Stock Trading - Learning the Difference Between Trading and Investing

Many new traders very often mistakenly associateshould think in terms of charts and chart patterns as
investing with trading while both have very little inwell as major and minor support levels at the very
common. Other than buying, selling and orderleast. Sectors that are in favor and out of favor.
execution, investing and trading could not be furtherDaily financial and economic data released by various
apart. New traders that are experienced in long termagencies. Larger market trends. Federal Reserve
investment strategies are very often taken abackannouncements. Options expiration each month. All of
and shocked once they enter the world of tradingthese factors have an impact on the market and
for short term profits.very little to do with the fundamentals of an individual
Investing very often only requires the fundamentalstock, which is why there is such a large difference
aspect of stocks being considered as potentialbetween investing and trading.
candidates for a long term investment portfolio. ByNovice traders should consider studying technical
fundamental it is meant the profit and loss, long termanalysis and Japanese candlestick charting before
prospects and bottom line of the company in whichventuring into the shark infested waters of stock
stock is being considered for investment purposes.trading for short term gains. What applies to investing
Trading however, takes an entirely differentwith success will seldom work with trading since the
approach with most of the focus being on thedynamics are different with each. Taking the time to
technical side of the stock. By technical it is meant instudy market characteristics and patterns on a daily
terms of how the stock trades within the dynamicsbasis and then implementing a trading system that is
of the larger markets.first tested is the key to success with short term
When we think of technical stock trading the tradertrading.