How to differenciate trading and investing in cryptocurrency.

[Joy- maker]

There was a thread i created last month titled the difference between gambling and trading , so when contributions and replies where coming in, along the line a member of this forum asked this question how to differenciate trading and investing in cryptocurrency? and  I could have love to attach where he asked that question here  but I don't know how to do it because am still new here and am learning as well. And I have also seen in one of the forums where some members where confusing trading to be the same thing as investing, with this similarity, that trading is for short term while investing is for long term.

Now let me differentiate trading and investing in cryptocurrency, and going to focus on trading first, before I switch to investing.

First of all trading has to do with buying and selling of crypto assets within a short period of time, either in a minute, an hour or within a day.

In trading, the main aim of traders Is to make profit from price fluctuations, by speculating on Volatility and market trends within a short period of time.

In trading, traders have to frequently buy and sell crypto assets in other to capitalize on price movement.

This one is common among us that trading carries higher risks due to market Volatility, leverage and the potential for significant looses is high.

In trading, traders use technical indicators, patterns and charts to analyze market trends to enable them make decisions.

Now let focus on investing.

Investing involves buying and holding of crypto assets for certain period of time, at least 4 to 10 years or there about.

Investing topically carries low risk compared to trading, for people who invest are less expose to short term market functions.

When it come to Investing, investors accumulating crypto assets consistently over the time with their leftover money and hold them for long term growth.

In investing, investors analyze the underlying value of a crypto asset, and consider factors like, use cases, market potential and it technology.

In investing, investors often diversify their portfolio by holding many crypto assets, in other to reduce risk and increase potential returns.

So I believe with this few points of my, I have answered the question on how to differenciate trading and investing in cryptocurrency.

[Dailyscript]

In that thread i think a lot of persons talked about the difference between trading and investing. If you had gone through the thread entirely you would see. But that's the way.

Trading has to the with timing the market, making analysis for short term profits/gains, while investing must be accumulation for long term. Trading require in dept knowledge and skill practice while investing is safe heaven for continuous accumulation for a longer period before withdrawing.

[SmartGold01]

This is something that is not confusing comparing that of trading and gambling.
Investment connotes holding for a specific period of time and it could be for months or years depending on the projected plans of the investors or whenever they feels satisfied about their profits, since many people sets out profit level and then sell off their holdings and uses the capital for other investment.

A typical example is; you see people jumping into meme coin investment such as Trump coin and when they hold for a short period and feels satisfied with the profit they made, they don't mind dumping it so quickly and move to other coin that is newly launched go maximize their profit over there and whenever they got their targeted amount they ought to sell off as well.

While trading involves watching and monitoring the market movement to milk out a little percentage of profits from the market through the price changes and news (be it positive or negative)  this is mostly where profit are being driven from provided if they made the right analysis and, some people could go for a long position for those who are trading on future or derivative.

[casey15]

There was a thread i created last month titled the difference between gambling and trading , so when contributions and replies where coming in, along the line a member of this forum asked this question how to differenciate trading and investing in cryptocurrency? and  I could have love to attach where he asked that question here  but I don't know how to do it because am still new here and am learning as well. And I have also seen in one of the forums where some members where confusing trading to be the same thing as investing, with this similarity, that trading is for short term while investing is for long term.

Now less look at how we can differenciate trading and investing in cryptocurrency, focusing on trading first.

First of all trading has to do with buying and selling of crypto assets within a short period of time, either in a minute, an hour or within a day.

In trading, traders main aim Is to profit from price fluctuations, speculating on Volatility and market trends.

In trading, traders frequently buy and sell crypto assets to capitalize on price movement.

trading carries higher risks due to market Volatility, leverage and the potential for significant looses.

In trading, traders use technical indicators, patterns and charts to analyze market trends to enable them make decisions.

Now less focus on investing.

Investing involves buying and holding of crypto assets for serting period of time, at least 4 to 10 years or there about.

Investing topically carries low risk compared to trading, for people who invest are less expose to short term market functions.

In investing, investors hold onto their crypto assets, accumulating them over time for long term growth.

In investing, investors analyze the underlying value of a crypto asset, and consider factors like, use cases, market potential and it technology.

In investing, investors often diversify their portfolio by holding many crypto assets, in other to reduce risk and increase potential returns.

So I believe with this few points of my, I have answered the question on how to differenciate trading and investing in cryptocurrency.

Trading itself is also a type of investment...
What I mean is from your explanation, trading and not really different except for the time frame... The timeframe determines the risk, the way it is been affected by the market... However in context, they are both buying in lower price to sell at a higher price....
 There are also position traders that take trades and hold them for as much as 6months.... While that is trading, there are investment schemes too that gives returns in 6 months to a year... This is not limited to crypto currency only.

