Both trading and investing can be considered as two different methods of attaining profit in financial markets. Both traders and investors look for profit by taking part in the market. The only obvious difference between the two groups is that investors tend to seek larger returns over an extended period of time, while traders seek smaller, more frequent profits over a much shorter period of time.
Comparing Trading With Investing
Both trading and investing require a degree of emotional discipline as well as patience to execute correctly. However, the time required by a trader and an investor differs in many aspects. In the case of traders, they remain active, potentially executing several trades throughout the day if they find positive trading opportunities. Investors, on the other hand, work on a long –term basis, as it does not require constantly watching the positions of his/her portfolio.
Comparing the potential returns of trading and investing is like comparing oranges to apples, as there are no definitive ways to answer it. One of the biggest advantages that trading has over normal investing is the phenomenon of rapid compounding of gains. For instance, if a trader starts out with $50000 with a 10% profit every month, the trader starts with $55000 in the next month, followed by $60500 the following month if the profit level remains the same.
Thus, through trading, a trader tends to make gains on prior gains, as well as on any additional deposited capital. This serves as a striking advantage that trading has over long-term investing. This is not the case with investing where traders have to wait years for profits to be realised and cannot use the said profit to generate even more gains.
Using IQ Option for Trading
Many potential traders avoid trading, citing a lack of reliable brokers as the prime reason behind their decisions. However, IQ Option, a Cyprus based brokerage service has become a popular option for traders looking to diversify their portfolio. Along with binary options trading, IQ Option offers a mix of forex contract for Differences, Stock CFDs, cryptocurrency CFDs, commodity CFDs as well as digital options, in a single, seamless platform.
As mentioned before, IQ Option offers a mix of forex, cryptocurrency, stock and commodity markets for traders to trade in. It offers Binary Options on some stocks, forex pairs and on some commodities. Because of recent changes in regulatory directives, it offers digital options for EU-based traders who are prohibited from trading Binary Options by law.
As traders require some skill and experience before attaining success, IQ Option offer a fully functional demo account for traders to get the hang of it. This demo account has all the features of a real account, with virtual money for traders to hone their skills. Novice traders can thus use this feature to get a feel of the trading market in real time, with options to restore the original virtual balance at any time.
IQ Option is thus a secure online broker which caters to both small and large participants in the market. The minimum deposits are as small as $ 1 USD with trades starting from $1 as well. Founded in 2008, the platform has more than 25,580,000 as of 2020.
Both trading and investments have their own sets of advantages and it cannot be definitively said which one is better. Ultimately, it depends on the skill level of the trader or investors involved, in order to be successful. With the emergence of online brokerage services such as IQ Option, the online trading industry has provided access to more traders worldwide than ever before, making trading one of the most accessible and profitable aspects of dealing in the financial market.
Image source: OTA Photos, via Flickr.