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More often than not, trading and investing are used interchangeably, even by industry giants. If you are getting into trading or investing as a beginner, we suggest that you understand the primary differences between the two and know what it takes to become successful in each. Most famous investors also keep away a significant portion of their capital for trading. In fact, the profits of their trading activities are mostly their investment capital. Read on to know more about the difference between traders and investors.

Short term vs long term

Traders mainly use their knowledge to make profits in the short term. Some times, a class of traders like scalpers stay in a trade for just a few seconds. Their cumulative gains over the months will amount to something substantial if they stick to a profitable strategy.

Investors are more focussed on long term gains and hold their positions for at least one year. Most long term investments are taken with the hope of giving a few percentage points greater than Nifty and Sensex benchmarks.

Technical vs fundamental analysis

Technical analysis involves the understanding of indicators, studies and other market generated information which can drive the price of a stock.

Fundamental analysis is understanding the YOY profits, EBITA and other fundamental aspects of a company for long term gains.

Discipline vs Patience

Traders who follow their own rules strictly and revisit their strategy periodically to make amends to it are more successful that traders who do not have any plan.

Investors, on the other hand, are required to have patience as an important virtue. Since their returns can be realised only after several years, they cannot depend on it for their monthly expenses but simply look at it as wealth building.

Member name : Zebu Share and Wealth Managements Pvt Ltd
NSE / BSE / MCX , SEBI Registration No: INZ000174634
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Research Analyst : INH200006044

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Phone : +91-44 4855 7991

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The following advice is issued in the interest of investors:
Safeguard your account from unauthorised transactions. Update your mobile numbers/email IDs with your stock brokers. Get all information related to your transactions directly from the stock exchanges on your mobile phone / email id, at the end of every day. KYC compliance is mandatory when you enter the securities market. It is a one-time exercise done through a SEBI-registered intermediary (stock broker, depository participant, mutual fund, etc). There is no need to repeat the KYC process when you go to any other intermediary.

You do not have to issue a cheque while subscribing to an IPO. Write your bank account number clearly on the IPO application and sign it, sanctioning your bank to make payments when there is an allotment. Your funds will remain in your bank account in the case of non-allotment.