struments like stocks, shares, and other securities with the goal of making a profit. It's a dynamic process where traders speculate on price movements, aiming to capitalize on short-term fluctuations. Share trading specifically refers to trading in company shares through a stock exchange.
Key aspects of share trading:
Buying and selling:
Traders execute trades by buying (going long) when they anticipate a price increase, or selling (going short) when they expect a price decrease.
Short-term focus:
Share trading is often favored by those seeking short-term profits, unlike long-term investing where shares are held for extended periods.
Market knowledge:
Successful trading requires a deep understanding of market trends, company performance, and other relevant economic factors.
Risk management:
Trading involves inherent risks, including potential losses. Effective risk management strategies, such as using margin or setting stop-loss orders, are crucial.
Leverage:
Trading can involve leverage, allowing traders to control larger positions with smaller amounts of capital. However, leverage can magnify both profits and losses.