Trading vs. Investing - which one is right for you?

There is a massive difference between trading and investing. So should you trade, or should you invest?

MOST of the horror stories and get rich quick claims you hear about the stock market is actually about trading, NOT investing! So I don’t want this baseless fear to stop you from investing and actually creating wealth. 

I am a trader AND an investor... and in this episode I'm talking about the difference between the two, covering off some serious myths, and diving in to reveal what is right for you.

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I've spent the last 10 years learning from the most brilliant minds in money, wealth, and investing to take myself from $20,000 in debt to a multi six figure investment portfolio. He don't know where to start. I get it being that too, but you just being here means you're part of a group of driven women changing the game and taking control. So join in and follow along as they share the secrets towards more money, more investing and more freedom. My name is Simone Mercer Huggins, and welcome to ms. Wealthy's kiss my money podcast.

I am so excited to talk about this today and do this episode today because trading and investing at two of my, honestly, the biggest, my biggest favorite things and combining them and talking about them together is freaking awesome. So this one is going to be really cool because I know is going to dispel a lot of myths that you have, and probably don't even know that you have around trading, particularly. Uh, and I'm going to also talk about kind of hopefully give you a massive mindset shift that you probably also maybe need to maybe get started, or even just shift your mind into one or the other so that you're crystal clear and I'm going to kinda demystify it too. Cool. All right. Cool. So trading versus investing, which one should you do? What is the difference even so F if you know my story, I started investing over 10 years ago now, and that kind of put me on the path really to start creating financial freedom.

And I fell in love with investing so much that I became a trader. So now I've been a trader for, I don't know, around six years or so, but the difference between the term, just like talking top line. So investing is more of a longer term game and trading is two. You kind of, you do essentially you do it to build wealth long term and neither are about making a million dollars tomorrow. And when you see that stuff, when you see ads, when you see claims about making massive money in like a couple of weeks, honestly, guys like, please run the other way. Like I'm telling you most of those claims, yes, they can happen. You can make massive money in, you know, particularly some stocks that might just boom at the right time, but no one holds a crystal ball and no one knows the exact stalks, for example, that are going to boom tomorrow and make you massive cash.

So everything is a longterm game. They're both about building wealth, but investing is about more about the, kind of the concept of holding, right? So not being so active with your investments and holding them longterm to make sure that they grow over time and you get the benefits of compound interest. So trading is more active. So it's about catching trends, shorter term trends and getting out when that trend stops or when the market starts turning or, uh, you know, so let's say you kind of just need to capture that profit, for example. So it's about being more active and which means that you need to be really on top of it. So when I became a trader, essentially once I developed my system, my trading system, which took, I'll be honest with you almost two years is probably a year and a half. I mean, I was doing it whilst still working full time.

So it was building on top of that. And I was a complete newbie to the world of trading and I want to do it properly. I wanted to make sure I learn, but the learning curve was really steep. So it took me, I think it was actually a year and a half for me to fully develop it, get ready, to get prepared and build the funds for it too. And when I tell people that I am a trader the most common response or reaction or thought that I get is, Oh, so you're a day trader and I'm not, I just want to be clear about that. I am not a day trader, so, okay. First off, what's a day trader basically a day trader means that you buy stocks in the beginning of the day, and then you exit at the end of that day.

So you don't hold any positions. You're not invested in the market overnight because the market can move overnight. There can be fluctuations. They can be, um, company announcements, for example. Um, and depending on what happens around the world. So say you're invested in one country, for example, Australia or the UK, and then overnight, what happens is the U S for example, the U S market is active over six difference in time zones, and then something massive will happen. And then that will then affect other markets around the world. And then when you try and get in the next day, the market's already moved. So a day trader means that you're not invested overnight in that market. And obviously you can trade every month. I mean, I try, I trade in multiple markets around the world, not just Australia trade, I trade U S and Hong Kong and UK, depending on what's happening at the, how that market is performing.

