A trader and an investor both participate in financial markets, but their goals, strategies, and time horizons are very different. An investor focuses on building wealth over the long term by buying and holding assets such as stocks, bonds, or real estate. They rely on the fundamental value of a company or market, expecting growth and income through dividends or capital appreciation. Investors are generally patient, accepting short-term fluctuations in exchange for potential long-term gains.

A trader, on the other hand, seeks to profit from short-term price movements. Traders often rely on technical analysis, chart patterns, and market trends to time their entries and exits. Their holding period can range from minutes to weeks, depending on whether they are day traders, swing traders, or scalpers. Unlike investors, traders focus less on fundamentals and more on market behaviour and volatility.

Risk tolerance is another major difference. Traders usually face higher risks due to frequent transactions and the possibility of sudden losses, while investors spread risk over time with diversification and long-term growth. In short, an investor builds wealth gradually, while a trader aims to capitalise quickly on price changes. Both roles require discipline but serve very different financial objectives.