Decide you are an investor or a trader by your personality

Trading and Investing both are completely different areas. There is only one similarity that both buys shares and both sell the shares. Trader needs completely different qualities and investors needs different set of qualities.

Let’s see what you can become.

First we see what qualities a trader must have to be successfully in share market.
Traders want to earn more in short time duration. They can not wait for long time to be rich. They usually tend to take more risk to get successful in short time and this mind set leads them towards failure. To be a successful trader someone needs to have better risk management, discipline, controlled mind that strictly follow the rules set by himself.

Being a trader there is only 2% chance to make money in share market because very few people have these quality. All most every trader understand trend and knows what is right but very few of them take right decision at right time. This is the quality of share market that it always keeps you engaged and never let you decide the right thing.

For Traders it is necessary to save the capital. In case as a trader you have taken a wrong decision then its better to undo your mistake without waiting to lose your all money.

A Successful trade is always a successfully trade from start to end, you never go red. But if you starts in red and hope that it will go green, It means you have taken a wrong trade.

As a Trader, work with High probability only. When you are sure that you have a very high chance to win only then take the risk.

Take the calculated risk. You risk should already be defined. If you dont know how much you are going to lose or gain in one trade then you should not take that trade.

Now lets come to Investors. There are 80% of people who make money by investing. Investors are never worried about markets up and down. They sleep tight at night because they are sure that they bought a right company and they will make money in future.

There are completely different set of tools for investors to do analysis over a companies health. They make decision by seeing the companies profit ratios and growth story. They never invest if they don’t see story in any companies business.

They have completely different mind set about buying share. For them, they never by something to sell when its go up in sometime, they buy business which will earn money for many years in future until the growth story is intact. They have shear patients because they are sure about their decision.

There are many dos and don’ts for traders and investors in share market that I will cover later in any other blogs. Hope i gave you some idea so that you can decide what type of personality you are. To Start with Share Market, I suggest you to read this article.

Thanks guys,

18 thoughts on “Decide you are an investor or a trader by your personality

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