when they want to start managing their own brokerage accounts. Since most people are interested in stocks, I will use equities to explain the difference between these two strategies. Realistically, this goes far beyond equities, and there are many investment or assets types that I could use as an example. 
 
What is an Investor? 
 
A simple explanation of an investor is someone who buys stock in a company to make money off the companies operations. You commonly hear the terms Dividend Investor or the Buy and Hold Forever Strategy. This is someone who buys a stock because they think the company has the potential to grow in the long run. In macroeconomics, the long run is defined as over a year or more than one operating cycle. An investor will have a long-term outlook and some investors like Warren Buffet will buy and hold the same company for a lifetime. 
 
What Does A Winning Investment Look Like? 
 
A smart investor will look at the accounting and the fundamentals of a company because that is the way to see how a company has done in the past. Then they can speculate on how this company will do in the future. 
 
The fundamentals of a business can be anything that gives a business an edge over their competition. For some companies, this won&apos;t be things that directly show up in their financial statements. For example, I invested in a REIT because they had the best management team. This management team was more experienced than their competitions and this investment outperformed all the other REITS. 
 
From an accounting perspective, a good investment will have an increasing net income, a balance sheet with improving assets, and a great looking cash flow. You don&apos;t need to go to school and learn everything about financial statements but knowing the basics will help you with making informed investment decisions. 
 
When someone holds a stock they want to make a profit through growth or get paid through dividends. This makes fundamentals and accounting important because they will tell you that this company can increase in size, continue paying you a dividend, or have a growing dividend. 
 
Trading 
 
A trader is someone who will buy and sell stock due to price volatility. Price volatility is the short-term price changes. This means that a trader will look at the short term trends instead of how well the company is doing over the long run. A trader will focus less on fundamentals and accounting. Instead, their focus is on Technical Analysis and other short-term price drivers. 
 
The timing of a trade will be much shorter than an investor&apos;s time frame. There are a few basic types of traders. One is a scalper or Day Trader who has extremely short term trades. By definition, these are people who hold a trade for less than a day. Another example is a swing trader. These traders hold an investment more than one day but will sell the trade off the trend swing which is normally less than a week. 
 
What does a Successful trade look like? 
 
This is really simple. A successful trade is when someone&apos;s trade hits their intended price target or they hit their profit goal. Since traders are in a trade for less time they are in the market and out of the market as quickly as possible. A trader wants their trade to hit its price target as quickly as possible. 
 
Another important thing is that they will set price goals. A trader will go for a small gain at a time. An equities day trader might want 1 percent gain a day where a swing trader might set a goal of 5 percent a week. 
 
Article Source: <a href="https://EzineArticles.com/?What-Is-The-Difference:-Investing-VS-Trading&amp;id=9528234" target="_blank" rel="noopener noreferrer">What Is The Difference: Investing VS Trading</a> 
 
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