Trading vs. Investing: Which is more profitable?

Investing is far more cost-effective than trading.

There's also the financial cost of trading. You must either report it as business income or short-term capital gains when you trade.

Regardless of the method, you are taxed at your peak tax rate, usually about 34.5%, after considering the surcharge.

Even if you consider the newly implemented LTC G tax, long-term capital gains are less pricey.

Profits from trading are highly susceptible to black swan events.

There are also Black Swan events such as a trade war, a catastrophe like a dot-com bust, or an event similar to the sub-prime mortgage crisis. These Black Swan events are significant enough to erase years of accomplishment.