[Doan9269]

The main difference between trading and investment is the target on the time frame for the execution of the trades, when you're trading, then you make use of currency exchange from one to another and you often do this depending on the type of trader you be, either a day trader, swing trader or any other types but when it comes to investment, you're taking your asset to buy on crypto and hold for long, when the market rise as the case of the bullrun maybe, then you choose to sell, you will need a skill to be able to perform trading while you may not require much skill for making an investment as long as you can understand the perfect entry and exit time and have the ability of being patient waiting upon the market.

[Gozie51]

When we talk about trading, most people here understanding it to be only cryptocurrency and that is why they mistake it for either investment or gambling because they see you can hodl cryptocurrency as investment as you buy crypto and sell likewise you can buy crypto and hodl causing the misplacement.

Thus, we should know that cryptocurrency is just new at least not more than 12/13 years back but before then there was trading already existing far back from what I heard. There are different trading and one of the oldest is stock trading or fiat trading called (forex trading), there is binary or deriv, different commodities have been traded before cryptocurrency and you don't hodl them in any wallet, you just buy and sell especially forex. If you are hodling fiat like (dollar), that could be in your domiciliary account with the bank and I don't know if forex traders where doing that but only to open an account with a broker then transfer USD and start buying or selling ( that is the elementary meaning of trading) buy and sell. Hodling is not trading but investment and it is new with cryptocurrency, so we have to understand it that way.

However, you can be a trader and investor (aka hodlers like hodling crypto) also a gambler  

[Kelward]

Wetin crypto trading and investment get in common be say you de hold your coins for profit purposes and di major difference na di timeframe of holding.

Crypto investment: Dis na to hold cryptocurrency for a long term to make profit in the future but for emphasy sake na only one cryptocurrency don proof im potentials to de reach ATH for im bull seasons. Bitcoin be di only cryptocurrency wey don proof to be a store of value and we believe say e go de give us ROI for every bull circle.

Crypto trading: Dis na to buy and sale cryptocurrency on a short term, unlike investment wey no need any technical knowledge, person wey want to trade need to aquire trading skills. Trading de hard and risky because cryptocurrencies de volatile, you fit to lose your money very fast.

Trading no be for everybody, person wey no get patience to learn about technical and fundamental analysis go most likely de lose everytime. But investment na for everybody, know how to create wallet and either buy Bitcoin from exchanges or do p2p transactions with another person. Know how to protect your wallet private keys from lose and theft.

[Gozie51]

Trading no be for everybody, person wey no get patience to learn about technical and fundamental analysis go most likely de lose everytime. But investment na for everybody, know how to create wallet and either buy Bitcoin from exchanges or do p2p transactions with another person. Know how to protect your wallet private keys from lose and theft.

Sure everyone can invest and hodl but no be everybody fit to dey do trading because many things involve join am including emotion. For investment or hodling, the emotion no really dey there because you already zero your mind so na for hodling but trading involve timeous execution backed up with technicalities, news, policy wey go affect the trading decision.

[Callido]

Trading no be for everybody, person wey no get patience to learn about technical and fundamental analysis go most likely de lose everytime. But investment na for everybody, know how to create wallet and either buy Bitcoin from exchanges or do p2p transactions with another person. Know how to protect your wallet private keys from lose and theft.

Sure everyone can invest and hodl but no be everybody fit to dey do trading because many things involve join am including emotion. For investment or hodling, the emotion no really dey there because you already zero your mind so na for hodling but trading involve timeous execution backed up with technicalities, news, policy wey go affect the trading decision.

Anybody trying to go into crypto investment or trading knows what he or she is doing, the knowledge must be there to choose from, you don't trade out of mistake or invest by mistake. When you trade, the whole exchange is carried on quick market price correspondence, in minutes, hours or days, sometimes people trade for weeks but an investors is focused on different prices and accumulating a good portion of Bitcoin, the process of investment is dependent on how long the person has in mind to hold completely.

[CryptopreneurBrainboss]

First of all trading has to do with buying and selling of crypto assets within a short period of time, either in a minute, an hour or within a day.

It can also be in a month too and it's still trading. Basically what differentiate trading and investing is the time frame that both investing are being done. Trading is usually for the short term while investing is for the longer term. The mentality is also different for who wants to become a trader and for an investors. You can't have the mentality of a trader and expect to have good results being an Investors so you have to look for the sector that you have more passion in and build on that.

Now less focus on investing.
Investing involves buying and holding of crypto assets for serting period of time, at least 4 to 10 years or there about.
In investing, investors often diversify their portfolio by holding many crypto assets, in other to reduce risk and increase potential returns.

