Trading basics
Learn what trading is and open your first account!
An exchange is a place where transactions between buyers and sellers take place
Trading, like any other activity, requires a systematic approach. Understanding market entry and exit points is only the tip of the iceberg. Equally important questions are - what and why is it better to trade?
We will help you to understand what the exchange is and how to earn on it, as well as to choose the most convenient trading strategy.
The stock exchange is an organized market where the rules of perfect competition apply. Prices are formed solely under the influence of supply and demand and are published daily. Their fixation and following publication is made at the beginning and at the end of the working day.
All market participants are provided with the same conditions for making deals and trading operations. All market participants are subject to unified rules established at the Exchange. Exchange transactions are conducted according to the auction principle for buying and selling commodities, securities and currency.
The main feature of exchange trading
Exchange trading does not suppose physical presence of trading objects - goods and securities - at the moment of transaction. Availability of goods of appropriate quality and in sufficient quantity in warehouses, as well as securities in banks with the right of ownership to them, is confirmed by appropriate documents.
There are benefits of trading on the stock exchange for all participants of stock exchange transactions:
- The suppliers on the exchange benefit from the sale of their goods
- Buyers get free access to information about products and prices, have the opportunity to use for their benefit free competition between sellers
- Exchange players receive commissions for trades executed.
Traders
Traders are divided into professional and non-professional market participants. Professional traders must have certificates from the Federal Financial Markets Service, which has now been abolished and its powers transferred to the Central Bank of the Russian Federation.
Professional traders should have specialized education. The difference between a professional trader and a non-professional trader is that a professional trader is completely independent in making his decisions.
On the one hand it is a greater risk, but on the other hand the result of the activity depends solely on the professional trader himself.
Advantages
- with good luck and professionalism there is an opportunity to earn a lot of money
- independence (for a professional trader)
- excitement of constant play
Disadvantages
- risk of losing
- people's attitude towards traders as fraudsters and speculators
- high emotional tension
Today, there are many different educational institutions that specialize in training in the trading profession, including training courses, seminars, webinars and more.
Ciraxes provides you with the necessary materials and knowledge to successfully master trading.
Additional information
Key terms
Ask (demand) - the selling rate for the underlying product.
Deposit - financial means on the trader's account.
Forecast - forecasting a trend using technical analysis and market conditions.
Limit - the minimum or maximum in price.
Limit order - the set value of buying and selling.
Margin - a safety deposit to cover possible losses arising from currency trading.
Market order - executive order to buy - sell at the best price at the moment.
Market price - the value of the price at the moment.
Offer - A currency rate/invitation to make a transaction.
Open position - a position in the market at the moment without a reverse trade.
Pip(s) , point - point, a measurement of price difference in the market.
Profit - trader's revenue from a deal.
Range - the maximum, minimum price level for a separately allocated period.
Stop - loss - execution of closing a deal when a certain level is reached, preventing losses.
Stop - order - closing a deal at the current price in order to limit losses.
Spread - volatility of the price in buy-sell.
Transaction - opening, closing of a position.
Volatility - is a measure of price change.
Technical analysis
This is the study of data on how the price changes in response to market activity. You can see supply and demand levels on a chart and track investor sentiment. Technical analysis tools help to predict where the price will move next.
So, knowing technical analysis, you won't be able to answer the question, "For what reason did the price change?" but you will understand in which direction it is likely to change in the near future.
News analysis
This is a strategy in which a trader makes trades based on the news agenda. The purpose of such analysis is to determine possible changes in the price dynamics of assets and make appropriate trading decisions.
However, it is important to remember that news can be subject to distortions or errors, so it is necessary to take a critical approach to analyzing it and always complement fundamental analysis with technical analysis and other market assessment tools.