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Investment Series – Investor Versus Trader
By: Jason Ng
Many people have mixed up the terms “ Investor ” and “ Trader ” to mean the same
thing. They can’t be more wrong. It is exactly the mixing up of these 2 very
important terms that led to many people starting on the wrong foot in the
capital markets.
An Investor is a person who puts his money where it can potentially generate a
return. He does not usually get involved in the money making process. Investors
include buyers of investment real estate and buyers of funds.
A Trader is a person who fights in the capital markets front line personally in
order to generate equity. He is the one who personally chooses the investment
instrument (e.g option trading), makes an opinion on it and executes a series of
trades in order to make money out of it.
Too many people have mixed being a trader for being an investor. This has led to
a lot of misunderstanding. The misunderstanding comes from the wide spread
teaching that anyone can choose to break out of the “rat race” by choosing to be
an investor rather than a worker. That person then turns to exploring option
trading or forex or such instruments “as an investor” and completely finds that
not everyone can excel in those areas.
While it is true that anyone can be an investor by putting your money in a well
diversified portfolio, not everyone can be a successful trader. Active trading
requires far more skill and finesse to master and to make consistent money for
income replacement. This is especially true when a lot of the strategies that
are available today are highly subjective.
However, only by being a trader will anyone be able to generate the legendary
returns that they yearn so much. And being a trader is exactly the hardest to do
unless you have a proven system to follow or someone to mentor you.
Therefore, before you take the plunge into the capital markets, make sure you
know what you are really into. If you have decided to become a trader, make sure
you keep your full time job while you look for a proven system to learn. A
proven system is something like the Star Trading System which I have followed
with great success for years.
About the Author:
Jason Ng is the Founder of Masters 'O' Equity international. He is a fund
manager specialising in options trading and his Star Trading System has helped
thousands. Please visit www.MastersoEquity.com. |
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