Differences between Investors and Stock Traders

Differences between Investors and Stock Traders

In the world of stocks, there are various characteristics of traders or investors. The characteristic referred to here is that some traders like short-term trading, some like long-term trading, some are intentions for investment, and some like to combine the three types. This difference between investors and stock traders can be seen from the actions they take.

• Traders:

  1. A Short-Term Trader: Namely those who usually buy and sell shares in a relatively short time. Usually 1 day, 2 days, or if there is an error in analyzing, it will cut-loss to avoid losses. A short-term trader generally relies on technical analysis.

     Short-term traders rely on their income from shares through capital gains, namely income earned from stock transactions based on the difference in the value of purchases and the value of sales.

  2. Traders Who Like Long-term Trading: A long-term trader usually transacts buying shares and then holds or keeps them for a relatively long period of time, can be up to months depending on the target price to be achieved or depending on the trend of stock prices purchased.

     They generally earn income through capital gains and those who are more patient are usually willing to wait for the dividend distribution schedule. A long-term trader usually combines a technical and fundamental analysis approach to analyze the target stock.

     Generally, a long-term trader will combine technical and fundamental analysis to execute orders. By becoming a trend follower, they will really be forced to sell their shares when the stock price trend reverses from the bullish trend to bearish even though it has not reached the desired price target. A long-term trader will usually use the Simple Moving Average Tool or trendline to see the price trend conditions that occur.

• Stock Investor: An investor, purely using fundamental analysis through analyzing the ratio of certain financial statements of a company. An investor relies on profits earned through annual dividends shared by the company.

  To become an investor, it takes super extra patience and must be willing not to sell the shares that have been collected. Even the collected shares will not be sold for life. It does not matter whether the collected shares value goes up or down he will still buy it.

  If necessary, when the price is plummeting as long as the company is healthy and keeps distributing consistent dividends, the shares in the collection will still be purchased regularly.