Trading by Rolf Schlotmann EPUB & PDF – eBook Details Online
- Status: Available For Free Download
- Author: Rolf Schlotmann
- Language: English
- Genre: Sports Fiction
- Format: PDF / EPUB
- Size: 2 MB
- Price: Free
What is trading?
To understand our role as traders better, we need to ask ourselves – what
is trading really about?
The commonly used definition of trading is: a trader tries to make a
profit by entering into trades or betting on price movements, by
anticipating the future price trend as correctly as possible.
We will now examine the various components of this definition in more
detail.
1.1 The profit potential
In trading, it is possible to bet on rising as well as on falling prices and
thus to make a profit even if the stock market or another financial market
falls.
If the trader believes, based on the findings of his/her analysis, that the
stock of Apple or the exchange rate between the EUR and the USD will
appreciate, he/she can buy the shares or the corresponding currencies today
and sell them at a higher price later to make a profit.
And even if the trader assumes that prices will go down, he/she can take
this into account in his/her trading plan and enter a so-called sell (short)
trade with which he/she profits when prices on the underlying assets
depreciate.
Naturally there is always the risk that the price trend will not be as per
the trader’s expectations and hence he/she has to close the trade with a loss.
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