Investor VS Trader
Before you invest something, please make it clear what investor is and what trader is. Honest speaking, I get quite confuse what the exact meaning of it in the past. Many people call themselves investor but yet they are trader and vise versa.
Investor is a person who buy in something for long hold with the idea that over a considerable period or many years, their investment will appreciate in value. Investor buy real things or actual stuff. Warren Buffett is an investor. He buys companies instead of stocks. He buys its management team and products. He buys company that worth much more to him than what the market value it and sell the company when the company worth much less to him than the price at which the stock market value them.
Trader is a person who buy something and sell something in a short period of time from a few hours to a few weeks. Trader don’t buy physical things such as company or gold. They buy stocks, future contracts and option. Trader make money from price spread.They don’t care about the company and product. Trader only care about price and risk involved.
The moment you invest, please think which role you are playing, investor or trader. If you are investor, then don’t influence by the short term market volatility. However, if you are a trader, please take the risk of losing money because high return high risk.
I also don’t know how to define myself. Lolx!
Anyway i think i am more of an investor then trader but i am not a greedy investor. A return of 15 to 20% will be enough for me.
I don’t speculate as i don’t buy lousy stocks. I only buy fundamental solid stocks!
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Mrcoolku Reply:
May 9th, 2010 at 4:41 pm
Currently, I am investor, learning to become trader as trader makes more money. I learning techincal analysis for about half year but yet brave enough to jump into trader.
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I do not know which one I am. I prefer to buy quality stock when they are cheap. Really cheap. Panic selling is the shopping time for me. I will continue to hold those quality stocks until general market starts to show a sign of great reversal. It may take years to happen. I will ignore minor correction as most of the time they are “false alarm”.
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Mrcoolku Reply:
May 9th, 2010 at 4:41 pm
That is what warren buffet do!
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To really make money as a trader, you will need both knowledge and time. If you have neither time or knowledge. You might as well forget about being a trader at all. You will be taking to high risk for your money.
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Mrcoolku Reply:
May 9th, 2010 at 4:44 pm
I agree. It really take time to master it. I give my self 2 years to enhance my skills on technical analysis. Being a trader definitely is a risky thing to do therefore, you need to manage your risk well.
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i think a certain trading style should meet one’s personality as well as the amount of his equity. so far trading to me works much better because i have comparably smaller capital and daytrading generates about 900% per year. i can hardly imagine long term holdings will give me as much.
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Mrcoolku Reply:
June 27th, 2010 at 1:18 pm
It is up to your own favor. Both technique earning money however trader would have more risk on their money.
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