What difference is there between a Spot Trader and an Investor?

[jossiel]

You can call them junior investors or anything you want that describes them.

There were even comparisons about being a spot trader and scalp trader. So, this is not really a big thing to think of.

If you call someone simply as a trader, they wouldn't mind about that. And the same goes for any type of traders they are and as well as what kind of investors they are.

[YOSHIE]

So, do you think of more differences between these two or a Spot trader is more like a Jnr Investor?

As far as I know, the difference between Spot Traders and Investors lies in the short term and long term, it all comes back to each individual's personality.

For brief clarity, you can see the details below.

The main differences between Spot Traders and Investors lie in the goals, timeframe, and analysis methods: Traders focus on short-term profits from price fluctuations with technical analysis, frequently transact (e.g. spot trading for direct asset ownership), while investors focus on long-term asset growth with fundamental analysis (for example, company health), rarely make transactions, and hold assets to obtain capital gains or dividends.

I think the quote above will lead you to understand the differences and methods of Spot Traders and Investors.

[lornadane]

Labels really don’t matter that much in the end. You can call them junior investors, new traders, spot traders, scalp traders whatever fits the context. It’s all just terminology. People make it sound deeper than it actually is.

There have always been comparisons between spot trading and scalping, long term investing and short term trading, so this isn’t anything new or controversial. It’s just different styles, different timeframes, different risk appetites.

[Gaza13]

Spot trading and investing use the same asset but very different mindsets, a spot trader cares about entries, exits, and protecting capital, an investor cares about fundamentals and long term value, when price drops and a trader holds, it’s usually emotional not strategic.

It's not just spot traders who determine entry and exit points investors have similarities in determining their asset or investment purchases. Both share the same concept or mindset when determining their investment assets. They won't be reckless in choosing an asset to invest in, and they are prepared for the consequences or risks. For example, if they choose an asset like Bitcoin, is there a difference between spot traders and investors? This isn't just about the large amount of funds involved. If they have a good understanding or knowledge of Bitcoin, both will certainly have the same goal, namely the long term.

[M47AK16]

Labels really don’t matter that much in the end. You can call them junior investors, new traders, spot traders, scalp traders whatever fits the context. It’s all just terminology. People make it sound deeper than it actually is.

There have always been comparisons between spot trading and scalping, long term investing and short term trading, so this isn’t anything new or controversial. It’s just different styles, different timeframes, different risk appetites.

Yeah and wish more people knew about it. What you call someone, or their strategy doesn't matter because in the end all that matters is not how they trade but what they profit from it. Plenty of people make a loss in the trading world, majority loses money to minority, and that is for one reason, which isn't their way of trading, it's how they are trading emotionally. Doesn't matter if you are a spot trader, scalp trader, leverage trader, nothing matters but the fact that if you stick with a good plan without getting emotional, you will profit.

[devlin85]

Labels really don’t matter that much in the end. You can call them junior investors, new traders, spot traders, scalp traders whatever fits the context. It’s all just terminology. People make it sound deeper than it actually is.

There have always been comparisons between spot trading and scalping, long term investing and short term trading, so this isn’t anything new or controversial. It’s just different styles, different timeframes, different risk appetites.

Yeah and wish more people knew about it. What you call someone, or their strategy doesn't matter because in the end all that matters is not how they trade but what they profit from it. Plenty of people make a loss in the trading world, majority loses money to minority, and that is for one reason, which isn't their way of trading, it's how they are trading emotionally. Doesn't matter if you are a spot trader, scalp trader, leverage trader, nothing matters but the fact that if you stick with a good plan without getting emotional, you will profit.

It’s true, what matters least are the labels; that is secondary compared to how the plan is executed and how emotions are managed. Most people lose not because they choose the wrong style, but because they don’t respect it when the market moves against them.

[moneystery]

The main differences between Spot Traders and Investors lie in the goals, timeframe, and analysis methods: Traders focus on short-term profits from price fluctuations with technical analysis, frequently transact (e.g. spot trading for direct asset ownership), while investors focus on long-term asset growth with fundamental analysis (for example, company health), rarely make transactions, and hold assets to obtain capital gains or dividends.

I think the quote above will lead you to understand the differences and methods of Spot Traders and Investors.

This is a good explanation for distinguishing between spot traders and investors, as many people fail to understand the fundamental differences between the two and only look at the timeframe, neglecting their mindset and approach to the asset. Many people think that they are investors, but in reality they are just traders who are trapped in a short-term mindset because they often buy assets based on price fluctuations, hoping for quick profits, and often make decisions based on speculation, not the analysis of asset fundamentals that investors usually take, and they consider themselves investors, which reveals their failure to differentiate between the two.

[SamReomo]

So, do you think of more differences between these two or a Spot trader is more like a Jnr Investor?

Yes, there's difference between the two, a spot traders always opens trades in order to make profit from the market in short period while an investors buys with DCA strategy to HODL for long term.

A spot trader could make some mistakes by buying wrong coins which never recover and thus he/she is no way into investing. A investor on other hand tries his/her best to invest with DCA strategy or with dip buying strategy.

A spot trader even buying Bitcoin isn't actually an investor because he/she will buy Bitcoin and if market goes down then he/she can average the buying price by buying more of it at low price, and when he/she reaches profitable zone then he/she will sell the order and make profit.

[yudi09]

The reason for this question is that if a trader who trade on spots is left behind by the market in the case of price decline, that trader would be forced to HODL waiting for the market to recover before selling to make profit... And this is more like a short term investment thereby transforming the spot trader to an investor.... Because an investor buys and HODL either for a long term/short term duration.
So, do you think of more differences between these two or a Spot trader is more like a Jnr Investor?

