A *trading operation* refers to the processes and activities involved in buying and selling financial instruments such as stocks, bonds, commodities, cryptocurrencies, and derivatives. These operations can occur on various platforms and markets (e.g., stock exchanges, crypto exchanges, over-the-counter markets) and can be conducted by individuals, institutional investors, or automated systems.
🔍 Key Components of a Trading Operation:
1. *Market Research & Analysis*
- *Technical Analysis*: Studying price charts, indicators, and patterns.
- *Fundamental Analysis*: Evaluating the intrinsic value based on economic indicators, earnings, or project fundamentals (in crypto).
2. *Trade Execution*
- Using platforms like Binance, Coinbase, Robinhood, or traditional brokers to place buy/sell orders.
- Orders include market, limit, stop-loss, and stop-limit types.
3. *Risk Management*
- Setting stop-loss and take-profit orders.
- Portfolio diversification and position sizing to manage exposure.
4. *Compliance & Record Keeping*
- Adhering to regulatory guidelines.
- Maintaining accurate transaction records for auditing and tax purposes.
5. *Back-Office Operations*
- Settling trades, reconciling accounts, and reporting to stakeholders.