Investor or Trader

Buying shares after analyzing the fundamentals of the company and holding them for long term like from couple of months to couple of years is called as Investor. Investor buys a company only after analyzing its worth.If the current stock price is available at discount (undervalued) then he buys it for long term prospective.
Basically there are three types of investment methods.

1. Short term investment
2. Mid term investment
3. Long term investment

Short term investment
Investment done from couple of weeks to couple of months is called short term investment. It is done based on breaking news, or based on charts of technical analysis.

Mid term Investment
Investments done from couple of months to couple of years is called mid tem investment. It is done based on analysis of quarterly financial results or based on fundamental analysis.

Long term investment
Investment done from one year to couple of years like 3 years, 5 years, 10 years etc Long term investment is basically done after thoroughly analyzing the fundamentals of the company and its future growth prospects.

And also the wise investor invests in companies whose current share prices are undervalued but its future growth is huge. Generally long term investor is worry free from daily markets up and down and share prices volatility.

Buying and selling of shares based on technical analysis or market trend taking into consideration very short duration like from a single day to couple of days is called trader.

Mostly trading is done throughout the day and wit is called as day trading or intraday trading. Trader buys and sells the stock and he is not worried about the company’s performance or how good the company is.

Types of Trading
Trading is done on stock price for a day or for couple of days.
Trader is not worried about company performance; he is only worried to book profits whenever the share price rises. Basically there are two types of trading methods

Day trading
Buying and selling of shares on daily basis is called day trading.
Day trader don’t carry stocks to next day, he square off the positions (shares) on same day.

Swing Trader
a swing trader is just like a day trader but swing trade may hold the shares (positions) for couple of days like 4 to 5 days, while day trader doesn’t hold shares even for next day.
Swing trader basically trades based on news, breakout and breakdown in technical charts,
based on volume surge, based on up and down trade etc.

Based on understanding about stock and scrip one can take bet to act as trader or investor. In order to become trader it requires some amount of knowledge and experience.

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Article by Raviraj

Raviraj is the man behind He is graduate in finance, engaged in blogging since 7 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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1 Comment

  1. Anuradha says:

    Investing is risky. But hey there’s alayws risk. When you want to learn how to bike there is still risk. All you need to do is practice and practice until the time you make it.

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