What is the trading??

To answer questions ala what is trading ?, let's get into the skin of an investor or a person seeking a return.

Forex trading 4.0

The meaning of trading is simply the act of buying or selling an asset, and then selling or repurchasing with the intention of making a profit on that transaction.

We can do trading in any financial asset that fluctuate, such as: stocks, futures, CFDs, Forex and other financial assets.

Keep in mind that, as we have said before, you can do trading in any financial asset that fluctuate in value, but we have to understand that there are ways to do that we are going to offer different types of collateral.

1. Do it on financial assets traded like stocks plus we offer a guarantee because there will be a regulatory body that oversees the asset and its price.

2. As in the Forex market, the supervisory being an over the counter market entities have no ability to control fluctuations in the exchange rate, but to oversee the agents participating in the market and are under its jurisdiction, such as the broker through which the traders perform the operations, so it is very important to be well informed to choose the best broker.

Types of trading

At the time of trading we can perceive different characteristics. For example, while maintaining an open trade and will allow us to classify the four most widespread forms of trading.

Scalping: scalping traders who do hold open trades in seconds or minutes, usually perform several operations a day with the aim of achieving small profits in each.

Such traders often exploit the most volatile pairs, since those are the situations that allow you to make more profits.

Day trading: the time slot using this type of traders, as its name suggests, is the daily. The Day traders typically open and close their positions on the same day, leaving no order within the market between day and day.

Swing trading: traders who do this kind of trading maintain their open positions for days or weeks, looking for routes where major traders above quote, and focusing on more pairs of currency trend.

Position trading: this type of investor you could classify as an investor in medium and long term, able to hold open positions for months or even years. In these cases, the investor tries to detect long-term trends in the value of the couple.

Forex trading examples

Imagine that we want to invest and, as shown in the above chart, the EUR / USD on November 19, 2014 was approximately 1.2600.

If we think the exchange rate will drop 1.26, which will be placed a sell order with the intention to repurchase at the time to lower the price of par.

As long as we maintain the open trade could describe our trading into one of the four ways described above.

Imagine that we closed our position on December 5, 2014, when the price is 1.2250, in this case we have maintained the order for about two weeks and could qualify as swing traders, as this type of trading positions remain for days or weeks.