What are the main differences between retail trading and institutional trading?

<p id="isPasted">Retail traders are those traders who trade individually with their personal accounts in the financial market. On the other hand, institutional traders are entities, who manage their money or trade for several other traders on their behalf. Some examples of institutional traders are Mutual fund houses, insurance companies, pension funds, etc.</p><p>Although a thin line of difference distinguishes trading from investing, i.e. the horizon of investment. Trading is done for a short term, say for some days or weeks, and investing is done for a long term, say for months or years.</p><p>Retail traders have the objective of maximising their money by earning profits from different investment avenues. Some are saving up for retirement, while others are looking to grow their wealth. They make their investment decisions based on personal research, tips from financial advisors, and on the trending securities in the market.&nbsp;</p><p id="isPasted">In the world of securities trading, institutional investors are the heavyweights. They’re the big investors who handle massive amounts of money for other investors.</p><p>Some of the examples of institutional investors are the institutions or houses that deal in pension funds, mutual funds, insurance companies, and hedge funds.</p>

<p id="isPasted">The main differences are that retail traders trade their own money on a smaller scale with less access to resources, while institutional traders manage large sums of money for clients, have access to advanced tools and data, command significant capital, and can influence market prices due to their size. Key areas of divergence include capital size, market access (e.g., IPOs, private deals), the sophistication of tools and research, and their influence on market price movements. &nbsp;</p><p>Retail Trading</p><p>Participants: Individual investors trading for their personal accounts.&nbsp;</p><p>Capital: Trades with personal savings and smaller amounts of money.&nbsp;</p><p>Resources: Limited access to sophisticated trading platforms, proprietary research, and market data.&nbsp;</p><p>Market Influence: Typically lacks the scale to significantly move market prices on their own.&nbsp;</p><p>Goals: Driven by personal financial goals, speculation, or the desire to learn about markets.&nbsp;</p><p>Strategies: Often more agile and can react quickly to news, but can be influenced by emotion.&nbsp;</p><p>Institutional Trading</p><p>Participants: Large organizations like hedge funds, mutual funds, pension funds, and banks.&nbsp;</p><p>Capital: Manages vast sums of money, often billions, on behalf of their clients or portfolios.&nbsp;</p><p>Resources: Extensive access to advanced trading platforms, cutting-edge research, and specialized data.&nbsp;</p><p>Market Influence: Large trades can cause significant market price changes, acting as major "market movers".&nbsp;</p><p>Goals: To meet mandates for their clients or portfolios, which may involve long-term capital accumulation.&nbsp;</p><p>Strategies: Employs sophisticated and data-driven strategies, often with longer holding periods or specific techniques like accumulating shares slowly to avoid price impact.&nbsp;</p>