Holding Period : Trader holds stocks for the short term sometimes a matter of hours or days, whereas, when it comes to investing, investors works on buy and hold principle. Holding period for investors may be for some years.
Risk : Both trader & investor are exposed to certain risk in equity as well as in debt markets. Typically trading involves higher risk as the price might move high or low in a short term, while investing comparatively have lower risk as it is art of holding stocks for long term. Daily market movements do not affect much on quality stock investments for a longer time.
Leveraging : Leverage is a mechanism one can use to increase their exposure to the market by allowing them to pay less than the full amount of the investment.Traders usually exposed to higher leverage comparing to investors.
Capital Appreciation Traders are aggressive individuals who loves thrill of the market, so trading is skill of timing the market where as investing is an art of analyzing fundamentals of the company & creating wealth by holding stocks over the period.
Investment Philosophy : Trading is a one day cricket match while investing is a test cricket. Traders perform technical analysis to time the periodic swing of market and make buy & sell position to generate profits in short run. On the other hand, investors analyses stocks through implementing various valuation approaches and wait till stocks reaches to there expected returns.
Trend Riding Vs Value Investing : Traders ride the trend of the market to make money in short duration and don’t necessarily mind losing in order to make profits. Missing trend may lead to loss. However investors keep themselves away from the trends and invest in value. They invest for a longer period of time keeping an eye on the stocks they hold. Investing works on the philosophy of “putting your money to work.”