what trading is and how it works

What trading is and how it works

November 12, 2021
6 months ago

Trading has been around for centuries and is a worldwide phenomenon. Trading has many types of assets, but the most popular types of trading are futures, forex and stocks. The trading market is very broad. Getting started in trading can be as easy as using an app on your phone or as complicated as researching different companies and charts before investing in them.

What is trading? Trading is when someone gives you a security (like a stock, for example) that they own, and you own it for a period of time. If you want to trade that stock, you exchange it with someone who wants to buy it. The timing and price of the sale depends on the broker you are trading with. When you are ready to sell, you simply hand over your shares and the person or entity interested in them takes possession of them.

To give another example, when you trade futures, you have a contract, or a contract to sell a certain amount of shares at a certain date and time. When the date and time arrive, the contract is automatically settled.

How does it work? As we have explained, the trading process requires you to "buy" a specific stock, future or commodity, such as a Bitcoin, currency or commodity, at a specific price; and at a certain point in time sell.

The time between buying and selling will depend on the study of the charts that you will have to make, so that you can calculate the exact time of entry into the operation and exit, where you will assume some risk on the investment you have made.

How to trade? The easiest way to trade is simply by placing a buy order for a particular asset with a broker. Here is a list of Best brokers for trading in 2021.

Nowadays it is important to educate yourself about the basics of trading to learn more about this complex and fascinating business. Trading allows you to make money, as long as you are well educated and know the probabilities of the investments you plan to make.

Finally, we would like to remind you that you can continue learning Trading in the best way with the Canal Trader Masterclass, with 40 financial training sessions full of formative and human quality, which will help you to order and structure the market with head.

We hope to have helped you once again, may the market be with you!

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