definition, risks, learn the basics…

Trading, or market operations, was historically carried out from the trading room of a financial institution or stock exchange. Many sites have since flourished.

What is trading?

Trading is an English word commonly used in France to designate purchase and sale transactions carried out on the financial markets. These operations are carried out by traders from the trading room of a financial or stock market institution, or from the Internet in the case of independent traders. Day trading thus corresponds to the speculative activity of traders on financial products (stocks, financial options, futures, currencies, etc.) in the hope of short-term profitability based on market fluctuations. Trading also defines the trading discipline now taught through training provided in business schools or by independent professionals. In addition to the technical analysis which is at the start of the behavior of the participants in the financial markets, the teaching of trading can also evoke the management of financial risks, the monitoring of market operations, as well as the prevention of financial crimes, among others.

The risks associated with trading

Financial products developed to attract individuals pose a financial risk. On the one hand linked to the volatility of the market and on the other hand linked to an excessive use of the leverage effect (the capacity to multiply an exposure on a financial market by immobilizing only part of its capital). There is also the risk of fraud. With the internet, many unregulated trading platforms engage in misleading advertising. The Financial Markets Authority (AMF) has drawn up a blacklist of unregulated trading platforms. And finally, there is the risk of addiction as in gambling.

Learn to trade

To avoid scams, it is recommended to learn about the basics of trading. But be careful not to be fooled by trading training organizations that offer to make you rich. No trading education can guarantee a financial return. To select a first training, you have to look for an obviously honest organization that is able to talk about the main concepts of trading, opportunities and risks. Note that it is useless to pay large sums for a first training in trading.

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