That is correct! Trading does involve more frequent buying and selling of stock, commodities, currency pairs or other instruments. The goal here is to generate returns that outperform buy-and-hold investing. That rarely happens in practice because trading is known as a zero-sum game. While investors may be content with a 10 to 15% annual return, traders might seek a 10% return each month. Trading profits are generated by buying at a lower price and selling at a higher price within a relatively short period of time. The reverse is also true: trading profits are made by selling at a higher price and buying to cover at a lower price (known as "selling short") to profit in falling markets. Where buy-and-hold investors wait out less profitable positions, traders must make profits (or take losses) within a specified period of time, and often use a protective stop-loss order to automatically close out losing positions at a certain price level. Traders often employ technical analysis tools, such as moving averages and stochastic oscillators, to find high-probability trading setups.