Friends, welcome to the trading training series!
Today I’ll tell you what the world of trading looks like and introduce its basic concepts and terms. It’s your first step toward getting to know the world of financial markets.
The first thing is to understand what trading is. Trading is the process of buying and selling financial assets (stocks, currencies, commodities and other instruments) to profit from the difference between their prices.
Basic concepts every trader knows
Let’s go over the concepts and terms every trader is familiar with:
- Asset: a financial instrument that can be bought or sold in the market, for example, company stocks or currency pairs.
- Exchange: an organized platform where traders buy and sell assets. Among the best known are the New York Stock Exchange and the London Stock Exchange.
- Long (buy position): buying an asset expecting its price to rise. The trader aims to profit from the difference between the buy price and the sell price.
- Short (sell position): selling an asset expecting its price to fall. The trader then buys it back at a lower price to make a profit.
- Stop Loss: an order that limits your potential loss if the asset’s price moves against you.
- Take Profit: an order to close the position and lock in the profit when the price reaches a certain level.
These are just some of the basic concepts you’ll need in trading. Now you know the essential terms and you’re ready to move forward.
In the next lessons we’ll cover trading strategies, market analysis and much more, so you can progress step by step.
Happy trading!
