Trading and investing are sometimes viewed as separate and distinct activities. While there are broad differences, they have much in common. Both seek superior market returns. This means that principles applied in trading can inform investors.

One difference is the time frames employed by each group. Traders tend to be more active, trading more volume more often. At the highest level of investment endeavour there is great expertise, but the frequent testing of trading theory against the rock of daily profit and loss evaluation means there is a greater body of established principles of trading. Some of these principles are easily transferred to investment practice.