A trading operation refers to the full process of buying and selling financial instruments—such as stocks, bonds, currencies, commodities, or derivatives—with the goal of generating a profit. These operations can be conducted by individuals (retail traders), institutions (investment banks, hedge funds), or automated systems.

Key Elements of a Trading Operation:

1. Strategy:

A trading strategy defines the rules and criteria for entering and exiting trades. Common types include:

Day trading: Buying and selling within the same day.

Swing trading: Holding positions for days or weeks.

Scalping: Making small profits from very short-term trades.

Algorithmic trading: Using computer programs to execute trades.