What is TRADING? for OANDA:EURUSD by VERA_EZ

According to the translation in English, trading refers to the act of buying and selling goods or assets. It is a commonly used term in the stock market, stocks, and cryptocurrencies. It is used to describe the primary occupation of individuals who engage in trading on the stock market.

For traders, trading is not only a profession but also a career. To achieve success in trading, it is crucial to develop a well-structured trading plan.

In essence, trading involves traders participating in the financial market with the objective of identifying investment prospects through buying and selling activities.

II. What is the trading time frame?

The duration in which a trader carries out a trade is referred to as the trading time frame. This represents the period during which traders assess their gains and losses.

The trading time frame can vary widely depending on the trader’s style, spanning from a few seconds to multiple months or even years.

Different trading styles correspond to different time frames:

Position Trading: Long-term (spanning several months to several years)

Swing Trading: Short-term (ranging from days to weeks)

Day Trading: Short-term (conducted within a single day – no overnight orders)

Scalp Trading: Very short-term (lasting only a few seconds to a few minutes – no overnight orders)

III. Popular trading styles

1. Position Trading:

Text: What is position trading? Position trading refers to a trading strategy that involves holding positions for an extended period of time, ranging from several months to many years.

To effectively engage in position trading, traders must combine fundamental analysis with technical analysis to develop a robust trading strategy. Additionally, regularly monitoring weekly and monthly price charts enables traders to assess market conditions.

The main advantage of position trading is that it saves time and reduces stress, as traders are not concerned with short-term price fluctuations.

However, it is important to note that position trading entails larger risk capital, as the stop loss point is wider. Therefore, careful consideration is necessary when employing this approach.

2. Swing Trading

Swing trading is a form of short-term trading where trade orders are held for a span of several days to a few weeks, with the aim of capitalizing on temporary market movements. The objective of swing trading is to take advantage of price fluctuations by identifying optimal entry and exit points based on technical analysis and price action.

This approach allows traders to engage in swing trading without the need for constant monitoring, making it suitable for individuals who are unable to regularly oversee their trading orders.

3. Day Trading

Day trading is a trading approach in which orders are purchased and sold within the same day.

The distinguishing feature of this method is that traders do not hold onto any orders overnight. Instead, they close their transactions at the end of each trading session, regardless of profit or other factors.

Traders who choose to engage in day trading employ technical analysis to identify and capitalize on intraday price fluctuations. They also closely monitor minute charts of intraday price movements.

Unlike other types of trading, day trading demands constant supervision and requires traders to be fully prepared in all aspects at all times.

4. Scalp Trading

This trading technique is adored by traders who appreciate its simplicity and user-friendly nature, making it their preferred method. Scalp trading involves making frequent trades throughout the day to consistently earn small profits.

Scalp trading is characterized by never holding orders overnight or until the next session. It allows for placing multiple trading orders during each session due to the relatively small profits it generates.

It’s important to note that scalp trading carries a high level of risk as it requires a significant win rate to achieve profits. Traders must remain highly focused in order to succeed.

IV. What is a trading plan? What is a trading plan?

A trading plan is a system built to identify and trade securities, taking into account a number of variables including time, risk and investor goals.

7 steps to create a trading plan:

Choose an analysis method

Choose your favorite trading setup

Limit focus on large markets

Research trade holding periods

Determine your risk tolerance level

Make a risk treatment plan

V. Conclusion
What is the concept of trading? Hopefully, Vera’s summarized article on trading, titled “Understanding Trading: Essential Knowledge for Traders,” has provided satisfactory answers to readers’ inquiries regarding the primary responsibilities of traders. Trading is a significant occupation that necessitates not only extensive expertise but also a comprehensive trading strategy in order to attain optimal outcomes. Consequently, traders must consistently engage in research and gain practical knowledge to effectively execute trades.