An Introduction To Trading
Trading is a process wherein exchange of materials takes places
. It implies saying that one item is bought in exchange for the other. One could imagine it as a daily activity where one buys are a required item in exchange for his/her native currency for an amount which depicts the value of the item bought in terms of currency.
Trading can be imagined in various types. In the modern day terminology of trading, one would categorize trading into the following.
1- Stock trading
2- Future and commodity
3- Forex
Regardless of the type of trading, the basic concept is the same and reliance on the aspect of exchange.
On thorough research into the various aspects of trade, one can easily observe that there can be different types of traders in the market.
They can be differentiated as:
Scalpers: Those traders who try to look for profits from those several transactions they carry within the day. Usually the profits are smaller in proportion.
Momentum traders: those traders who look into movement of certain stocks and trade accordingly in those stocks. They basically observe the direction in which certain specific stocks are moving and accordingly trade to derive profits out of the trade.
Technical traders: Those traders who rely on instruments like trend charts, smart charts, momentum charts and speculate the movement of stocks. Using this technical information they trade accordingly.
Fundamental traders: Those traders who rely on speculating by looking at a companys fundamental analysis. For this they rely on the companys performance information and other information related to the profit and loss in the companys earnings report.
Nowadays there are several brokerages providing their customers with online portals so that their clients can also experience the trade in real time. Apart from providing the facility of trading in real time using these portals, most of them also provide exclusive access to their research related to various aspects of trading to most of the customers. In some cases, some of the data is available to the customers on paid basis.
Online stock analysis is of specific significance as it makes sense most of the time to trade based on the fundamentals governing the movement of stocks.
Not always will the above types of charts will be useful. A thorough technical analysis also needs to be read in conjunction with other analysis pertaining to political and economical implications brought about in the country. These implications are powerful enough to change the course of trade.
Forex trading especially is volatile in the above said aspect. Moreover the volatility comes into picture due to its 24 hr active characteristic. Forex trading is something which is done all round the clock and no time limit exists in its case unlike normal stock trading.
by: Tauqeer Hassan
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