What is trading & how does it work?

What is trading? Trading is the buying and selling of financial instruments in order to make a profit. These instruments range from a variety of assets that are assigned a financial value that goes up and down – and you can trade on the direction they take. You may have heard about stocks, shares and funds.

What is financial trading?

Financial trading is no different to any other form of trading: it’s about buying and selling assets with the aim of making a profit. Discover key concepts, participants and markets involved in financial trading. What’s on this page? What is trading? What assets and markets can you trade? Who trades and invests? How does trading work?

What is the difference between trading and investing?

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. How do I start trading? Do day traders make money? How does trading and the stock market work?

Do long-term investors trade constantly?

In fact, many successful long-term investors do not trade constantly. All trading involves buying and selling investments, but the way your trading is classified depends in large part on your timeline. Day trading When you day trade, you buy and sell stocks, ETFs, and other assets multiple times a day.