I just want to correct you that there's no timing to when an investors is supposed to hodl but it just has to be long term and although there are some definitions of what long terms are but your timeframe isn't it. An investor can hodl for 6 months and be comfortable with the gains that he has, it can be 1 year. 5 or more but there's no actual duration that you will have to hodl to become an investor.

[Gozie51]

Trading no be for everybody, person wey no get patience to learn about technical and fundamental analysis go most likely de lose everytime. But investment na for everybody, know how to create wallet and either buy Bitcoin from exchanges or do p2p transactions with another person. Know how to protect your wallet private keys from lose and theft.

Sure everyone can invest and hodl but no be everybody fit to dey do trading because many things involve join am including emotion. For investment or hodling, the emotion no really dey there because you already zero your mind so na for hodling but trading involve timeous execution backed up with technicalities, news, policy wey go affect the trading decision.

Anybody trying to go into crypto investment or trading knows what he or she is doing, the knowledge must be there to choose from, you don't trade out of mistake or invest by mistake. When you trade, the whole exchange is carried on quick market price correspondence, in minutes, hours or days, sometimes people trade for weeks but an investors is focused on different prices and accumulating a good portion of Bitcoin, the process of investment is dependent on how long the person has in mind to hold completely.

Anybody trying to go into crypto investment or trading knows what he or she is doing, the knowledge must be there to choose from, you don't trade out of mistake or invest by mistake. When you trade, the whole exchange is carried on quick market price correspondence, in minutes, hours or days, sometimes people trade for weeks but an investors is focused on different prices and accumulating a good portion of Bitcoin, the process of investment is dependent on how long the person has in mind to hold completely.

We dey almost talk the same thing, having knowledge or not is notthe thing but na how well. No be just to get elementary knowledge to maybe click on buy or sell button be the thing. To get start up knowledge different from person wey get passion for the thing, na that passion go make somebody pass that startup knowledge level to more knowledge because na there you go meet emotion and patience. For me oo, trading dey more complicated and investment easy more

[Mr Reporter]

 Well op i most confess hopefully your thread did added some knowledge to me  on the difference between trading and investing cryptocurrency, firstly i will we say in this life in everything thing we find ourself doing we need to understand it to your satisfaction, trading and investing in cryptocurrency are two different type of investments any if they look alike there are still different by there strategies, time management and aslo risk managemen, when we say trading it involves buy and selling of cryptocurrency on the sort terms markets which requires alot to brain work technical analysis, chart patterns and some follow up on how the market cap is doing.

 From the little i have learned from  investing in cryptocurrency means or refers to long term "HODLing" and aslo mean changing flat currency to digital assets with the mindset of financial over truning later in the future and aslo it not control by any traditional authority which all know as decentralized technology.

[Cityhunter34]

Trading no be for everybody, person wey no get patience to learn about technical and fundamental analysis go most likely de lose everytime. But investment na for everybody, know how to create wallet and either buy Bitcoin from exchanges or do p2p transactions with another person. Know how to protect your wallet private keys from lose and theft.

Sure everyone can invest and hodl but no be everybody fit to dey do trading because many things involve join am including emotion. For investment or hodling, the emotion no really dey there because you already zero your mind so na for hodling but trading involve timeous execution backed up with technicalities, news, policy wey go affect the trading decision.

Actually when it comes to trading there a lot of risk involved. and your chance of losing money is always higher than the chance of making profits from it. But when settle down and plan for long term investment it most surely yield good profits for you, so investing in Bitcoin is always good when you invest and hold for a long period of time. because Bitcoin investment is far better when you accumulate and hold for future purposes.

[Makus]

Trading is also investment, but a short term investment but sometimes we like to differentiate them assuming the term investment is quite different from trading whereas trading is under investment.  That is by the way. A trader has to be equipped with vast knowledge on how to study price chart and under patterns and movements to be able to make technical analysis and the trading needs to be vigilant in watching the price movements  for potential trading opportunities. In contrast to investment a long term investment don't need to keep his eyes fixed to the market chart like a trader, sometimes they consider it a medium to help control their emotions on trends. All an investor needs is to study the project they are about holding for long term and make efforts to buy in accordance to their risk tolerance.

[Zackz5000]

Trading no be for everybody, person wey no get patience to learn about technical and fundamental analysis go most likely de lose everytime. But investment na for everybody, know how to create wallet and either buy Bitcoin from exchanges or do p2p transactions with another person. Know how to protect your wallet private keys from lose and theft.

