What is trading?

Trading is a fundamental economic concept that involves buying and selling assets. These assets can be goods and services; where the buyer pays their value to the seller. In other cases, the transaction may involve the exchange of goods and services between trading parties.

In the context of financial markets, the assets that are traded are called financial instruments. These assets can take the form of stocks, bonds, currency pairs in the forex market, options, futures, margin trading products, digital currency, and many more. If these terms are new to you, don't worry - we will explain them all later in this article.

The term trading is usually used to refer to short-term trading, where traders actively enter and exit positions in relatively short time frames. However, this is a somewhat misleading assumption. In reality, trading can refer to a wide range of different strategies, such as day trading, swing trading, trend trading, and many more. But don't worry. We will cover each of them in more detail later.