Are you an investor or are you a trader?

It's really important to ask yourself this, and differentiate the 2 because they are indeed very different.

Being an investor means that you are predicting long term appreciation of an asset, so your cost basis doesn't really matter.

Trading an asset means you expect appreciation (or depreciation if you are shorting) very quickly in a short period of time.

Each method has their pros and cons but before you put any of your hard earned cash to work it is important to make a distinction about your intent and come up with a strategy.

Time is money right?

This is true in all things, but investment allows you a little more time to reach your goal. You are not trying to nail a bottom and go all in. When investing it is actually best to use a scale approach. Its okay to buy a little high as long as you have more capital to average down your cost basis.

So think about your capital in fractions. Lets use 5/5 - So today you may purchase 1/5 of your position in a given equity or asset class. Next week the price drops, this is an opportunity to add to your position, so now you are at 2/5 scale - you would do this until you have acquired the full desired position on the basis that the equity or asset will continue to appreciate in the long run.

Investing is not an all in approach. Trading is.

When you trade an equity or asset class, your anticipation is that the value will move swiflty in either direction. Trading is a full scale approach, no averaging down. If a trade goes against you, close out right away. Use stoplosses to prevent exorbitant losses.

This is a key distinction between the 2, Investors believe in an asset or equity, traders believe in the current short term price action of an equity or asset class.

I do not recommend trading for anyone without experience or proper research.

Lets look at Bitcoin

If you were an investor you may buy right here 1/5 of your position, and in fact hope that the price goes down to buy more, in otherwords if you believe it to be bullish, you are buying on pullbacks.

If you are an trader, buying here, you missed most of the move, you may use technical analysis to determine an entry and use a full scale to catch any movement up(long) or down(short).

Long story short, you need to decide, are you trading, do you have the accumen for it - Or are you investing, do you have the patience for it.

As a trader dont be the guy who always buys high and sells low.

As an investor, don't be the guy who misses the move.

Resteem . Upvote .

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Not Trading or Investment Advice