Investment & Trading

Investment strategies can be separated under three categories Equity, fixed income & cash. The strategy you adapt for making an investment is a subject matter, depends on skills, experience, expertise and financial objectives. A few strategies that you adapt as an investor can be buy & hold the asset it normally works in Govt. issued bonds and securities, Value Investing on such a stock or a coin which you believe is trading below its intrinsic value and holding it until its price raise substantially, Active investment in which you make frequent buy and sell decisions upon market research and analysis usually happen in stock market, Passive Investment involves low-cost index funds, it’s a set and forget strategy that minimizes active management, Hybrid Investment where you invest in preferred shares of a company that gives you a dividend on certain periods of time thus involving both equity and fixed income category of investment.

Trading strategies are optimized to exploit short-term market movements these strategies may vary widely in terms of risk and complexity. Few of the trading tactics are; day trading  in which you open and close your positions on day-to-day basis, the aim is to earn profit from short term market movement, swing trading in this you hold positions for several days or weeks to capture price swing with overall market trend usually stocks and coins are involved, scalping trading for small period of time such as minutes or seconds, you earn profit from very tiny movement of price, high frequency trading or HFT it uses advanced algorithms to make large number of trades in fraction of seconds, by carrying out trading at such exceptional speed HFT seeks to profit from minutes of price variations and imbalances in market HFT involves market making, statistical arbitrage and more.

Investment & Trading Time frames

The investment is referred when you have certainly a larger amount of funds available and a decent amount of time as well, you do investment when you know that you can wait! You can hold your fund in some specific category and basically you will be rewarded for your patience when the market value of asset increases. While trading is for shorter period such as 1-minute or 1-day, 1-week or 1-month may be, the core of the trade is to earn so one can manage the ongoing expenses and to build wealth.

Rather you invest for a long term or trade for a shorter period there remains some limitations and associated risks, and why not, if you are earning profits the loss is always on the cards depending on your decisions, it is important that as an investor or a trader you should have a clear plan and a risk management strategy prior to choosing between investing and trading, it is important to have a clear understanding of your financial objectives, risk tolerance, and time horizon. To reduce risk and increase profits.

Setting up a certain financial goal and achieving it feels great, the underneath sense of achievement boosts up self-esteem to some next level. We know various methods those help us find the way for accomplishing our financial goals. Investment and trading stand high among the financial options available for achievement of personal and business based financial goals.

Trading & Investment are two distinct approaches to engage in financial markets, each has its own fundamentals, strategies and time frames. In the following article we will discuss a few out of them.

The primary objective of any investment is to build wealth usually we do investments

for a longer period of time like we buy a property or an asset assuming that its price will appreciate in future.

When we decide to do an investment, we usually ride out the short terms ups and downs

normally we intend to hold up our investment until we get the best value for our time & money.

On the other end trading is to gain profit upon short term market movement, as a trader you

mostly opt to take an advantage of price fluctuation unlike in investment.

You shall have witnessed a trader using technical analysis such as charts and indicators for predicting price movements.

Strategies

Objectives