Just about everywhere you look these days you see news, articles or books about stock trading. Well, we’ve all heard of investing in stock but what exactly is stock trading and how is it different than investing?
Many of us are used to being invested in stock through a mutual fund in our retirement plan. We may switch from one fund from the other from time to time but for the most past we consider ourselves to be in for the long haul.
So basically an investor seeks to be in a stock or a group of stocks for the long haul. Investors don’t expect a stock to skyrocket in value overnight but do expect that the value of the company’s stock they have chosen will appreciate over time.
In stock trading you don’t necessarily expect to be in a stock for the long run, but you are looking to profit form typically smaller short-term moves in a stock. In stock trading you are more like to use market timing meaning that you are seeking the best time to get into a stock and after that you are looking for the best time to get out.
Stock trading often involves the use of technical analysis to determine the best times and prices for entries and exits. As this is a more short-term approach to profiting in the stock market stock trading is typically more hands-on that stock investing. As the length of the trades is shorter more frequent monitoring of positions is usually necessary.
A stock trade can last anywhere from a few minutes to many months. It all depends on the preferred methods of the stock trader.
Stock trading can be an extremely profitable business. Make sure that you do your homework and have a plan before you commit your money in an effort to make a profit.
To Your Stock Trading Success!
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Source: www.a1articles.com
