Investing vs Trading vs Gambling

If you want a chance to get rich, you have to do more than just earn money. At the end of the day, you have to be disciplined enough to hold on to the money you earn – and then take the next step in learning how to make your money grow. There are three particular ways in which you can use your money to grow it. You can either invest or trade or you can just gamble. Which one have you been doing?


The investment scenario is theoretically highly complex and ever-evolving. Anyone who takes the time to consider the basics and the various asset groups will benefit drastically over the long haul.

There is a vast universe of investment opportunities, including the following sectors: bonds, stocks, mutual funds, exchange-traded funds (ETFs), real estate, hedge funds, commodities and more.

Investing is for those:

  • Whose goal is to gradually increase their wealth over a period of time
  • Who makes investment decisions with a relatively low or moderate risk appetite based on company reports, balance sheets, P&L statements, cash flow statements and more
  • Who prefers to carry out an exhaustive fundamental stock analysis based on company history, management decisions, future goals and targets and so on.


The aim of day trading is to derive gains from the market action of the underlying financial instrument within the shortest period of time. When you invest in a stock or a stock index fund, you own a percentage of the business or businesses in which you have invested. If the company is profitable and offers dividends, you will gain financially. If your own stock or option price increases, you will sell at a profit. Although the stock market has fluctuated up and down over the decades, the overall trend has grown. In trading, you mitigate the risk and increase the profits.

Trading is for those:

  • Whose aim, in a short time, is to make fast and frequent money
  • Who makes easy trading decisions dependent on the latest and existing market data, make/loses money and easily get out of the exchange 
  • Who have a comparatively higher tolerance for danger
  • Who like to carry out a technical market analysis by looking at price- or volume-based patterns/trends and then taking a short call to sell


When you're gambling, you're just betting with your head, the chances are high. You're investing money into what you think could happen to me. If you're right, you're going to win the money twice the chances the broker is selling you. If you're mistaken, you're going to waste the money you've spent.

Gambling is unsure about that. No matter how much you think about it, you don't have it all. It's just about the likelihood that you don't have the power of it. Gambling patterns go much deeper than most people first understand and far beyond traditional meanings. Gambling may take the form of a desire to publicly justify one's own self or to behave in a manner that is socially appropriate, which results in behaviour in an area that one knows nothing about.

Commercial gaming is also noticeable in people who do so mainly because of the emotional height they get from the anticipation and action of the markets. Finally, relying on emotion or a must-win mentality to make money rather than investing in a quantitative and checked program suggests that the individual is gambling on the markets and is unlikely to succeed in several trades.


Now that we know the difference between trading, investing and gambling, what we need to do is introspect. We may choose to invest if, we are focused on the long term because it takes a long time to see a payoff. Investors often invest in things that are out of favour, because they know that, with time, others will recognize the value and respond in kind.

On the other hand, if one is able to be on their feet all the time and constantly participate in current affairs, one may dream about being a trader. Returns can be large and threats should be minimized with the use of nuanced and sophisticated approaches.

You would be gambling if you listened to someone’s advice and took positions on equities or just took positions because you ‘like’ a certain company. Avoid this and do your due diligence. Be careful, sometimes what we call trading or investing is often is gambling and being clouded with emotions. Trade and invest, but don’t you ever gamble in the money markets!

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