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Some basic definitions about trading the Financial Markets..
What is Trading?
Trading in general means the act of buying or selling financials assets (securities, commodities or other) in order to make a profit in a short time period.
What is the Difference between Trading and Investing?
Actually Trading is a short-term version of investing. Two things mainly distinguish these two practices:
(1) The Time Horizon
Investing has a time horizon from 1 year to many years. Trading has a trading horizon of intraday to a couple of months.
(2) Trading Sides
When investing you may profit only from the appreciation of the price of a financial asset, while in trading you can profit from both sides (appreciation and depreciation of the price).
Today traders may choose among tens of financial markets and from a variety of thousands of different assets. The most common market for trading is Forex (Foreign Exchange) but Stocks, Indices and Commodities are very popular too.
What is a Trading Account?
A trading account is a personalized account opened in a brokerage company that enables an individual to buy and to sell securities from around the world. Trading has become computerized during the past couple of decades so a trading account nowadays is most commonly opened online.
What is Forex Trading?
Forex trading is the act of buying or selling Forex Currencies using a Forex Broker. You can choose from a wide variety of currency assets categorized as majors, minors and exotic currencies. Trading Forex nowadays is done online. There are tens or even hundred of online Forex brokers to choose among.
After finding a Forex Broker and depositing funds you will be able to execute any order. Trading orders are placed in a few clicks while you can take advantage of high capital leverage (up to 1,000%). Your cost includes the trading spread and / or trading commission paid.
What is Trading?