Investors or speculators.
A novice trader is often shocked to learn how trading is carried out on the Forex or stock market; the discovery
is that all transactions take place not with real money or assets, but with virtual capital.
Why are some traders proudly called investors, while others are disparagingly called speculators, although trading is carried out on the same platform?
What are the differences between an investor and a speculator on an electronic exchange and how this can affect the financial result.
Someone will say that he doesn’t care what they call him, the main thing is to make a profit, but it turns out there is a close relationship between these aspects.
Let's start by looking at the example of the behavior of an investor and a typical speculator.
A Japanese trader trading on the Tokyo Stock Exchange begins his day at 7-00 in the morning, first of all looking at all the news on the stocks that interest him.
It also analyzes yesterday’s trend, determining its main parameters. Based on news and technical analysis data, a forecast of possible developments is made. After the exchange opens, the trader compares his assumptions with the real situation and only if events develop according to the planned scenario, opens a deal.
If it turns out to be profitable, the positions are enlarged. Orders are closed if the market situation changes with the maximum possible profit. If the initial forecast is not confirmed, the Japanese investor simply refuses to trade. A Belarusian Forex trader wakes up in the morning and immediately launches the trading terminal with the firm intention of making money. A quick analysis opens a deal, and if the terminal is launched, the deal will be opened in any case, even if there is no clearly defined trend in the market and there are no convenient entry points .
If the transaction turns out to be 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 deal is opened, but in the opposite direction. During the day, a Belarusian trader can open at least a dozen transactions, quickly changing their direction and volumes.
The overall result after such throwing is usually unprofitable. As a result, we clearly see the difference between an investor and a speculator.
• Investor - thoughtful trading strategies , a clear plan of action, trades only at the most opportune moments, always uses both technical and fundamental analysis in trading.
• Speculator - trading in any situation, not being able to stop in time, gambling, rushing between strategies, using any methods of making a profit - signals , copying transactions, Forex advisors.
In order to achieve success on the stock exchange, the desire to earn money is not enough, try to make trading interesting for you, first turn trading into an entertaining game. Make forecasts and monitor how well they come true, and the profit will appear by itself.