Are you a Trader or an Investor?

Are you a trader or an investor? Why would you need to know? Well quite simply, knowing which camp you belong to will save you time in identifying the information that is relevant to you! There is a proliferation of information relating to the markets these days, and knowing which information to absorb, specifically which strategies to pick and practice, is key to sustainably growing your capital.

Here are some statements relating to Trading and Investing. Make a note of which statement you agree with and discover which category you belong to:

1. I generally hold my positions for a year or more.
2. I enjoy following the market action, and am great with facts and figures.
3. I dislike reading lengthy reports and digging for information.
4. I am fascinated by all the headlines that relate to the financial markets, but don’t read the news in detail.
5. My income from the markets doesn’t depend on when I close my position i.e. income comes from a regular dividend or coupon payment.
6. I don’t have a lot of capital at my disposal.
7. I don’t like taking risks at all.
8. I’d like to know how to take calculated risks.
9. I want a passive income. I don’t want to work for my money.
10. I am not very good with computers. In fact, if I could I would call someone to do it for me.
11. I want someone to pick my transactions for me.
12. When it comes to picking transactions, I make my own decisions.
13. I can’t bear to see my account balance fluctuating.
14. I understand that losses are inevitable, and I aim to minimize my losses.

So how did you do?

If you agreed with statements 1, 5, 7, 9, 10, 11 and 13, you’re more likely to be an INVESTOR.

If you agreed with statements 2, 3, 4, 6, 8, 12 and 14, you’re more likely to be a TRADER.

That said, regardless of whether you are a trader or an investor, there is a common need for everyone in the financial markets to focus on Money and Risk Management. Money and Risk Management are indispensable components in any investment or trading strategy because they affect key parameters of your exposure to the markets (e.g. how long you can hold a position, or the size of the position you can take). Combined with a strong desire to learn more and stick with your strategy, your long term success as either a trader or investor depends on your ability to manage your money and your risk. Self-awareness is only the beginning… 

Happy trading!

Regards,

Karen Chow
The TWP Team