Trading Basics
What Is Trading? A Beginner's Guide
Understand what financial trading is, the different markets, and how buyers and sellers create price movement.
Key rules
- Price is driven by supply and demand imbalances
- Trading differs from investing by timeframe and intent
- Markets include stocks, forex, crypto, futures, and commodities
- Never trade money you cannot afford to lose
- Learn the mechanics of one market before branching out
Trading is the buying and selling of financial instruments — stocks, forex, crypto, futures — with the goal of profiting from price movements. Unlike long-term investing, trading typically operates on shorter timeframes and relies on technical or event-driven signals.
Price is determined by supply and demand. When more buyers than sellers exist at a price, it rises. When sellers dominate, it falls. Understanding this dynamic is the foundation of all trading strategies.