“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren E. Buffett

Friday, September 28, 2007

kinds of traders

Generally those who do trading are of three kinds.
1.Investors 2.Traders 3.Speculators

Investors are those who are interested in investing their money in share on the assumption that it will be safe and the returns will be high in long run, ie., the investor purchases the share and holds it as assets hoping that his investment will give a capital gain in the long run he will not be interested in indulging in trading as a profession or they are not interested in short term quick income

Traders are those who on the other hand exactly the vice versa of the investors, these people are interested in making profit in the market in short term it may be for few minutes, few hours, or for few days, they always try to profit from the short term gains in the market.

Speculators are those who are ready to take high risks in for a high profit,they will be always prepared to take high risk with respect to anticipating future price movements for high large gains and normally they invest in the highly leveraged investments such as futures and options.

Here, normally an investor will always before investing will see for the track record of the company its product, its balance sheet and so on because their aim is only capital gains,and a trader is not at all worried about the company or its product or its track record but they are interested only technical analysis or charting which relate only to the stock price.