The main difference between trading and investing is that the former provides opportunity to realize profits from volatile trends in the market. In investing, short-term gains and losses are ignored for long-term gains, which are achieved as the company grows. A trader will concentrate on the perceived market value of the stock. He or she would not be interested in the financial health of the underlying company. An investor though would be thoroughly interested in the company’s financial performance more than the share’s trends.

Trading requires holding on to a stock or financial instrument for a day or maybe until it hits a short-term target. Investing involves holding onto a stock for longer durations. Trading involves selling off the stock/financial instrument as soon as it hits the target price or crosses the loss threshold (also called the stop loss price). Investing involves ridding out the downtrends of the market and not to sell unless required.