Day trading vs investing – What do you need to know
Day trading vs investment – what’s the difference?
In our guide to day trading vs investing we have covered the differences between these approaches to the financial markets. The key thing to bear in mind is that traditional investing is done over the mid- to long term, whereas day trading involves a higher volume of quick transactions – some staying open for mere minutes.
Is day trading for me?
The nature of day trading means it requires more attention – a position can change quickly and traders need to be ready to enter and exit the market at the most opportune times. This means that, if you want to start trading you will need to be able to devote time to the task – and bear in mind that some markets operate at different times. Before you start day trading, we recommend doing as much research as possible. A good starting point is our guide to ‘what is day trading’ – this will give you an overview of the technique as well as a few pointers on how to get started.
Is day trading riskier than investing?
The level of risk involved is often cited as a major difference when comparing trading vs investing. However, all investment involves some kind of risk. Whilst it is true that day traders usually close positions every day – meaning that they may have to do so at a loss sometimes, ultimately it is the slightly elevated risk that also offers potentially bigger rewards.
What do I need to start day trading?
The great thing about day trading is that all you need to get started is an internet connection and a device that can access web content. Our CAPEX web trader, for example, can be displayed on your PC or Laptop and we have a dedicated mobile app for phones and tablets. Of course, you’ll also need to open a trading account in order to access the markets.
What is a CFD?
A CFD – or Contract for Difference – is a form of derivative that has surged in popularity in recent years. Effectively, CFDs allow traders to speculate on the price movement of anything from stocks to cryptocurrency, without ever having to own the underlying asset. For more information, check out our guide to CFD trading.
Conclusion – Trade CFDs at CAPEX
By now, hopefully you can weigh up the advantages of trading vs investing. Both approaches to the financial markets undoubtedly have their place and it should be remembered that both can be used to complement each other.
The sheer accessibility of online trading has seen its surge in popularity in recent years and here at CAPEX we want to make sure that our trading account can accommodate all levels of trader – from seasoned professionals to complete novices.
If you’d like to start your trading journey, why not check out our demo account to get a feel for the markets?