Trading

    Trading is the buying and selling of securities, such as stocks, bonds, currencies and commodities, as opposed to investing, which suggests a buy-and-hold strategy. Trading success depends on a trader's ability to be profitable over time.

    Frequently Asked Questions
    • How do I start trading?

      How much money you need to begin trading depends on the type of securities you want to buy. Stocks typically trade in round lots, or orders of at least 100 shares. To buy a stock priced at $60 per share, you will need $6,000 in your account. A broker may let you borrow half of that money, but you still need to produce the other $3,000. To trade options and futures, those trade by the contract. A contract represents some unit of the underlying security. In the options market, one contract is good for 100 shares of the stock.



    • Do day traders make money?

      Results vary widely depending on various trading strategies, risk management practices, and amounts of capital available for day trading. According to University of California researchers Brad Barber and Terrance Odean, they found that many individual investors hold undiversified portfolios and trade actively, speculatively, and to their own detriment.1 Day traders also can be hit with high brokerage fees and other charges that cut into their profits.



    • How does trading and the stock market work?

      The prices of shares on a stock market can be set in a number of ways. The most common way is through an auction process where buyers and sellers place bids and offers to buy or sell. A bid is the price at which somebody wishes to buy, and an offer (or ask) is the price at which somebody wishes to sell. When the bid and ask coincide, a trade is made.

    • How do you make money with options trading?

      Options allow for potential profit during both volatile times, which is possible because the prices of assets like stocks, currencies, and commodities are always moving. No matter what the market conditions are there is an options strategy that can take advantage of those conditions to profit, while taking on the risk of losing money as well.

    Key Terms
    An Introduction to Trading Types: Fundamental Traders
    Stock broker trading online watching charts and data analyses on multiple computer screens.
    How Much Money Do You Need to Start Trading?
    Trading Account
    The Roles of Traders and Investors
    Businessman feeling exhausted
    Common Investor and Trader Blunders
    Trading Plan Definition and Uses
    What Is a Trading Strategy?
    Want to Trade Stocks in College? 5 Tips to Start
    Cash Trading Definition
    Trading Effect Definition
    A stock market chart in black coloring
    What Is After-Hours Trading, and Can You Trade at This Time?
    Is There a Catch to Free Stock Trading?
    What Is a Spot Trade?
    Young traders analyzing computer data.
    20 Rules to Trade More Professionally
    Becoming An Elite Trader: The Game Plan
    Stock market investor looking at chart on computer.
    The Art of Selling a Losing Position
    Hero
    The Investopedia Anxiety Index
    Ipanema Beach in Rio De Janeiro
    What Is a Rio Hedge in Trading?
    Top 7 Books to Learn Technical Analysis
    Image of technical analysis stock chart
    Top 7 Technical Analysis Tools
    The Best Ways to Learn Technical Analysis
    Understanding a Candlestick Chart
    Understanding a Candlestick Chart
    The Most Reliable Indicator You've Never Heard of
    The Difference Between Fundamental vs. Technical Analysis?
    The 5 Most Powerful Candlestick Patterns
    Debunking 8 Myths About Technical Analysis
    Technical Analysis: Triple Tops and Bottoms
    Portfolio
    Average Return Definition
    Hand of a Stockbroker Buying and Selling Shares Online
    Market Indicators That Reflect Volatility in the Stock Market
    Man Working on Construction Plan at Desk
    How to Build a Trading Indicator
    How To Use a Moving Average to Buy Stocks
    Technical Indicator Definition
    What Technical Tools Can I Use to Measure Momentum?
    Wood Textured Graph Bars
    Understanding T Distribution
    Midsection Businessmen Analyzing Charts On Laptop In Office
    Advanced Candlestick Patterns
    Relative Strength
    Comparing Simple Moving Average and Exponential Moving Average
    Using Technical Indicators to Develop Trading Strategies
    Divergence vs. Convergence What's the Difference?
    Stock chart price pattern rebound
    Ulcer Index (UI) Definition
    Economy
    Strategies for Trading Fibonacci Retracements
    Value Added Monthly Index (VAMI)
    What Does Platykurtic Mean?
    Share price data from investors portfolio on a laptop computer screen
    DUAL Commodity Channel Index (DCCI)
    Can I Use the Correlation Coefficient to Predict Stock Market Returns?
    Inexperienced Foreign Exchange Trader Scratching Head
    Tackling Technicals for Beginners
    How to Use Trend Analysis
    The Pioneers of Technical Analysis
    Anticipate Trends to Find Profits
    Technical Analysis That Indicates Market Psychology
    Bar Graph Definition and Examples
    New York Stock Exchange Entrance at Wall Street Lower Manhattan
    The Top Technical Indicators for Commodity Investing
    A Stock Sell-Off Vocabulary Guide
    Paleoclimate reconstruction
    Hockey Stick Chart
    Image
    Technical Analysis of Stocks and Trends
    Understanding a Line Graph
    A hand pressing icons separated by lines
    What Is a Price Channel?
    Horizontal Line Definition and Example
    Close-up of a street-level electronic stock screen on the side of a building at night.
    McGinley Dynamic Indicator
    Adapt The 50-Day EMA To Enhance Your Trading