Trading is the activity of buying and selling assets in the short term to gain profits from price differences.
Simply put: buy low, sell high. The profits are taken from price movements t... See more
Trading is the activity of buying and selling assets in the short term to gain profits from price differences.
Simply put: buy low, sell high. The profits are taken from price movements that occur that day, that week, or that month.
Main Purpose of Trading
Looking for profits as quickly as possible from price fluctuations.
This is different from investments whose aim is to grow money long term.
Tradable Assets
1. Shares: buying and selling company shares on the stock exchange
2. Forex: buying and selling national currencies, for example USD to IDR
3. Crypto: buying and selling bitcoin, ethereum, etc
4. Commodities: gold, oil, wheat
5. Index: a combination of several shares, for example IHSG, S&P500
Time Based Trading Style
1. Scalping
Open and close positions in minutes to hours. Small but frequent profit targets.
Need high focus and continuously monitor the screen.
2. Day Trading
Open and close positions within 1 day. There are no overnight positions.
The goal is to avoid the risk of evening news.
3. Swing Trading
Hold the position for several days to several weeks.
Taking advantage of price “swings” up and down.
4. Position Trading
Hold the position for several weeks to several months.
More relaxed, use big trend analysis.
2 Important Things in Trading
1. Technical Analysis
Study charts, patterns and indicators to guess the next price direction.
Example: look at support, resistance, moving average.
2. Fundamental Analysis
Study company conditions, the economy, and news that can influence prices.
Examples: financial reports, interest rates, inflation.
Trading Risks
1. Risk of big losses: prices can fall quickly
2. Need discipline: emotions of greed and fear are the main enemies
3. It requires capital and time: you can't just guess
Therefore, traders must use risk management. Example: stop loss, not using all capital in 1 transaction.
Difference between Trading vs Investing
Trading:
Short term, daily to monthly
Look for profits from price movements
More active and takes time
Investment:
Long term, years
Look for profits from company growth and dividends
More passive
Conclusion
Trading is buying and selling short-term assets to profit from the rise and fall of prices.
It could be a way to earn income, but it also has high risks.
The key to success: having a strategy, risk management and emotional control.
What assets are you interested in learning to trade in first? Stocks, crypto or forex?
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Trading is the activity of buying and selling assets in the short term to gain profits from price differences.
Simply put: buy low, sell high. The profits are taken from price movements t... See more
Simply put: buy low, sell high. The profits are taken from price movements t... See more
