Investing for long term and trading are two different concepts and have entirely different approaches. However both require a common factor -discipline, to be successful. Key factors for success however vary in these two divergent ways-investment and trading.
Investing requires a keen knowledge of fundamentals, and over a long period, timing does not really matter. Trading on the other hand needs a good mechanical method , where Technical Analysis of the markets, timing , risk assessment together with basic fundamental analysis all make a difference.
Which method is best is a subjective issue , where age, temperament, resources all influence to a certain extent. If one is relatively old, long term investment will only benefit the next generation. Maybe a mix of both is the answer.
TRADING
Here I will talk only about trading and leave long term investing for later.
Trading and analysis are two different fields altogether. An excellent technical analyst may not succeed in trading at all. This may sound a little contradictory by itself. However the fact remains that technical analysis is only a tool and a necessary one at that, for success and is certainly not the end in itself.
Trading by itself is a specialized field. It requires experience, knowledge, temperament, all rolled into one. A trader may or may not be good in investing and vica versa. Trading is an art by itself which can be acquired through perseverance. Certainly guidance and mentorship from an expert helps.
Among all factors governing success the METHOD of trading takes the lead . “Correct Methodology” requires a positive outcome every time with paper losses limited to bearable extent. Then again the chosen methodology must be so hardwired that every varying situation is taken care of and there are no “surprises” A successful trader is one who experiences ONLY SIMILAR situations every time routinely. This by itself is not only a requirement but also a very positive indicator towards success. ROUTINELY is the key word.
Correct Methodology must also be of a type which does not require too much data, for it to become routine. Simplicity and Discipline are the key words. IF you are a successful trader , you can trade with least amount of technical or fundamental input. The amount of money one puts out to use MUST be within the comfort zone. Trying to become rich overnight or taking a trade because the “sixth sense tells me” are two things one must strictly stay away from.