What is Trading ?

What is Trading ?

Trading is the buying and selling of securities, such as stocks, bonds, currencies and commodities, as opposed to investing, which suggests a buy-and-hold strategy. These instruments range from a variety of assets that are assigned a financial value that goes up and down – and you can trade on the direction they take. You can get exposure to markets as diverse as the S&P 500, the FTSE 100, global currencies like the US dollar or Japanese yen, or even commodities like lean hog or cattle. Trading success depends on a trader’s ability to be profitable over time. 

Trade is a primary economic concept which involves buying and selling of commodities and services, along with a compensation paid by a buyer to a seller. In another case, trading can be an exchange of commodities/services between parties. Trade can occur between producers and consumers within an economy.


What are the advantages of Trading?

Traders can work for financial institutions, in which case they will trade via the funds and credits of a company, and they are paid a combination of bonus and salary. As another option, traders can work for themselves too, as in they can trade with their own money and credit. However, with this option they will also keep all of the profit to themselves.


Highlights of trading:

  1. Trade involves exchange of commodities and services, mostly in return for money.
  2. Trade can happen within a country, or amongst trading nations. In case of international trade, the theory concerning comparative advantage speculates that trade proves to be a benefit to all parties, even though critics contend that it leads to stratification within countries in reality.
  3. Economists recommend free trade amongst nations, but protectionism like tariffs might present themselves because of political motives.


Latest Trends:

When it comes to foreign trading, the following are the latest trends:

  1. Forced dynamism
  2. Cooperation among countries
  3. Growth in emerging markets
  4. Technology sharing
  5. Liberalisation of cross-border movements

To get started, you’d need to create an account on a trading platform that offers these markets. Metfx online trading platform has a variety of financial markets that enable you to speculate whether the price of an asset will rise or fall. Plus, we’ve compiled a trading for beginner’s guide to assist you in getting familiar with the different markets.

Trade with Metfx, Trade like a Pro


Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. Read our Risk Warning Policy