Trading and investing both involve buying and selling financial products, but the main difference is usually the time period, strategy, and goal.
-Trading generally focuses on shorter-term price movements. Traders may buy and sell products more frequently, sometimes within the same day or over several days or weeks, with the aim of benefiting from changes in market prices.
Trading can be done with both leveraged products, such as CFDs, and unleveraged products, such as physical shares or ETFs.
For example, if you buy a share at $100 and sell it a few days later at $110, this can be considered trading, even if no leverage was used.
-Investing, on the other hand, usually focuses on the longer term. Investors typically buy assets and hold them for months or years, with the aim of benefiting from the asset's long-term growth and, in some cases, receiving income such as dividends.
For example, you may buy a share at $100 and hold it for several years because you believe the company will grow. If the share later reaches $150, the value of your investment has increased.