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Today I talked to my friend and brought out a perfect analogy about investor and trader.  The analogy is trader is like a grocery store owner, small business but he knows his business well. His store sells the most common use of items but not something people use once a year. In short, like apples, oranges, eggs …etc are the most wanted by people daily and he won’t worry about he need to store them forever. This is same for traders, they should know their stocks well and more importantly, they need to know there always people want them. Also the turnover rate would be high since he needs to make bargaining profit to cover up his business. All he needs to know the fair price of an apple, say $1. When he sees it’s selling for $.8, he will load up couple boxes and sell them at $1.1 to make a profit. This is similar to what I suggest; don’t set stop loss order, instead set a limited sell for 5-10% over market price.  This case, when the price spikes and hits your order, you will make a quick profit. And when he sees apple selling for $.4, he will load up even more but not scare by the price of apple because he knows he can always sells them at a higher price.

In contrast, investor is like an antique shop owner he has wild and in-depth knowledge about some uncommon items. He will find and buy items where no body knows its true value and then he sells them for a huge amount of profit after people figuring out its true value. This way, which is much harder than be a grocery store owner and you need to be rich or not to worry daily living before you can open an antique shop.
The conclusion is there are many grocery store owners but very few antique shop owners and become a grocery store owner is much easier than an antique shop owner.