Sure everyone can invest and hodl but no be everybody fit to dey do trading because many things involve join am including emotion. For investment or hodling, the emotion no really dey there because you already zero your mind so na for hodling but trading involve timeous execution backed up with technicalities, news, policy wey go affect the trading decision.

Actually when it comes to trading there a lot of risk involved. and your chance of losing money is always higher than the chance of making profits from it. But when settle down and plan for long term investment it most surely yield good profits for you, so investing in Bitcoin is always good when you invest and hold for a long period of time. because Bitcoin investment is far better when you accumulate and hold for future purposes.

To differentiate between trading and investing is simply when an investor is accumulating Bitcoin and HODL for the maximum year of 3 years that's simply trading and there is much risk attached to it it's not what we should go into expecially if it's Bitcoin Investment, when you accumulate Bitcoin and HODL for 4-10 or more that's simply investment and you won't have much time timing the market and hodling bitcoin for long is simply if you can be accumulating Bitcoin using the DCA strategy regularly accumulating Bitcoin and hodl for long.

[RM`]

You have explained the main differences between trading and investing very well.
Especially the way you mentioned the importance of short-term goals, market volatility and technical analysis in trading — it is a very clear explanation for beginners.
I would just like to add a little bit  Trading usually requires active management, regular market monitoring and quick decision making.
Investing, on the other hand, is more of a passive approach where patience and a long-term vision play a key role.
So, those who are new to crypto should understand that both trading and investing can be profitable, but there are big differences in risk, time and mental preparation.

[Jubilee58]

There was a thread i created last month titled the difference between gambling and trading , so when contributions and replies where coming in, along the line a member of this forum asked this question how to differenciate trading and investing in cryptocurrency? and  I could have love to attach where he asked that question here  but I don't know how to do it because am still new here and am learning as well. And I have also seen in one of the forums where some members where confusing trading to be the same thing as investing, with this similarity, that trading is for short term while investing is for long term.

Now less look at how we can differenciate trading and investing in cryptocurrency, focusing on trading first.

First of all trading has to do with buying and selling of crypto assets within a short period of time, either in a minute, an hour or within a day.

In trading, traders main aim Is to profit from price fluctuations, speculating on Volatility and market trends.

In trading, traders frequently buy and sell crypto assets to capitalize on price movement.

trading carries higher risks due to market Volatility, leverage and the potential for significant looses.

In trading, traders use technical indicators, patterns and charts to analyze market trends to enable them make decisions.

Now less focus on investing.

Investing involves buying and holding of crypto assets for serting period of time, at least 4 to 10 years or there about.

Investing topically carries low risk compared to trading, for people who invest are less expose to short term market functions.

In investing, investors hold onto their crypto assets, accumulating them over time for long term growth.

In investing, investors analyze the underlying value of a crypto asset, and consider factors like, use cases, market potential and it technology.

In investing, investors often diversify their portfolio by holding many crypto assets, in other to reduce risk and increase potential returns.

So I believe with this few points of my, I have answered the question on how to differenciate trading and investing in cryptocurrency.

You have just said it all, both investing and trading carries inherent risk, and in trading investors only look for short term profit, and requires steady monitoring of ones trade.

Trading cryptocurrency requires skills and technicality, if you dive into trading without gathering the right knowledge, and knowing how to use your trading tools very well you will likely fail and end up loosing your money.

[Sammye3]

The difference between trading and investment has being made clear from your post OP. Trading is short term and investment is  long term profit actualisation, and the risk management for both varies as trading is seen to have more risk with its volatility and market structure.

Investment requires patience and proper asset analysis for the future to ascertain the success rate of such asset. It's only natural for investment to be more productive over the years compared to trading with higher possibilities of making profits.

[Onyeeze]

For me theirs a lot of different between trading and gambling, some people may think that trading and gambling is in same space or is something, I gambling you take a risk without knowing how to control it, and gambling doesn't have a specific skill that you will operate and it gives us continues winning, but in trading it have a skill and that skill comprises the basic function of it, so we need to understanding that trading is different from gambling because of the way it operates and the way other things is been done in trading, you most take adequate care before you become successful in trading despite that something we make profit in trading through luck as we get opportunities in gambling

[osasshem]

Time duration for both trading and investment depends on the person in question, but one thing we should not forget is that, as a trader, your eyes are more focused on the trading charts and news around the market, as every move of the market can be beneficial or harmful to the trading pattern. Simply put, trading needs the eyes to be always on the trading charts.

Investment on the other hand doesn't need any much of experience as trading, as it is a something set aside for increase in capital over a desired set period of time. This time is clearly to be a long term duration, depending on when the set range of profit has been acquired, and maybe any other factors that might be included.