There will always be a difference between a trader and an investor. Take Warren Buffet for example, who was and still is one of the best investors this country has seen – if not the world. This man took a plan to flourish along with some experience and knowledge to build an empire. Anyone who believed in him and joined the ride years ago is now a very happy investor due to the huge gains in their initial investments. It takes patience to be an investor as you need to take the bad with the good. Ups and downs of a volatile market can make people sick, hence, influencing their investing decisions. I find people hesitate before making a trade or make a quick sale because their emotions take over. Emotions have to be left out at all times when dealing with any type of investing or trading. Decisions must be made based on factual data; proper and accurate research must be completed before any moves are made. Traders love this type of environment due to the constant change in the price. Trading requires much more risk, especially with the initial investments, since the price can change downwards and keep falling instead of bouncing back. Investing is usually for folks with a lower risk tolerance due to the longer term approach to buying. Regardless of what type of security at hand all investing must be viewed long term in order to realize the most gains. Historically, long term investing in equities has the most earning potential if securities are held for at lest ten years. The S&P 500 average annual returns over a long period of time are higher then bonds, savings accounts, or CDs. Overall, ordinary investors should focus on IRA or 401K accounts in combination with some high yielding bonds or CDs. Depending on the age bracket the portfolio should be allocated accordingly between equities, real estate, bonds, or CDs. Trading on the other hand can be lucrative in a much shorter period of time – obviously the higher the risk the higher the reward. Traders are typically younger since they can afford more risk with time to make up any losses incurred. Trading is a craft that needs to be worked on and is mastered over time. Experience teaches a good trader what to expect; sometimes technical indicators help traders make decisions and in other situations they rely on intuition or overall macroeconomic factors. At the end of the day, it is your money at stake here so make sure you know what the risks are as well as your own expectations. Sticking to a plan is probably the most important piece of investing or trading because it helps us set a level of tolerance, whether for gains or losses.