Surely you often hear about trading, then what is trading? As the name implies, in English trade has the meaning of exchanging, or also called making an exchange whether it is in the form of goods or services from one party to another. In ancient times, trading activity was known as bartering, and it developed until the discovery of a standardized medium of exchange (in the form of currency). Currently, trading activity is also developing into a money market.
Trading Function
Trading has now developed into a digital trading term that is often used in the world of capital markets and forex and the latest is crypto. Like conventional trading activities, the function is equally to seek profit. In order to achieve and make a profit, traders, called investors, have to work alone to get a profit target when trading.
Trading Characteristics
It is different with passive investment, in the world of trading an investor must move more actively. And if not good at management, investors can lose large amounts of money. So in this case, investors must explore and understand the nature of forex trading, strategies, and various other factors that can affect profitability.
Types of trading
Before going directly into the world of trading, you should understand the types of trading that exist today. And in order to understand and understand in more detail about the world of trading, there are several types of trading in the financial market. Here are some of them:
Stock trading
Stock trading is ownership shares in a public company that are sold to the public through securities brokers. In this case, investors (traders) can benefit when the company whose shares are purchased by the investor increases its income. Or it can be explained simply, that stock trading is an activity of buying and selling shares for a certain period of time but the majority are short.
To be able to profit in stock trading, you have to make the right decisions. In a sense, you have to know when to buy and sell by knowing the movement of price fluctuations.
Forex trading
Another type of trading is forex trading, where forex trading is a type of trade that sells a country's currency against another country's currency involving the main currency markets in the world that occurs 24 hours continuously.
It must also be understood that those involved in the forex market are not only several people, but several parties who are institutional or non-institutional. To make a profit in forex trading, a trader or investor must be good at reading the international market and understand the situation when buying and selling currencies is carried out properly. Traders must understand candles and also world economic news to get the right and profitable trading strategy.
Commodity trading
The commodity market is where a company offsets their future risk when buying or selling natural resources.
For example, if during this time valuable objects such as oil or precious metals could only be traded physically, now you can buy and sell them online and you can benefit from trading these commodities.
To be able to get the maximum profit, you can open a buy position when the price is low and sell it again when the price rises.
Crypto Trading
Well, the latest is crypto trading. Crypto trading has the same meaning as other trading, only the object of the transaction is cryptocurrency. Like forex trading, which trades world currencies, for crypto trading, traders will trade the crypto assets they own. And also keep in mind that crypto has a very high level of volatility and the market is not for a full 24 hours.
When it comes to trading, what should you do?
Only understanding the theory is certainly incomplete if you want to enter the world of trading. Therefore, before logging in you can learn to trade with a demo account, where you can try various strategies and risk management while trading without losing any money. Don't forget to also prepare trading capital by considering the amount of money to be traded, make sure the funds used are side funds or savings, not funds for daily basic needs.
When these two things are ready, you can proceed with opening a trading account. For example, trading forex, then you open a real account at a forex broker and make sure to get the best and trustworthy forex broker so you won't be deceived and lose money if you use a fake broker. Then you can start depositing capital into your trading account. Profits can be obtained if the price increases after making a purchase transaction, or if the price decreases after making a sale transaction.
Be sure to learn a trading strategy that suits your style and avoid emotions and greed when trading. Also learn trading psychology and trading tips from seniors who have been in the trading world for a long time.