denisdman wrote:
a genius wrote:
Investors, or traders?
From a newsletter I read:
Quote:
The market's "Tariff Tantrum" over the $50 billion to $60 billion levy on Chinese imports that was announced on March 22, one week ago, was pretty routine, but traders took the announcement and ran with it. Meanwhile I'm going to assume that investors, who tend to have a timeframe that extends beyond five nanoseconds, took the announcement in stride. Why?
Well, let's step back a minute and consider the initial Trump administration announcement that blanket tariffs of 25% and 10% would be applied to all steel and aluminum imports, respectively. So far, according to an analysis by Moody's Analytics, "temporary" exemptions have been given to Canada, Mexico, the E.U., Brazil, South Korea and Australia, adding up to 65% of the imports upon which tariffs were supposed to be levied and 67% of the value of all steel imports. Does that sound like a blanket tariff?
If you're to believe the reports out of Washington, negotiators for the U.S. and China are already in discussions about just how far the new set of tariffs will go—if they go at all. A tit-for-tat tariff compromise is most likely the end result, giving all involved the ability to go back to their constituencies and claim victory. I'm keeping my skeptic's hat pulled down tight.
Traders are a subset of investors.
From
https://www.investopedia.com/ask/answer ... rading.aspBold emphases are mine.
This is not intended to be argumentative, but rather just a discussion.
Quote:
Investing and trading are two very different methods of attempting to profit in the financial markets. The goal of investing is to gradually build wealth over an extended period of time through the buying and holding of a portfolio of stocks, baskets of stocks, mutual funds, bonds and other investment instruments. Investors often enhance their profits through compounding, or reinvesting any profits and dividends into additional shares of stock. Investments are often held for a period of years, or even decades, taking advantage of perks like interest, dividends and stock splits along the way. While markets inevitably fluctuate, investors will "ride out" the downtrends with the expectation that prices will rebound and any losses will eventually be recovered. Investors are typically more concerned with market fundamentals, such as price/earnings ratios and management forecasts.
Trading, on the other hand, involves the more frequent buying and selling of stock, commodities, currency pairs or other instruments, with the goal of generating returns that outperform buy-and-hold investing. While investors may be content with a 10 to 15% annual return, traders might seek a 10% return each month. Trading profits are generated through buying at a lower price and selling at a higher price within a relatively short period of time. The reverse is also true: trading profits are made by selling at a higher price and buying to cover at a lower price (known as "selling short") to profit in falling markets. Where buy-and-hold investors wait out less profitable positions, traders must make profits (or take losses) within a specified period of time, and often use a protective stop loss order to automatically close out losing positions at a predetermined price level. Traders often employ technical analysis tools, such as moving averages and stochastic oscillators, to find high-probability trading setups.
A trader's "style" refers to the timeframe or holding period in which stocks, commodities or other trading instruments are bought and sold. Traders generally fall into one of four categories:
Position Trader – positions are held from months to years
Swing Trader – positions are held from days to weeks
Day Trader – positions are held throughout the day only with no overnight positions
Scalp Trader – positions are held for seconds to minutes with no overnight positions
Traders often choose their trading style based on factors including: account size, amount of time that can be dedicated to trading, level of trading experience, personality and risk tolerance. Both investors and traders seek profits through market participation. In general, investors seek larger returns over an extended period through buying and holding. Traders, by contrast, take advantage of both rising and falling markets to enter and exit positions over a shorter timeframe, taking smaller, more frequent profits.
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