That’s an excellent question. The quick answer is to make money but if we dig a little deeper we will see that the stock trader doesn’t just want to make money, he wants to make a lot of money. In fact, the stock trader is looking for larger returns that he would otherwise get by simply investing in a stock or a mutual fund.

It is true, however, that some people trade stocks for the action. These types of trades like the thrill of entering and exiting trades. Typically these traders trade frequently because they are more interested in the feeling they get from the action than the profits being made.

Profitable stock traders focus on profits. They are less interested in the action of stock trading itself and look at their trading as a business. These are typically the type of stock traders that continue to make money over the long haul.

In more traditional stock investing a big, long-term move is usually anticipated. Stock investors position themselves for this long-term move and look to make a profit.

Stock traders, on the other hand, look for profit opportunities within these long-term moves. In other words that stock trader realizes that there are numerous smaller moves that a stock will make during a long-term move. Stock trading looks to maximize profits by catching some of these smaller moves along the way.

The reason any of us should want to trade stocks rather than just buy and hold is that we want to make larger returns than buy and hold will typically gives us. If we were not seeking larger returns then it would not make sense to trade stocks because there is extra effort involved in taking advantage of the increased number of trading opportunities. Remember also with these additional opportunities come additional trades. With additional trades there are also additional transaction costs. We must keep these increased costs in mind because left unchecked they can mean the difference between profitable and unprofitable stock trading.