Although trading and investing have the same ultimate goal of generating profits in the stock market, the means used to achieve this goal differ. Understanding the difference between these two activities will allow you to focus on exactly what will help you in your particular case.


The key difference is the frequency of trading. A trader can enter and exit trades several dozen times a day, it all depends on the quality and quantity of trading signals. An investor can make only a few transactions per month or even a year. An investor can select several stocks to work with during the year, while a trader has to deal with hundreds of tickers throughout the year.


Day traders usually look for volatile stocks with high trading volume. This ensures that you can quickly enter or exit a trade with a significant capital increase in the trading account. The day trader wants to see the price movement, he is not worried about what caused the excitement.


An investor usually focuses on quality companies that have a bright future. We can say that the day trader is betting on the movement of the share price, and the investor is betting on the company that issued these shares.


Which one is better? Which one suits you best? To answer these questions, you need to start studying the markets, and then you can determine which one is best for your financial goals.