After spending nearly 20 years as a fan of the investing world, looking up the all time greats and getting to know how they tick, I can clearly say that there is no difference between an investor and a trader. From what I see there are different ways to trade, but there is no blanket differentiation between these 2 terms. At the end of the day every single person involved in the financial markets is trying to make a profit, every single person buys and sells securities, and every single person analyzes these assets. While these truths may hurt some people who do not want to be called traders, it is in fact, true.

Now, you probably came here because you are interested in buying and selling stocks on the open market in your brokerage account and in that regard we are all the same. If you are somehow putting cash to work in startups or something like that you do have more of an ‘investor’ pedigree as its boom or bust in a lot of those cases. But the average individual, or even a lot of professional individuals and institutions are all trading institutions, now if you want to flip the terms around and call us all investors that is fine too but there is no major differences between the 2 camps.

So, that being said, there are differences in the way that people trade and in this article I want to dispel the stigma to trading that some have and we will start with some trading terms that are fairly universal and in a majority of cases it just has to do with the time frame that positions are held and one of the most emotional of these terms is day trader.

A day trader is someone who looks to buy and sell a stock or asset within the same trading day, nothing more, nothing less. They can also be called scalpers and a myriad of other names but the main point is that they mostly aren’t comfortable holding positions overnight. At the same time you can make the argument that a lot of day traders have other accounts that they do not day trade in. So just because someone calls themself a day trader does not mean they don’t hold other positions for longer.

Swing trader, a swing trader is someone who holds positions overnight, in day trading this is fairly universal but in the rest of the trading world a swing trader may have an alternate meaning. This meaning is where people hold positions from weeks to months, maybe even a year or so as the market is ‘swinging’ in the direction they desire. But at the end of the day you can be defined as a swing trader if you trade over a week or a year.

Investor, seeing how this article is Investing vs Trading I am going to add this here even though we know that at heart they are the same. But from what I see most ‘investors’ invest for over a year, the time horizon for these trades can be years or decades. But this is where things get tricky, if you ever meet an investor that say something like “Ive been holding Amazon for 20 years” first off congratulate them, second ask them if they ever sell positions? They will probably say yes and they do so for the same reason that other traders to, the underlying premise for the trade was broken and some of these premises are not broken for very long periods of time.

Some people will say that Investors do great fundamental analysis work and that they look for value and those same people may think that traders just go with what’s ‘cool’. But that is not always the case, not at all. In my circle of traders we are just as concerned with fundamentals and the quality of the asset as these ‘investors’ we just look at different metrics. This is the main difference, its not that traders take more risks than investors, its not that traders are gamblers its that we view the markets through a different lens and this is where the difference of opinions splits the trading community. Investor vs Trader.

But at the end of the day we are both seeking profits, we both buy and we both sell, we even look at the same things. We are the same.