Trading

They’re different, even though in both cases you buy and sell shares or other assets. The difference is time and intention. Long-term investing means buying a piece of a business, or a basket of companies, and keeping it for years. You’re counting on the economy growing over time. Trading means buying and selling often, sometimes on the same day, to profit from short-term price movements.

Most often, through technical analysis: they study price charts and look for patterns that have shown up before, hoping they’ll repeat.

Often several times a day: the charts and the news. For an active trader, it’s basically a job, not something you do on your coffee break.

Research from several countries has reached the same conclusion: most people who trade very short-term lose money over time. Short-term prices are hard to predict. On top of that, every trade has costs, even on apps that promise zero commission. And in many countries, every realized profit can be taxed.

Yes, but look at how professional trading firms choose their people: a very tough selection, with tests in math and probability. When you trade from home, you’re competing against exactly those professionals, and against programs that trade automatically, in fractions of a second.

It depends on what you want. If you like the idea of following the market daily, you accept high risk, and you’re willing to learn it like a profession, trading is one path. If you want your money to grow over time, along with the value of the companies you invest in, without constantly watching the data, long-term investing is a better fit. We cover that in the Buy and Hold module.