Trading and investing both are great ways to make money, but trading needs more skills, knowledge, and time when compared to investing. I personally prefer investment is the best way to make more profits in the long run. Very few people can make money in trading but maximum people can make money in long-term investing.
As a trader you need to follow the news daily which should be national and international, and it takes so much time to study the patterns in graphs and you need to face so much stress during the trading time.
Tradings vs Investing
|Skills||High skills required||Basic knowledge required.|
|Time||Need to spend so much time in a day.||No need to spend time on it every day.|
|Stress||Every day||Only when the market crashes, but history proves that markets will again bounce back.|
|Returns||High or You may lose your capital||Good & in few stocks you may lose your capital, So keep your portfolio diversified.|
|Suitable for||Full time traders||Employees and Business people.|
Trading vs Investing Which is More Profitable
If you are a skillful trader then you can make money during that intra day otherwise the chances are high to lose money as well.
Trading doesn’t guarantee you the profits and even investing in stocks will also not guarantee to you the fixed profits, but at least if you invest in index funds then the profits are guaranteed in the long run.
If you really want to become rich in your life then concentrate on the field where you are working right now, and improve your skills and knowledge in that particular field.
And invest that money in index funds, mutual funds and some blue chip companies and other mid cap and small caps where you have faith and forget about them for at least a few years, and I am sure most of your portfolio will be tuned to Green after a few years.
Always invest with goals such as your retirement, children education, children marriage, etc. Once you have made sufficient money through investing to achieve that goal then withdraw that amount and use it to fulfill your goal or keep it in debt instruments like fixed deposits, where your capital is safe.
Do Day Traders Make more Money than Investors
Yes, there are some day traders who make more profits when compared to investors. But remember they spend their full time on trading and their percentage is also highly negligible.
Which type of trading is more profitable
Swing trading is somewhat profitable when compared to day trading. You can buy shares whenever they are available for a cheap price and you can make profits whenever their price increases.
You can do this with your own capital i.e not taking any margin from the broker. And you don’t need to spend your time on every day in front of the screen.