What Is Trading?

Trading is the act of buying and selling financial instruments - stocks, currencies, commodities, crypto - with the goal of profiting from changes in price. Every trade has two sides: someone who thinks price will go up, and someone who thinks it will go down (or who simply needs out of their position).

The three things a trader is actually doing

A trader, no matter the market, is always answering three questions:

1. What am I trading? The instrument and its typical behavior.
2. When do I enter and exit? The rules that define a valid setup.
3. How much do I risk? The position size and the stop.

If any of those three are missing, you are not trading - you are gambling.

Why prices move

Prices move for one reason: an imbalance between buyers and sellers. When more money wants in than out, price rises. When more money wants out than in, price falls. Everything else - news, earnings, central banks, tweets - is a trigger that causes that imbalance. The imbalance is the cause; the news is the catalyst.

The two broad approaches

• Technical analysis - you study the chart and the behavior of price itself. You assume the chart reflects everything known about the market.
• Fundamental analysis - you study the underlying business, economy, or asset. You askAskThe lowest price a seller is currently willing to accept. When you buy with a market order, you buy at the ask.Read in glossary → what it's worth and compare it to what it's trading for.

Most serious traders use both: fundamentals tell you what to trade, technicals tell you when.

What this academy will teach you

Over the next lessons, you'll learn the market basics, how to read a chart, how to spot a high-probability setup, and - the part almost nobody teaches well - how to manage risk so one bad trade can't take you out of the game.

Let's get started.