#4 Word of the day: TRADING
📊 What is trading?
R/Trading is the act of buying and selling financial assets with the aim of making a profit from price fluctuations.
💡Example:
You buy Bitcoin at $60,000 and sell it at $62,000 → you make $2,000.
📦 The different types of assets to trade
1. 🪙 Cryptocurrencies (Crypto)
These are digital assets based on blockchain.
💡Example: Bitcoin (BTC), Ethereum (ETH), PEPE, etc.
👉 You profit if the price goes up (buy) or down (sell in futures).
2. 📈 Stocks
These are shares of a publicly traded company.
💡Example: Apple, Tesla etc.
👉 You buy a share → you become a partial owner of the company.
3. 💱 Forex (Currency market)
It's the trading of currencies against each other. Here you bet on one currency against another.
💡Example: EUR/USD
👉 You bet on the rise or fall of one currency against another.
4. 🪙 Commodities
These are natural resources traded on markets.
💡Example: Gold, oil
👉 Often used as a safe haven or for speculation.
5. 📊 Stock indices
A stock index is a grouping of several stocks.
💡Example: S&P 500, NASDAQ
👉 You trade the overall performance of a market.
📄 Types of contracts in trading
1. 🟢 Spot (direct purchase)
You actually buy the asset.
💡Example: Buy BTC on Binance
✔️ You own the asset
✔️ No leverage
2. 🔴 Futures (forward contracts)
You speculate on the price without owning the asset.
💡Example:
You open a SELL trade on BTC → you profit if the price falls
✔️ Possibility of leverage
⚠️ High risk
3. ⚖️ CFD (Contracts for Difference)
Contract based on the price difference of an asset.
💡Example: Trading gold without actually buying it
✔️ Similar to futures
✔️ Widely used in Forex
4. ⏳ Options
Contract that gives you the right (not the obligation) to buy or sell.
💡Example:
You anticipate that BTC will rise → you buy a CALL option
✔️ Advanced strategies
⚠️ More complex for beginners
🎯 Conclusion
Trading simply consists of:
👉 Buy low and sell high (or the opposite when shorting)
But be careful ⚠️
👉 The greater the potential gain, the greater the risk.
