HOME I ABOUT I PRICING I FAQ I LEARNING I MY ACCOUNT I CONTACT

What Is Difference Between Investing and Day Trading?

The major difference Between Investing and Day Trading arises in time horizons. While short-term Day Trading and mid- to long-term Investing bear the similarity in their goals to generate returns for the capital invested in stocks, the two investment methods are very different. Investing also referred to as Trading is long-term and entails lower level of risk, whereas Day Trading is short-term and implies more risk. Day Trading refers to buying and selling stocks typically within seconds, minutes to hours, while investors hold their positions for longer period that can last weeks, months or even years.

Day Trading can be fascinating for a layperson to make profit fast, but due to the risk inherent to market volatility, sudden trend changes and freshly released stock market news or unexpectedly emerging stock catalysts, it is a highly risky trading form and can lead to big losses. In contrast to Day Trader's great deal of trades throughout the trading day, including winning and losing ones, Investing generally leads to long-term wins coupled with few severe losses. Though both have to be supported by a kind of trading strategy developed by the investors, trading is less prone to be affected by unexpected market- or world events than Day Trading. An ironclad and time-tested Day Trading strategy paired with a solid risk management can significantly reduce the risk of Intraday Trading but perils relevant to the proceeds and the capital still will not be comparable over long-term investment's relatively low risk.

While to start investing is a kind of routine task nowadays, when market is inundated with a multitude of online stock brokers that offer their trading platforms 90 featuring modern stock charting tools, stock screeners, and tools for comprehensive technical analysis, before looking into Day Trading it's prudent to be aware of the risks of all types a speculator might be exposed to.

Relating to both types of stock trading, the more inclusive trading strategy is used, the less risk is triggered by unforeseen occurrences in the stock markets. Even though they are different strategies, there are no distinctions between their primary purposes of producing profit. While investing is often profitable for stock traders and the question arises about the extent of their profit, it's difficult to give a ballpark about how much an Intraday Trader can make.

From another respect, Investing is considered a passive sort of trading - if ignoring the risk factor and - assuming that stock prices move higher with time floated by the stock markets. Investing relies on the fundamentals of the company behind the stock, and the holding time can be extremely long if investment is in an Individual Retirement Account (IRA) or Company-Sponsored Retirement account (401K).

Conversely, Day Trading refers to the process of actively trading stocks intraday, in attempt to capitalize quick or small price actions. Day Trading requires active involvement in trading stocks during the stock market hours. As opposed to Investing, Day Trading relies on the stock technicals where buying and selling decisions are made upon stock technical analysis, and the holding time is far shorter, from split seconds to hours. Day Traders in general don't hold positions overnight due to the considerable risk of gapping in the extended hours.

Battle Inflation Monster

Create From-Home Career

Act for a Luxury Life

Dissimilarity emerges in the frequency of trades too. While Day Traders usually place heaps of buy- and sell orders throughout the day, picking stocks from an ocean of securities, Investors typically trade a few times a month or year, with an insignificant amount of stocks.

As a key difference, Day Traders typically use margin with up to 4 times leverage that allows for bigger profits, however margin being borrowed money increases their risk exposure to high extent, if stock trends turns against their Day Trading strategy.

No Grueling Analysis

Day Trading Is More Risky Then Investing

Massive Profit Rate

Lucrative Career

Key Takeaways

» Although they are very dissimilar, Investing and Day Trading bear some similarities as well.
» Regardless of the investment strategy, stock trading assumes skills, technical analysis and more often than not studying of stock market news.
» Both need a stock broker for trade execution.
» In a wider sense both strategies aim for making profits from stock price fluctuations.
» Both Investing and Intraday Trading carry risk, albeit risk levels are very different.

Have you felt recently the signs that you're flirting with a financial crisis, or you just want to put your savings to work? You currently possess investments or you've never played with the idea of trading stocks but you can learn and work unhesitatingly a Few Hours Daily?

If you're seeking a way to build financial wealth our game-changer Company Stock News Impact Evaluation System is your best companion on your Career-Building Journey. News Trading upon Bullish New Alerts is something you'd regret not looking into. Sign up for our Real-Time Bullish News Updates about such US Companies' announcements and events that most likely will spark heavy purchase pulling the stock price to the upside soon after the market opens.

14-Day FREE Trial
NO Credit Card Needed

Services	Education	Legal

What we do	FAQ	Privacy Policy
Track Record	Learning Center	Terms & Conditions
Free Trial	About Day Trading	Disclaimer
News Trading	Profitability $$$
Market Snapshot	MY ACCOUNT
Pricing
Company
Contact