What is trading?
Trading is the buying and selling of financial instruments, generally over shorter periods than traditional investing. Traders seek to benefit from price movement, but frequent decisions, costs, and uncertainty make consistent results difficult.
Orders and execution
A market order prioritizes execution, while a limit order sets an acceptable price. During volatile or illiquid conditions, the final execution price may differ from the price a trader expects.
Risk management
Position sizing, exit criteria, diversification, and limits on leverage can help define potential loss before entering a trade. No indicator or system removes market risk.
Analysis methods
Technical analysis studies price and volume patterns. Fundamental analysis studies economic, industry, and company information. Both depend on assumptions and can produce incorrect conclusions.