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Trading Versus InvestingIn our age of split-second communications and information overload, it is ironic that there is such a shortage of reliable trading information. The market is flooded with misleading or inaccurate magazine articles and books, as well as materials that assume a level of expertise (or stupidity) on the part of the reader that may not exist. Traders come in many shapes and sizes. Many new traders are motivated by a desire to take charge of their investments and maximize their returns. Others are enticed by tales of fortunes made in the markets or the dream of a full-time trading career. The vast majority of these individuals view trading as a natural extension of the "buy-and-hold" investing they did in the past, and they approach it from a traditional, fundamental vantage point—analyzing a company's financial balance sheet to determine if its stock] is undervalued, weighing supply and demand factors I evaluate commodities, and so on. ______________________________________________________________________________ Stock Trading Robot - Find out about the stock trading system that has picked stocks which have doubled recently. ______________________________________________________________________________ For the most part, though, such neophytes enter the markets blindly, not understanding the differences between investing and trading—or how the two differ from gambling, for that matter. If they hang on long enough to become successful (95-97 percent of futures traders, for example, are estimated to lose money), they will have learned to appreciate the differences between these endeavors—a lesson every potential trader should know before risking money in the markets. Trading, investing, gambling: Are they simply different names for the same thing? Hardly, although all investing and trading is gambling, in the sense that you are by definition placing your money at risk with absolutely no guarantee of profit. Past returns while they may be useful as a general barometer of your odds, are definitely not indicative of future returns, as the standard brokerage industry disclaimer states. The differences between these endeavors have more to do with your goals and the way you try to achieve them than with the nature of the game being played.
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