Trading or Investing? Investing or Trading?

[burglar]

I don't think I need charting in my strategy.

I do think every investor should know what traders do!

How many times does an investor say what just happened to the share price?
It just doesn't fit the metrics I've been slaving over.
All the research wasted.

This is a great company and it was the right price.
Luckily the share price will oscillate towards 'true value', given sufficient time.

Meanwhile, sitting indefinitely on the wrong side of the trade can't be fun.

Surely!!

 

[tech/a]

There are different types of traders.

T/H/Rambo's of the world Fast big wins and same on the other side.

To me they appear as punch drunk boxers dodging and weaving trying to avoid a hit while looking for that jab and the occasional KO.

But most of us in the retail world like to trade something a little slower.
So we trade in slower timeframes and if we really don't want to think a lot in a systematic manner.

Some of us don't need or want to hop in the Ring with the Ali's of the trading world.
We battle with other Ali's in a different ring.

But here (Trading/Investing) we are happy to plod along and enjoy the view.

Just figure out which one you want to be/do and go for it 110%.

 

[burglar]

... Just figure out which one you want to be/do and go for it 110%.

I am extremely happy to trade at pace, but it doesn't often come to my doorstep!

I am comfortable looking for that bastard share that will take off.
Just never know when that will be.
I know charts can and will help ... but not till I can see the patterns.

What was I trying to get at?
Some here invest with head in the sand, pretending that only investors exist.
Every time the share price tilts they exclaim that it doesn't make sense!
The ROIC did this, the PEG did that, the Share Price should be headed north.

Well, nothing needs to make sense!!

Admit that traders do exist and sometimes, take the other side of your trade.

 

[Gringotts Bank]

Well, nothing needs to make sense!!

Yeh. Humans like to have reasons for every little movement of the SP, but things just happen. Why did the bee go and sit on this flower instead of that flower? It just happened. Markets do whatever they do. Use the force, Luke.

 

[So_Cynical]

I don't think I need charting in my strategy.

I do think every investor should know what traders do!

How many times does an investor say what just happened to the share price?
It just doesn't fit the metrics I've been slaving over.
All the research wasted.

This is a great company and it was the right price.
Luckily the share price will oscillate towards 'true value', given sufficient time.

Meanwhile, sitting indefinitely on the wrong side of the trade can't be fun.

Surely!!

Its all time and patience, the wrong side of a trade/investment this week can often be completely turned around in a matter of weeks or months, occasionally years...time is an incredible advantage if you have it and its not costing you (leverage) anything.

I find charts very useful in understanding what's a good price to pay, comparing apples and apples and apples and oranges over different time frames...seeing what can move a stock and then seeing how its often irrelevant. charts are important (or should be) to investors as a tool to not pay to much.

IMHO

 

[burglar]

Its all time and patience, the wrong side of a trade/investment this week can often be completely turned around in a matter of weeks or months ...

Just been re-reading your thread So_C.
I get such mixed feelings like, "good luck!"

I can't see something like that working for me.

I have tried many things, probably changing too many things at once.
The market has probably also, changed too many things at once.

Hoping one day, that experience will win out!

 

[burglar]

... Use the force, Luke.

Sometimes, I feel a ripple in the fabric of the force!

 

[burglar]

... Why did the bee go and sit on this flower instead of that flower? ...

Strange you should pick on the humble bee, given its amazing navigation skills.

honey-bee-navigation

 

[howardbandy]

If I take a position, then call my attorney and have that position listed as an asset in my will, it is an investment.
If I take a position expecting the value of it to rise, and there is any chance (greater than, say 10%) that I will exit that position in the next few years, it is a trade.
If I take a position and I expect it to decline in value, it is an expense.

Buying a piece of property that I expect to leave to an heir is an investment.
Buying a residential house is at best a trade, maybe an expense.
Buying a car is an expense.
Buying shares in anything is a trade.

Best regards,
Howard

 

[coolcup]

time is an incredible advantage if you have it and its not costing you (leverage) anything.

IMHO

You mention "cost" in this post. To me the largest cost is "opportunity cost". This is one of the key differences between trading and investing. A trader would prefer to be out of the market / investing in other things than be in a stock that is trending sideways for an extended period whereas an investor is happy to sit there and wait if he / she thinks the stock is worth a lot more than the trading range it is currently stuck in.

 

[So_Cynical]

You mention "cost" in this post. To me the largest cost is "opportunity cost". This is one of the key differences between trading and investing. A trader would prefer to be out of the market / investing in other things than be in a stock that is trending sideways for an extended period whereas an investor is happy to sit there and wait if he / she thinks the stock is worth a lot more than the trading range it is currently stuck in.

Opportunity cost is very real and a factor to be considered, however there is a 2 edged sword aspect to opportunity, actually its more like a double - double edged sword, the positive and negative possibility's form staying in the trade and the positive and negative possibility's from exiting a losing trade and entering a new trade.

I think that the advantage that time gives the trader/investor far out weighs any real/average opportunity advantage that may result from fast turn over of capital.

 

[Wysiwyg]

Meanwhile, sitting indefinitely on the wrong side of the trade can't be fun.

Surely!!

I think that ones own trading psychology and investing psychology should be understood before doing anything. One is investing in a company as a part owner to live through the highs and lows and receive a percentage of company profits in belief the company will maintain strength and grow in the long term. Trading is gambling on price going up or down to make a profit. Know what to expect (example as quoted above).

Personally I have found there are few companies on the ASX that one could invest in nowadays because of the "disruptive" (oft used description) technologies and the China (Asia?) factor. There are fewer dominant companies or "cash cows".

 

[pipaussie]

This thread is interesting! Still reading

 

[hamli]

Trading is gambling on price going up or down to make a profit.

I just wanted to clarify that trading can be more than just betting on up or down. There are also different derivative products that can be traded on its own or as a supplement to stocks. Depending on the positions or combinations used, it can become more than just a trade purely on direction.

 

[shouldaindex]

It's hard to lose money investing with a few good rules.

It's hard to make money trading with all the rules you can think of.