Trading and Investing?

Question

Alright you guys i am sorry for all the questions on Stocks but i really want to get in to it =].

What is the difference between investing in the stock market and trading in the stock market?

Answer 1

A trader bases his decision on technical indicators as to whether a stock is over sold or over bought or has broken through a resistance level or a support level.  

An investor might also use the technical indicators but is more interested in the fundamental outlook for the company based on market outlook and such things as market position, relative value, etc.

Traders are attempting to take advantage of short term movements in the stock.  Investors are attempting to capitalize on what they think is long term value in the stock.  

Answer 2

I suggest investing in aapl "Apple" longterm they will do great and you don't need to check the markets day and night.

As for trading, you can do this on a daily basis but you need to constantly keep and eye and know when to buy and sell.

please check out USO, this is an oil company, expected to spike in the next few day because of hurricane Gustav will damage oil refineries.

Answer 3

Trading takes more work, and is more fun. eg: day trading, or short term trading.  If you are savy you will want to do trading. BUT you need a strategy.  You should know how to do a technical analysis at the least.          Investing, you choose a group of stocks, (never put all your eggs in one basket).  or at least one mutual fund.  When the market is going down in a bear market as it has this year, you will more than likely lose money in stocks and funds if you are investing.  Historically, when investing, you sit on them and they will come back in positive territory and you will regain your losses and be well into the positive column.  However when trading, you can trade on the way up or down and make money in both directions.  A good book to read on trading,  Wall street money machine by Wade Cook.  

Answer 4

Short term vs. long term.

Answer 5

trading is making actual trades, like buying a stock, for example.  it's typically done over a computer.  you would click ona button saying 'market bid/buy' and you'd have a buy order in w/your brokerage company.  whether they go on to the open market to get your shares, or allocate some already in their inventory (if they make a market in those shares, for example), it barely makes a difference to you.  you end up w/the shares.

investing is the act of strategically managing your funds, a portion of funds.  investing could be trading for a living.  or making trades can be a tool through which you invest.  both terms can be used kind of loosely..meaning many different things.