And this is essentially about catching the trends in each market at a different time, because different markets perform in different ways and better than worse and faster or slower than other markets around the world. So the benefit obviously about trading internationally is you get to capture the best at different times. So, as I said, I'm not a day trader and a day trader basically means you are trading in very, very small timeframes. That might be a minute. That might be 10 minutes, 15 minutes, half an hour, even an hour timeframe. So, you know, based on what's happening in, in those minutes or hours, you're trading that trend. And then you're exiting by the end of the day. So I'm going a day trader I trade daily, meaning I trade 24 hour bars. They call them bars, you know, 15 minute bars, 10 minute by one minute bars, hour bars.

So I tried a 24 hour bar on each market around the world. So it means that obviously I'm not sitting behind my computer every, you know, every day, all day, because if you're trading, if you're a day trader, you have to sit behind a computer and catch those 10, 15, one minute alwa bars and be ready and available. The second the market starts changing in the second you get that data again. So I trade daily, which means I spent about 15 to 20 minutes at the end of each day, checking the market, checking my positions, my current, holding my current stock holdings and checking if I need to exit the next day, or if you need to buy the next day. And, you know, that's why I only need to spend that amount of time. The way I have set up my life. I do not want to be behind a computer sitting for eight hours a day, or even more if you're trading into, you know, other markets around the world, cause you need to be there for the other time zones.

So I do not want to sit behind my computer, trying to catch those trends. There is a massive myth around day trading being extremely lucrative, meaning that you can make a lot of money. Can you, yes. You also need a large amount of capital and you need to be spending a lot of money on the data because it's a lot more expensive to be getting that feed coming in so fast and so constantly. So I'm not a day trader because I don't, it doesn't fit with my lifestyle. And I do very well as a trader catching term trends, meaning end of day, uh, in each market around the world. So that's how I trade, obviously as an investor, it's different because you're not looking at it daily. Now when all of my students that come through my program and even my one on one clients, I obviously, uh, make sure that they're set up to just review their kind of investment plan, their investment portfolio every three months, ideally, or at least every six, just to check that everything's in line with kind of where they are, if any life, you know, massive life things happen and they need to, you know, shift, focus or shift their investments to something that's safer or riskier, uh, depending on what they kind of want to achieve, you know, what they want in their life, what they working towards and that sort of thing.

So as a trader, obviously it means I have a lot more knowledge about how the market works, how to make money, uh, and the best way to go about it and protect yourself. So you maximize your returns whilst you minimize risk. Right? So being a trader means that I essentially am super equipped to understand both trading and investing. So in short, I teach women to invest. And the reason I do that is because most people, the majority of people, particularly women have a life. I mean, I have a life too obviously, but I am really into trading. I'm wired that way. Uh, I'm super interested about how the market works and I'm totally prepared to spend the time and money to invest into it. Does that make sense? And I would choose that over other things. So I remember when I was learning to become a trader, I would get up an hour early before work to, uh, you know, do the work that I needed to kind of do.

Uh, when I was working with my trading coach, I would, you know, be learning about the trading software that I needed to learn about, to fully understand the system. I would be reading books, researching systems, I'd be learning to code. That is a really big one that a lot of, um, people don't understand is actually required to be a proper trader. Now I'm a systematic technical trader, if that makes no sense to you. And it sounds really scary, honestly, it doesn't matter if you're an investor, you don't need to even know what that means, but it essentially means I use a system. I use an algorithm that I built myself. So I coded and developed an algorithm that is run through my trading software that, uh, scans thousands and thousands of stocks across different markets at the end of each day and tells me what to buy and sell.

Now it tells me what to buy, but I obviously developed it. So I'm almost telling myself what I'm buying and selling. Um, and obviously to develop an algorithm, you need to learn how to code. I was not a coder before, you know, I'm not scared of tech, but I mean the learning to code, but it was a super steep, um, you know, development. And honestly, like I had to hire people to help me with, uh, even more, uh, really in depth, complicated stuff. It is a whole nother world. And that is why it took me so long to kind of really get started and properly get a system that I was confident in. And yeah, so I just went off a little bit of attendant then essentially. So that, that is what is meant by me being a systematic technical trader technical means it's just numbers based.

