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Trading is buying/selling of stocks which must be done after prior analysis.
Analysis is ascertaining the market to decide trading strategy.
TRADING is the actual process of BUYING and SELLING.
ANALYSIS:
1. FUNDAMENTAL : Exhaustive,Time consuming and Reliable as it is the detailed study of the company.
2. TECHNICAL : an Artistic Research about the study of DEMAND and SUPPLY in an attempt to determine the market’s direction.
Provides solution “WHEN” to BUY or SELL.
Trading should essentially be just an execution of the outcome of analysis. The analysis should tell us what stock to buy, at what price with what stop loss and target. Trading is the after execution of the analysis.
Trading can be defined as a specific action of buying and selling of stocks/securities with defined risk and a profit expectation, when a specific set of market conditions develop.
Analysis can be defined as forecasting the future probabilities through a variety of mechanisms. There are basically two types of analysis – Fundamental and Technical
Fundamental analysis:
Fundamental analysis is a method of evaluating securities/stocks by attempting to measure the intrinsic value of a stock. Fundamental analysis is the study of the overall economy and industry conditions to the financial condition and management of companies.
Technical analysis :
Technical analysis is the evaluation of securities/stocks by means of studying statistics generated by market activity, such as past prices and volume. Technical analysis do not attempt to measure a securities/stocks intrinsic value but instead use stock charts to identify patterns and trends that may suggest what a stock will do in the future.
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