Traders who trade spot choose to do so because it is less stressful than the risks involved in futures. It is as if they are not afraid of prices that do not match after buying.
If I had to answer the question of what type of trading I would do, I would choose spot trading. Basically, holding when the selling price is not right is not a problem and is not considered investor behavior because such events do not reduce anything, since the definition of an investor is someone who expects a return on their initial capital at a certain time.

[Creeper0]

If you buy and sell an asset depending on the time in the market, profit and loss can be either, in this case you are playing the role of a trader. If you stay in the market for an indefinite period of time depending on the price by chance or by design, then you are a short-term investor or a type of trader. If you have a long-term plan and a goal and you hold assets to meet that goal, then you are an investor. In the case of an investor, there is a long-term time frame and the amount of wealth accumulation during that time is set. The goal of traders is to make a small profit, for investors, to make many times the profit and increase the savings.

[shawonngp]

Spot trading and investing use the same asset but very different mindsets, a spot trader cares about entries, exits, and protecting capital, an investor cares about fundamentals and long term value, when price drops and a trader holds, it’s usually emotional not strategic.

Spot traders and An investors both of people want to try entry in the right time, Investors holding time, but If he can buy low price, Then his profits will be high in the long run, buying at high rate means you have to wait long time to get your expected profits, entry time is important. Spot traders need cares also exit because If he can't exit in the right, his trade can be close with loses.

[acener]

The reason for this question is that if a trader who trade on spots is left behind by the market in the case of price decline, that trader would be forced to HODL waiting for the market to recover before selling to make profit... And this is more like a short term investment thereby transforming the spot trader to an investor.... Because an investor buys and HODL either for a long term/short term duration.
So, do you think of more differences between these two or a Spot trader is more like a Jnr Investor?

Traders cut loss when their trade didn't go the way they expect it.
They set limit on how much they could earn or lose on their trade, while HODLer's doesn't care about the price they would hold it no matter what happens.
If the spot trader would just keep on holding their token when it is already dropping down and keeps on waiting for it to recover then what's the use of cut loss for them to be a trader?

[tvplus006]

Traders cut loss when their trade didn't go the way they expect it.
They set limit on how much they could earn or lose on their trade, while HODLer's doesn't care about the price they would hold it no matter what happens.
If the spot trader would just keep on holding their token when it is already dropping down and keeps on waiting for it to recover then what's the use of cut loss for them to be a trader?

It is important to distinguish between an investor and a trader who, due to non-compliance with risk management, continues to hold a losing position in the hope that someday the price will return to the purchase price and thus he turns from a trader into an investor.

[terrific]

If the spot trader would just keep on holding their token when it is already dropping down and keeps on waiting for it to recover then what's the use of cut loss for them to be a trader?

I am guilty with that because I've left open trades and didn't set cut loss in belief that they'd pump after putting the order.
But it's true, we have to max out the usage of cutting our losses as a trader and even as an investor.
There will be times as well that we have to cut loss so that it won't damage too much our assets if we do.

[CageMabok]

...

Spot traders and An investors both of people want to try entry in the right time, Investors holding time, but If he can buy low price, Then his profits will be high in the long run, buying at high rate means you have to wait long time to get your expected profits, entry time is important. Spot traders need cares also exit because If he can't exit in the right, his trade can be close with loses.

While spot trading can still result in losses if the entry and exit points are incorrect, each trader who trades in that spot can still see the assets they purchased in their spot wallet without losing the initial purchase amount, even if their balance has decreased due to the coin's price crash. This means that spot traders can still wait for the coin's price to rise again because they still have the assets to wait for it, without having to spend more capital to buy if they don't want to buy during adverse market conditions.

However, when market conditions appear to be adverse and the price has dropped significantly, that is the entry point for those with substantial capital to buy more. And I think that's the right time to buy, because traders who aren't brave enough to buy at a high price can use that situation as an entry point. But what you're referring to above is probably futures trading, not spot trading, where even if a trader loses, they still have a certain amount of coins to hold. In futures trading, any trader who experiences liquidation will have their balance reduced to zero.

[shinratensei_]

Traders cut loss when their trade didn't go the way they expect it.
They set limit on how much they could earn or lose on their trade, while HODLer's doesn't care about the price they would hold it no matter what happens.
If the spot trader would just keep on holding their token when it is already dropping down and keeps on waiting for it to recover then what's the use of cut loss for them to be a trader?

Some trader just don't like the idea of losing and keep holding onto their position to avoid realizing that unrealized PnL. Most of the time it's when they are so sure the asset they are holding gonna go up at some point and only matter of time.
I trade bitcoin a lot and when I got caught in a flash dump I just hold it and didn't cut lose, the reason being I don't over leverage so I can endure the negative PnL and the funding rate while also treating bitcoin as a good store of value that will eventually go up because fiat inflation is a thing which guarantee the price to increase.

[Swordsoffreedom]

If the spot trader would just keep on holding their token when it is already dropping down and keeps on waiting for it to recover then what's the use of cut loss for them to be a trader?

I am guilty with that because I've left open trades and didn't set cut loss in belief that they'd pump after putting the order.
But it's true, we have to max out the usage of cutting our losses as a trader and even as an investor.
There will be times as well that we have to cut loss so that it won't damage too much our assets if we do.

In trading, we need to strictly adhere to the strategy and plan we have set out. Only in this way can we control risk and survive in the market in the long term.

However, I don't think cutting losses is necessary in long term investing. Once you've decided to become a longterm investor, you need to have a longterm vision. If long-term investors focus too much on short-term fluctuations, it can sometimes cause them to be driven out of the market before a strong uptrend occurs. Therefore, instead of using stop-loss, the DCA method would be more suitable in this case.