So the algorithm is based on number calculations rather than, uh, what you call the Warren buffet model, which is about value investing. It's not about numbers like specifically, it's more about, you know, reading reports, financial reports and documents on the company and looking at the value behind it. You do some financial calculations, like price to earning ratios as a top line thing. But, uh, I am a systematic technical trader. So it's irrelevant who sits in the board of the company to me like that. It makes no difference to me. It's all about, uh, allowing the numbers to show me what the trend is. Anyway. I don't want to get deep dive into that if it's super boring for you, because I can get on a very deep technical jargon bevel that honestly, it's probably not been of interest to most of you, but essentially that is the reason I teach women to invest not to trade because my most people just aren't wired in a way where they want us to give up their weekends, their mornings before work their lunchtimes, to learn about it and develop, you know, an algorithm based on coding and, you know, spend the time and investment that it takes.

Most people just aren't wired that way. And that is absolutely okay. What I like to see more women traders. Yes, of course. And if you want to become one and this sounds super compelling to you and you need reach out and get in touch. Right. But the reason I teach women to invest is because most of you have your primary interests that isn't becoming a trader, you know, like your family or your work life or your passions or whatever it is that you love doing. And that's a good thing. So investing means that you can still build wealth and get still get good returns and still do it in a safe way whilst doing all those things that you love. Right. So I hope that that was kind of, uh, enough of a summary on trading versus investing. I know I have a lot of women that come to me asking about and thinking that they want to become a trader.

And there's a lot of, unfortunately, the market in terms of the, you know, how to learn to do it is filled with a lot of this kind of scam get rich quick tactics, right. Which is possibly what you've seen and maybe why you think you can make a lot of money in it. Can you? Yes. Like I said, in the very start you can. Absolutely. Um, but you also need to spend the time and energy and money even to, to learn how to do it properly, um, to get the better returns that you can get, uh, over and above just invest investing. So I'm also an investor. Um, I invest in real estate. I invest in cryptocurrency. I do not trade it. I invest in it. Uh, and I also invest in stocks, not trade stocks because it essentially just means I have a diversified portfolio that, um, you know, catches different risk and return ratios.

And it means that I'm kind of I'm covered on all bases. Um, so yeah, that's kind of essentially my answer. When, when people say, what do you, what do you prefer doing? I prefer trading, but I also, I'm an investor. So I hope that's explained things for you. You know, if, if you have ever been thinking about becoming a trader, I hope that has answered some questions. I know for some of you that might have been off putting, and you might've be sitting there realizing that you do not want to become a trader, and I'm sorry if I've burst your bubble. But if that is the case, then become an investor and start investing in stocks. You can still be more involved in your investments. There is kind of a way to do it almost in like a, more of a hybrid in between investing in trading.

So you don't to learn to code or develop a system as a trade out, but you can, uh, kind of be a little bit more involved in your investing. I don't mean active investor. I don't mean speculating or trying to guess what stocks might perform that is not ever a wise investment strategy. And I can tell you right now, that is how most people lose money in the stock market, by speculating and guessing and trying to work out what the get rich quick kind of fast returns will be on certain stocks. The biggest thing that you need to do is make sure that you're diversified, um, you know, and not just put all of your money into one thing. That would be my, my biggest takeaway if you're listening right now. And, you know, even if you've started to invest yourself and you're not sure what to do next, obviously I teach women.

So I do that via a course, an online program. And it also comes with a VIP group, um, that, you know, you get access to me and other women that are doing the same thing, meaning creating wealth and building wealth. Now, the other thing I would highly highly highly advocate is to continue to put money into your investments is, is not a one time thing, right? It's not letting me put in some money now, like a thousand or $2,000, and then just leave it. I always advocate for women to continue to put money in, because the faster you do that, the more you do that, the faster your wealth building and wealth creation becomes because you're taking, you're maximizing essentially your compound interest returns. So that is that in a nutshell, I would love to take more questions. So you can always reach out to me and I can cover them in upcoming episodes, because I know that I have just spoken about the two investing versus trading in a very top line overall kind of way. Uh, but I know that it has definitely, probably busted and dispelled some of those myths that you might've had. Alright, gorgeous. That's me for today. I will be seeing you next week.