Investors or speculators.
A novice trader is often shocked to learn how trading on the Forex or stock markets works. The revelation
is that all transactions are conducted not with real money or assets, but with virtual capital.
Why are some traders proudly called investors, while others are dismissively called speculators, even though they trade on the same platform?
What are the differences between an investor and a speculator on an electronic exchange, and how can this affect financial results?
Some might say they don't care what they're called as long as they make a profit, but it turns out there's a close connection between these two aspects.
Let's start by examining the behavior of an investor and a typical speculator.
A Japanese trader trading on the Tokyo Stock Exchange begins their day at 7:00 a.m., first reviewing all the news on the stocks they're interested in. They also analyze the previous day's trend, identifying its key parameters. Based on the news and technical analysis data, they forecast possible developments.
After the exchange opens, the trader compares their assumptions with the actual situation and only opens a trade if events unfold according to the planned scenario. If the trade proves profitable, they increase their positions. Orders are closed if the market situation changes, maximizing the profit. If the initial forecast is not confirmed, the Japanese investor simply abandons trading.
A Belarusian trader trading Forex wakes up in the morning and immediately launches their trading terminal with the firm intention of making money. After a quick analysis, a trade is opened. If the terminal is running, the trade will be opened in any case, even if there is no clearly defined trend on the market and there are no convenient entry points .
If the trade is profitable, it is closed immediately after receiving a couple of dozen points of profit; in an unprofitable situation, the order is closed immediately without analyzing the situation. Then a new trade is opened, but in the opposite direction.
A Belarusian trader can open at least a dozen trades per day, quickly changing their direction and volume. The overall result after such tossing and turning is usually unprofitable.
As a result, we clearly see the difference between an investor and a speculator.
• Investor - well-thought-out trading strategies , a clear plan of action, trades only at the most opportune moments, always uses both technical and fundamental analysis in trading.
• Speculator - trades in any situation, inability to stop in time, passion for gambling, tossing between strategies, using any means of making a profit - signals , copying trades, Forex advisors.
To succeed on the stock exchange, the desire to make money is often not enough. Try to make trading interesting, and first, turn it into an engaging game. Make predictions and monitor how well they pan out, and the profits will follow naturally.
