LEARN TO GET STARTED IN THE WORLD OF CRYPTOCURRENCIES

 

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Trading is a fundamental economic concept that involves the buying and selling of assets. These can be goods and services, where the buyer pays the seller. While in other cases, the transaction may consist of an exchange of goods and services between the parties involved in the trade.

In the context of financial markets, the assets traded are called financial instruments. These can be stocks, bonds, Forex market currency pairs, options, futures, margin products, cryptocurrencies and many others. If these terms are new to you, don't worry – we'll cover them all later in this article.

The term "trading" is commonly used to refer to short-term trading - in which traders actively enter and exit their positions in relatively short intervals of time. However, this is a slightly misleading premise. In fact, trading can refer to a wide range of different strategies, such as day trading, swing trading, trend trading and many others. But don't worry, we'll cover all of them in more detail later.

Investing is allocating resources (such as capital) with the expectation of generating a profit. This can include the use of money to finance and start a business, or to buy land with the aim of selling it later at a higher price. In the financial markets, this usually involves investing in financial instruments in the hope of selling them later at a higher price.

The expectation of a return is an essential aspect of investing (also called ROI). Unlike trading, investments typically take a more long-term approach to accumulating value. An investor's goal is to build wealth over a long period of time (years or even decades). There are many ways to do this, but investors typically use fundamentals to find potentially good investment opportunities.

Given the long-term nature of their approach, investors are typically not concerned about short-term price fluctuations. Therefore, they will usually be relatively passive, not worrying too much about short-term losses.