Looking for tips on online stock trading? It’s important to understand whether you are someone suited for trading or investing before starting!
Online Stock Trading:
Trading generally refers to people buying and selling stocks off the markets based on technical indicators. You could have seen representations of this in precisely annotated charts and brokers yelling buy and sell in the movies! Traders typically do not look at the fundamental business quality of the stock that they are buying and selling.
It is also not true that all traders are short term focused, though most are. There are long term traders as well.
What traders focus on is market psychology causing the price fluctuations on the market, and attempt to “catch” the change in market psychology to make money off it.
Online Stock Trading is typically more active when compared to investing and involves the setting of alerts, buy/sell pricing limits on your trading platform. I would say it is more fast paced than stock investing.
Online Stock Investing:
Investing refers to people putting their money into good companies and letting it grow for you. Investors look at the fundamental business quality and decide whether this company is going to do well in the mid to long term.
One of the world’s richest men, Warren Buffett is a well known stock investor, along with billionaires like Charlie Munger, Sir John Templeton and more. These are men who made billions by investing their money into great businesses and letting them grow, rather than moving in and out of stock positions every day!
There is still work to be done for stock investing. Investors typically spend effort on analysing businesses before actually putting their money in. However, once this is done, investors do not need to look at the stock market every single day, in fact, the less you look at it, the better your results may be. A well known adage for investing is to go into stocks that you’d be “sleeping on
” for years to come, rather than worrying about ups and downs that occur daily.
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