What Is Trading And What Are Its Types The term trading is now being widely discussed by many people. The reason is that recently there are more and more young people who have been twisted because they play in the trading sector. So what is trading?
That’s what makes a lot of people start to glance at this one instrument. However, before you decide to spend money in trading, it’s a good idea to know in advance what trading is so that your money doesn’t run out because this one instrument is known to have a big risk.
What Is Trading?
trading is a long-term financial transaction process or the term is trading activity in the form of currency.
In the financial market, trading becomes one of the important instruments because it can generate large amounts of money. However, to be able to reap the maximum profit, you must have the ability to read market movements well.
In general, trading is a basic economic concept that involves the buying and selling of goods and services. This means that the compensation will be paid by the buyer to the seller or the exchange of goods or services between the parties.
In this way, trading can be concluded as the exchange of goods for money. In financial markets themselves, trading refers to buying and selling securities.
As with other instruments, trading aims to make money by selling an asset at a lower price than it is paid for.
In order to make a profit in trading, traders must observe prices over time and look for patterns to predict future prices.
Types Of Trading
There are several types of trading that are popularly carried out by financial world activists, namely :
1. Forex Trading
Forex trading is the trading of foreign exchange rates.
As we all know, the value of foreign currencies always fluctuates over time.
To do forex trading, you can exchange money at a money changer directly or online by depositing some money first.
The profits obtained from forex trading depend on the exchange rate of foreign currencies with the currency we want.
For example, if we buy 10 US dollars today, we have to pay IDR 14,000.
When we exchange it in the future, it could be that the value of 10 dollars when exchanging it back into the rupiah currency becomes IDR 15,000.
Now, it can be seen that the profit is Rp. 10,000.
Trading this type of forex is considered one that generates huge profits. However, the risk is also quite heavy.
2. Stock Trading
Pay more attention not to confuse stock trading and stock investing.
Both of them contain the word stock, but the concept is different. Investopedia even mentions the two are very different things.
Stock trading is the activity of buying and selling shares over a certain period of time, usually quite a short period of time.
Meanwhile, stock investment can be What Is Trading And What Are Its Types summed up as a “saving” activity to earn profits from buying stocks for the long term.
To trade stocks, all you have to do is either sell or buy them when there is a price fluctuation.
Your decision must be right to get a capital gain or profit margin, especially when the stock price is soaring.
3. Trading Binary
Just like other trading, binary trading activity can not be separated from buying and selling.
However, this trade is considered to be very risky although it can also generate large profits.
Many times, binary trading is a scam.
Usually, this type of trading is found in horse racing betting transactions or soccer matches.
In order to do this trade, we have to set a target and risk some money.
If the target is achieved, there will be a huge profit to be gained.
However, if you miss, you will incur losses.
4. Trading Gold
Gold trading is not the same as buying and selling, investing or saving gold.
The way gold investment works is not much different from trading forex and stocks, it’s just that the object being traded is gold.
Gold trading can be done via a broker.
It is important to monitor the US dollar price when choosing this type of trade. The reason is, fluctuations in the price of gold are strongly influenced by the value of the dollar and the economic conditions of the United States.
5. Trading Bitcoin
Since What Is Trading And What Are Its Types the emergence of some time ago, bitcoin trading is one of the newest trading alternatives.
The object of this type of trading is, of course, bitcoin.
Purchases of bitcoins can be made in rupiah currency.
Don’t worry, to be able to trade bitcoin, you don’t always need a large capital.
The important thing is to carefully monitor the rise and fall of the bitcoin price in order to make the right decisions.