Let us understand the Real Meaning of Trading.
In ancient times, trading used to take place with the barter system, where one could exchange goods against goods, and in today’s date, goods are exchanged against currency and vice versa.
The General meaning of trading is buying and selling of a product, service or commodity. Be it in any business, it would involve trading; ranging from Wall mart to a Fruit Seller, everyone trades; the difference is only in the way trades are executed.
When one person/party purchases a good and sells it to other person/party with a profit margin, it is simply known as Trading. This is the basic business characteristic; that is right! But in stock market as well, there exist purchasers and sellers, and thereby, trade is executed in the stock market.
Though the duration of keeping or holding the good (Stock) differs from a day, a week or a month to a year or even more than that.
Trade is the life and the economy of the world. The 2 Fundamental reasons that lead to trading are:
- Buyer & Seller
- Demand & Supply
Both reasons are prevalent in stock markets as well. The trading of securities in the stock market is not considered to be a well-versed profession, while in my opinion, trading is a profession that is as holy as any other renowned business/profession in the world.
Trading is generally considered to be a bad word and is misconceived with speculation and speculators
While Investment is accepted as a good word. However, if we see the dictionary meaning of both the terms, the basic essence remains the same, i.e., both mean the process of buying and selling something;
the only difference is in the form of holding period and the applied approach.
“Trading is more of a science and Investing is more of an art.”Mr. George
Soros is a Trader and Mr. Warren Buffett is an Investor, and both are equally successful and wealthy in their respective careers. During my initial stage of the career, I asked many about the better choice between Trading and Investing. Many preferred Trading; while some told Investing; I understood everyone holds their individual choice.
I eventually decided to be both, as “the religion in the market is to make money, irrespective of being a trader or an investor“.
Thus, I decided to be both Trader and Investor