Trading vs. Investing
文章來源: njrookie2014-10-30 07:27:00
How trader and investor should deal with stock investing:
 
Trader:
1. trade what you see, not what you think;
2. do not anticipate; participate; align yourself with the winning side in your time frame;
3. trade the views of other traders as they leave their footfprints in the price action.
 
Investor
1. invests in the company as a business;
2. needs the horizon and guts of WB to sit through short-term market movements.
Most of time, we do not have an edge as an investor, but try to justify a bad trade as an investment due to the sound business model/products of the underlying company.
 
One needs to train himeself to think investing as a probability game. A best trade/investment is at best a 60/40 or 70/30 bet. You can only control your action, but you cannot control the outcome. If you keep on doing the right thing, over time, money will take care of itself. The worst thing that can happen to a beginner investor is to do the wrong thing, but get lucky and somehow make some money. It builds really really bad habit.
 
just my 2c.