What is trading?

I’ve been reading this forum for awhile now and it occurs to me that there is a pervasive misunderstanding about basic definitions. Thread after thread I see posters suggesting that trading is short term and investing is long term. This is nonsense.

A trade is an exchange of value. Dollars for product. Product for dollars.

Buying Tesla stock with a market order is a trade, regardless of the holding period. Closing the position is another trade. During the period between the two trades you are holding an investment.

Buying a shirt at the mall with a credit card is also a trade. You do not need to return the shirt or expect to earn a profit for the transaction to be a trade.

An investment is a trade that is expected to generate a profit.

We generally don’t call the purchase of a shirt an investment, because we do not expect to generate a profit on the transaction.

Short term trading is called “day trading” or “scalping.”

Long term trading is called “swing trading” , “position trading” or “buy and hold investing.”

These are not my opinions. These are facts. Consult your favorite dictionary before replying to debate.

This is important to point out because, looking at the bulk of the commentary on this forum, a large majority of the forum participants:

A) have a net negative P&L;
B) trade short term;
C) would agree that scalping is an unprofitable strategy due to spreads, commissions, and adverse selection.

If you know the thing you’re doing is a bad idea, why are you doing it?

You, Mr forex trader, are really a forex investor, making forex investments in the short term, and as best I can tell, very few of the traders here are doing any real due diligence before putting money at risk; which is why most “traders” fail.

Change your perceptions and you will change your results.

trading is gambling.

For me you can call it whatever you want as long as it works. Short term investing, long term trading I couldn’t care less tbh. Just trade with consciousness, that’s it.

Agree with you. Trading is basically the buying and selling of financial instruments, such as stocks, bonds, commodities, or currencies, with the aim of making a profit.

Maybe this article will help with the basic logic: https://insights.primecodex.com/how-...forex-trading/

You make a valid point about the definitions of trading and investing. The distinction lies in the approach and intention, not just the time frame. Understanding this and focusing on thorough due diligence, regardless of the term 'trader' or 'investor', could indeed change the outcomes for many in this space. It's about strategy and mindset, not just labels.

It's true, for many, it's like being in a casino

Lol. But gambling is different though. Poker gambling is not the same as roulette.

Your post offers an interesting perspective on the definitions of trading and investing. You emphasize that the essence of a trade is the exchange of value, regardless of the duration or the nature of the item involved. You also note that an investment is essentially a trade with the expectation of profit. This clarification can indeed be helpful for those who may conflate short-term trading with investing or overlook the role of due diligence in successful trading. Your viewpoint encourages a more thoughtful approach to trading and investing, emphasizing the importance of strategy and research.

Can you clarify on that? I don't know how but it struck a chord

Trading and gambling both involve risk and the potential for financial gain. However, trading typically relies on analysis, strategy, and market knowledge, while gambling is more dependent on chance and luck. However, it's worth noting that some traders do rely on luck. But, I don't think such traders are seriously engaged in trading.

Nah, man, I can't say the same. Well, trading is more about analytics, more about rational approach. It's gambling for those who don't understand the mechanics and if they one treats this industry this way, then it will give results as in classical gambling.
If you have a good strategy, you understand your actions and act rationally, as I said, there's a possibility to win in the market in a long run. It requires time, patience and knowledge, but anyway.

Trading is the art of buying and selling financial instruments like stocks, bonds, currencies, commodities, or derivatives in various markets. It's a dynamic process driven by supply and demand, market sentiment, and economic factors. Traders aim to profit from short-term price movements, leveraging analysis, strategies, and risk management. Whether it's day trading, swing trading, or investing, the goal remains the same: capitalizing on market fluctuations. Trading involves understanding market trends, technical indicators, and fundamental analysis. It requires discipline, patience, and a continuous learning curve. Successful trading demands a blend of strategy, intuition, and adaptability in navigating the complexities of global financial markets.

Why are you pasting in stuff from the web as “forum posts”? Are you trying to “build credibility” here, or what?! And why?

Anyway, it’s just stupid, whatever the reason.

This is a valuable clarification on the distinction between trading and investing. Emphasizing that trading encompasses both short-term and long-term actions, while investments are trades with an expectation of profit, is crucial. Addressing common misconceptions about terminology helps traders understand their actions better. Encouraging due diligence before risking capital is essential for success. By shifting perceptions and understanding the nuances, traders can improve their results. Thank you for shedding light on this topic and promoting informed decision-making within the forum community.