If you’re looking to gain financial stability through investments, there are several strategies you can choose from in order to grow your money. From being a sell-side analyst to a trader or an investor, the options are many. While an investor will understand the value of the asset first before allocating this capital, a trader will look for the best opportunities to sell stocks and make money. But which form of investing is better than the other? Let’s find out in today’s post.
What is day trading?
Day trading never holds positions overnight. In simple words you need to purchase and sell them in one day itself. This strategy is highly useful if you want to make good use of the fluctuations with the price of the asset along with all the positions that are closed on the same day itself. However, do note that this strategy is only for those who have a trading account and can be a bit difficult and complex for newbies since they don’t always have the best technical knowledge and skills for day trading,
What is long term investing?
In long term investment, you are expected to hold on to that investment for months, sometimes even years. This is more like a strategy of buying and holding instead of quick selling. It’s important to conduct important financial research before you come to any conclusion. Regardless of whether you want to become an investor or a trader, a lot of it will actually depend on your goals, traits, skills, etc.
Intraday trading or long term investment: which one is better?
If you choose intraday trading, you will be expected to spend at least two to three hours per day compared to long term investments where you will be spending a specific time period simply researching and understanding the company. Day traders tend to close the positions within the same day itself so they tend to monitor daily movements with regards to the stock prices. However, long term investors need to more alert and stay updated on all company news at all times.
None of these strategies can be easily achieved without any discipline. Not having enough patience can also lead you to losses. However, intraday traders don’t get much of an option as they have to make quick decisions. Long term investors on the other hand are expected to wait it out till they can see the stock perform. To actually see some good returns, long term investors are expected to hold the stocks for at least seven to up to 10 years.
Knowing these important factors can help you pick the best strategy. If you can give time to trading on a regular basis, then you can consider intraday trading as a strategy. But if you don’t wish to stress on the pressures of tracking daily market updates, then go ahead with long term investing. Several people tend to choose both the strategies when it comes to money. But at the end of the day, you get to decide what you want. So make sure to consider all factors before proceeding and download a good share market trading app before you begin.