I’ve been reading this forum for awhile now and it occurs to me that there is a pervasive misunderstanding about basic definitions. Thread after thread I see posters suggesting that trading is short term and investing is long term. This is nonsense.
A trade is an exchange of value. Dollars for product. Product for dollars.
Buying Tesla stock with a market order is a trade, regardless of the holding period. Closing the position is another trade. During the period between the two trades you are holding an investment.
Buying a shirt at the mall with a credit card is also a trade. You do not need to return the shirt or expect to earn a profit for the transaction to be a trade.
An investment is a trade that is expected to generate a profit.
We generally don’t call the purchase of a shirt an investment, because we do not expect to generate a profit on the transaction.
Short term trading is called “day trading” or “scalping.”
Long term trading is called “swing trading” , “position trading” or “buy and hold investing.”
These are not my opinions. These are facts. Consult your favorite dictionary before replying to debate.
This is important to point out because, looking at the bulk of the commentary on this forum, a large majority of the forum participants:
A) have a net negative P&L;
B) trade short term;
C) would agree that scalping is an unprofitable strategy due to spreads, commissions, and adverse selection.
If you know the thing you’re doing is a bad idea, why are you doing it?
You, Mr forex trader, are really a forex investor, making forex investments in the short term, and as best I can tell, very few of the traders here are doing any real due diligence before putting money at risk; which is why most “traders” fail.
Change your perceptions and you will change your results.
A trade is an exchange of value. Dollars for product. Product for dollars.
Buying Tesla stock with a market order is a trade, regardless of the holding period. Closing the position is another trade. During the period between the two trades you are holding an investment.
Buying a shirt at the mall with a credit card is also a trade. You do not need to return the shirt or expect to earn a profit for the transaction to be a trade.
An investment is a trade that is expected to generate a profit.
We generally don’t call the purchase of a shirt an investment, because we do not expect to generate a profit on the transaction.
Short term trading is called “day trading” or “scalping.”
Long term trading is called “swing trading” , “position trading” or “buy and hold investing.”
These are not my opinions. These are facts. Consult your favorite dictionary before replying to debate.
This is important to point out because, looking at the bulk of the commentary on this forum, a large majority of the forum participants:
A) have a net negative P&L;
B) trade short term;
C) would agree that scalping is an unprofitable strategy due to spreads, commissions, and adverse selection.
If you know the thing you’re doing is a bad idea, why are you doing it?
You, Mr forex trader, are really a forex investor, making forex investments in the short term, and as best I can tell, very few of the traders here are doing any real due diligence before putting money at risk; which is why most “traders” fail.
Change your perceptions and you will change your results.