Trading Vs Investing- What's the difference

Author: S. Vishwa

What is Trading and how does it work?

Investing involves holding the shares for a long period but investors who want to engage more and have some action opt for Trading. Stock Trading has financial rewards if you do it in the right way. When you invest in the stock market it involves ups and downs of the market. On the other hand, trading is a great alternative to investing. Online trading consists of trading in securities that are available on the online platform. Financial instruments like Equity, commodity, and mutual funds can be traded.

So if you are interested in Trading here’s how you should go about it:

  • Open Trading and Demat account: When you begin your trading journey online you need to open trading and Demat accounts with any broking firm. Choose the one with low maintenance cost and with an affordable brokerage. Go for that broking firm that provides the facility of both trading and Demat accounts. The broker should be a registered member in all the exchanges (like NSE, BSE, etc) and is certified by SEBI.

  • Practice with any Online Stock Stimulator for great learning of online trading.

    In order to invest in stock market, you must have a demat account. You can check out the

    HDFC Demat Account

  • You should draft a safe plan and think about your investment strategies. Decide how you want to trade and set limits for loss that you could bear.

What is Investing?

Investing is a way to increase the amount of money you currently have and gain returns in the future. The goal of investing is to buy financial products and sell them at a higher price. When you invest it's like you are giving the money a chance to grow and give you favorable returns in the future.

So if you are interested in Investing here's how you should go about it:

  • Start your investment journey as soon as possible: The more amount of time you keep your money invested the more opportunity of growth it will bring to you. It is very important to start investing early.

  • Try to stay invested for longer periods or as long as you can: Investment is all about patience and how bad you can control your urge to sell off your investment at a higher rate with it having a possibility to grow even higher in the future. It is called compounding returns and it will bring you more money for retirement.

  • Spread or diversify your investment to reduce or manage risk.

You need to open a demat or trading account in order to invest in shares. You can check outthe