The Difference between Trading and Investing

While trading and investing might seem synonymous, they are really different things altogether. Think about it. When you are in the Forex market, what are you personally doing? Are you trading or investing? Are you placing trades, or making investments?

Of course the terms can be exchanged by people and discussed in the same light. The terms can be treated as meaning the same thing. However, trading is really just about making a quick buck. It is short-term, whereas you should be thinking long-term. Investing is long-term. It is better to invest, rather than trade.

What you are doing as a Forex trader, is trading Forex, but it is best to think like an investor rather than a trader. The term ‘trader’ does not have ideal connotations, whereas ‘investor’ does. While you might technically be a Forex trader, make sure that you position yourself as an investor in the Forex market. What this means is, do not go out looking for short-term money-makers, because they do not really exist. It is possible to make fast money, but it is unlikely you will be able to sustain fast money. By positioning yourself as an investor, you will start thinking long-term and caring less about what you are going to make today, or tomorrow.

The richest of the rich do not talk about how much money they make per hour, or per day. The richest people talk in years. Poor people are more likely to say how much they make per hour. Richer people will more likely talk about how much they make per week or per month. People with real money talk about how much they make per year, or about their five-year plans.

This does not necessarily go against short-term trading strategies though. You can still scalp or use any kind of day trading strategy you like, provided that you still ultimately think long-term. Where are you going to be years from now? Think like this, instead of thinking about how much richer you will be by the end of the week. If you do that instead, you will most likely be down by the end of the week. Fast and easy money often never shows up to the party. Stop chasing it and chase your real dreams instead. You want a big house, right? You want a nice car, right? You will not make enough to afford those things by the end of the week, month or probably even year Forex trading. Five years from today though, you could well have all those things and more.

In conclusion, there is a difference between trading and investing. While you are a Forex trader, it is better to position yourself as an investor and think like an investor. Stop thinking short-term and start thinking long-term. If you are already thinking long-term, continue to do so. Visualize where you want to be. Real success is a marathon, not a sprint. Set short-term goals by all means, but understand that real success is long-term. Short-term success probably isn’t going to allow you to retire to an island for the rest of your life. Long-term success however, definitely could.

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