Investor is a person who invests his funds in stocks with a view of capital appreciation over the years. An Investor's wealth grows as the value of his stocks increases over a period.

Trader is a person who buys or sells stocks to earn short term profits. Trader can earn even when the stocks are going up and even when stocks are going down.

There is a very thin line in being an Investor or a Trader for a beginner. And most of the times that line gets crossed. I myself have been caught in this situation. I have also seen a lot of my peers starting their journey as an Investor and without them knowing becoming a Trader.

It is rightly said that investors end up taking bad trades and end up being an investor in those bad trades.

Trader has a very short term perspective as compared to an Investor and knows the importance of stop losses. The importance of preserving capital by putting stop loss, it's really a temperament thing.

Pseudo Traders (Investors) on the other hand shy away from booking losses and end up holding bad trades with the hope that with time they would reap profits.

You don't really need a lot of prior education to become an Investor if you stick to the basic rules. You just need to patience in most cases.

However a trader requires immense education, skill, intellect to actually make money off trades.

Rakesh Jhunjhunwala, the Indian market bull has rightly said out of 10000 traders, 9950 do fail.