​

What is trading?

 

‘Trading’ on the stockmarket is done by investors who are attempting to make a large percentage return on their capital in a short time frame.

 

This usually involves ‘leverage’ so that the impact of short term share price movements is magnified. A rise of, say, 5% in the share price can then result in a much larger percentage gain, say, 15% for example, for the trader.

 

Of course the converse is true if the share price falls. Therefore traders run the risk of losing their investment capital very quickly if they have a number of consecutive losses.

 

Leverage can be obtained in a number of ways.

 

CLICK HERE for some examples of how to obtain leverage.

 

Trading is unsuitable for most investors, due to the risk of losing all of their investment capital within a short time frame.

 

However, trading may be suitable for those investors who are prepared to embrace high risk in the pursuit of high return. It may also be suitable for those investors who allocate a small percentage of their investment capital for this type of speculative investment.

 

Technical analysis can greatly assist those who wish to engage in trading.

 

CLICK HERE for the technical analysis techniques that I recommend for trading.

 

Daytrading is the purchase and sale of shares in one day or trading session.

 

CLICK HERE for my views on the do’s and dont’s of daytrading.

 

 

What is investment?

 

Investors acquire an ownership interest when they buy shares in a company. They are therefore part owners of that company.

 

This differs from traders who have little interest in the long term future of the company. Traders only concern is the short term price movements of the company’s shares.

 

The technical analysis done on the website is designed principally to provide buy and sell indicators for longer term investors.

 

CLICK HERE for examples.

 

However, there is also a Trading Section in the Member’s Area for short term traders.

 

CLICK HERE for examples.