Most people use these two terms interchangeably, but they’re not the same thing.

Both take place in the same market, but each has its own style, technique, timeframe, and risk-reward ratio.

Just because both sports have a ball, field, team, doesn’t mean that football is the same as volleyball.

Trading

Trading in general has a shorter timeframe than investing!

You look at the charts, you rely more on technical analysis, and you don’t really care about the overall performance of the asset you’re trading. You just want a quick in and out, for a small winning percentage.

It carries more risk, and requires a lot of time dedication to master the different strategies and snipe your entry and exist.

Because of the added risk, if done properly, over the same timespan, it can have higher return than investing. But it also means you have a higher chance of losing more money, in a quicker way.

It’s not for everyone

Investing

Investors tend to hold their position for longer periods (usually years and years) while adding to them every chance they get.

Instead of flipping their position for profit, they rely on other sources of return, such as dividends, stock appreciation, and sometimes even borrowing against those shares (Currently not an option in Egypt)

Unlike traders, they focus more on the fundamentals of the asset, and couldn’t care less about the day to day price fluctuations.

Instead, they analyze the reports and news, lock in on an asset they want, and grab it for lower than its fair price. If it goes down more, they buy more, as long as it remains a bargain.

It takes more time to see substantial reward, but it carries less stress, requires less time on the screen, and has minimal chances of losses

Problem?

I’ve seen a lot of people say they’re investing, and playing the long term game, but as soon as the price flips the other way, they panic sell.

Basically, what they have done, is take the bad side from each style, and make it their strategy.

They end spending a lot of time on the screen, following the price action, stress more, and then end up losing their money.

And this is why people think it’s hard or it’s a scam. They’re simply doing it wrong!

Solution

You have three possible methods available to you, that when done properly, you’ll start seeing return faster and easier than you imagine

A) You stick with INVESTING. You look at the long timeframe, you come up with a fair price for the asset you want, and you DO NOT buy it above that price, regardless of “How You Feel“ about it. If you buy in and it goes lower, you buy up more, coz you’re research and analysis says it is actually worth more than where it’s currently at.

B) You choose TRADING. You spend some time learning different trading and technical strategies (You’ll lose at first, but that’s your education fees). You hunt for a sniper entry, set up your Stop Loss and Take Profit beforehand, and be in-and-out as quickly as possible. You let go of the greed, and don’t FOMO if price keeps going up after you sell. Be like a machine, taking bites and leaving the rest.

C) You mix both, but not in a stupid way. I know I said the problem was people mixing Trading with Investing, but we’re gonna do it in a smarter way. You don’t focus on a single asset and panic when it drops. Instead, you dedicate a certain percentage of your wallet for investing, and the other for trading. You don’t invest in the trades, and you don’t trade the investment. It is recommended that you do that by having 2 different accounts, so you wouldn’t let your emotions get the best of you.

Never EVER!!

Final piece of advice: Regardless of which method you’re going to follow, this is the most important thing that you should never ever do.

Never chase the price!!

Whether you’re investing or trading, if the price moves from where you needed to get it, STOP!

Don’t run after it. Don’t think “Ok, I’ll take 9% instead of 10%, it’s cool”

In investing, if it goes above your Fair Price, let it go! In trading, if it moves from your Entry Price, let it go!

Learn to let go, and move on.. The market has been here for longer than you can count, and it will remain here long after you’re gone. There will be plenty of other opportunities in the next 3 seconds.

Let It Go!! Let It Go!! ❄️ ⛄️