What is the difference btwn trading and investing in stock market.?

Question

if i have a demat account online can i do trading and investing..

Answer 1

Best Answer - Chosen by Asker

If you do have a Demat account + Trading account then you can Trade in the Stock Market Online.

Now the First Part of your query......

Trading and Investing are inter-related literally but not practically.

Trading

1. Time of investment is very short.
2. Risk is High
3. Gives Trader the THRILL of Quick Money on High Risk
4. Normally,it includes borrowed money
5. The frequency of Buying & Selling is quite High.
6. It is mostly done on Technical Parameter.
7. Generally a Trader ,if not very proficient in the market ends up on a losing side

---Thus if your investment in a stock is for a very limited period of time ,(say) From few Minutes .............to ............10-15 Days. then it will qualify as Trading.Normally a Trader speculates about the very near term target Price of a scrip and then take a Position according to that speculation using some technical Tools.

Investing.

1. Time Period of investment is quite Long
2. Risk is distributed over longer time period, thus lesser than Trading.
3. It features a Patient investor whose motive is to earn reasonable profit in reasonable Time.
4. Normally, its fully paid up investment
5. The Frequency of Buying and Selling is very low
6. It do take help from Technical parameter But with Large influence fom Fundamental news of that scrip/sector.
7. Genrally an investor ends up on a winning side.

-----Thus ,if your investment in any scrip is Fully Reserach based , after evaluating the fundamentals....and for a Longer Time Period (say) from a Month to ...year or so.....it will qualify as Pure Investment.


My Experience shows that an Investor probability of gaining from market is Much-Much more than a trader.


Hope this answer will help

Source(s):

The broker with a difference !!

Asker's Rating:

Asker's Comment:

Thanks for the reply

Answer 2

Yes u can. You can trade as well as keep stocks for long time as an investment. Day trading is always risky

Answer 3

Investing is what most members of the public do ie buy shares and gamble that the price will be higher when they want to get money back at some date in the long run. If you are lucky you get a Capital Gain of which the tax man takes 40%.
Successful investors like Warren Buffet do research into the fundamentals of the market, company & management and only buy undervalued stock.
Trading is an Income Generating Business (so only have to pay 20% after deducting business expenses like training or losses). Traders understand the charts and use strategies to manage the risk to reward ratio so still make a profit when share price goes in the wrong direction 50% of the time. Buy & Sell within a week

Source(s):

http://www.AskPhilipAllen.com/share-trad…

Answer 4

In trading you earn from somebody else's loss and in investing you earn from the company's earning.

In short, if you buy shares and hold for less than 14 days then it is trading. If you hold more then it is investing.

Source(s):

http://nsetradingsecrets.blogspot.com/

Answer 5

Your question is well covered by the first three answers. Trading you keep the stock for a few hours or days, investing you carry the stock for the long term use-ly years.

Answer 6

The difference is exactly like gambling $100 at a casino, or taking the same $100 and buying a coat. The money at the casino will be lost in minutes, most always, while you can wear the coat for years.