Section I: Concept and types of trading
What is trading?
Trading is the process of buying and selling financial assets in financial markets with the aim of making a profit. following this, Financial assets can include stocks, commodities, currencies, bonds, real estate, etc. for the same reason, Trading is an important tool that individuals can use to increase their wealth and achieve their financial goals.
Different trading types:
Trading on Central Exchanges
Trading on central exchanges is carried out by authorized brokers who facilitate investor sales and purchases. further, In this type of trading, transactions take place on a specific exchange and are subject to strict rules and regulations to ensure transparency and integrity in the process.
real estate market Trading
Buying and selling real estate, whether commercial, residential, or industrial, is considered trading in the real estate market. For many investors, real estate investment is one of the most well-liked and long-lasting investment options since real estate may improve in value over time with sustained demand.
Trading in the cash market
In the cash market, foreign currencies are bought and sold and exchange currencies with the aim of making a profit. besides, The monetary market is the world’s largest financial market in terms of daily trading volume. Trades depend on currency fluctuations and changes in demand and supply.
Section II: The basics to be absorbed before you start trading
The concept of stocks and what beginners should know
Stocks are instruments that represent an ownership stake in companies. When investors own shares, they become partners in the company and are entitled to benefit from dividends and increase the value of their shares. Beginners in trading must understand the fundamentals of stocks such as the company’s quality, financial strength and potential entry and exit points.
Understanding economic news and its impact on financial markets
Economic news plays a crucial role in financial market movements, and announcing important economic figures could lead to changes in financial asset prices. Therefore, beginners must understand how to read economic news, assess its impact on markets and make appropriate financial decisions.
Variables affecting the value of currencies in the foreign exchange market
The foreign exchange market is the world’s largest financial market in which foreign exchange is traded. Many variables can affect the value of currencies such as the global economy, major benefit, inflation and political turmoil. Beginners should understand these variables and analyze them to make thoughtful trading decisions.
Section III: Trading Strategies
Negative and positive trading strategies
Trading strategies vary between positive and negative. Some traders use purchase and retention strategies to anticipate an increase in asset value, while others use selling strategies to hold assets for a short time and make a profit from short price changes.
Market indicators and how to use them to make thoughtful trading decisions
Market indices are used to analyze financial market performance and anticipate its future movement. Popular market indicators such as the Relative Strength Index (RSI) and the Intermediate Cross-Action Index (MACD) include. obviously, Using market indicators is an important part of thoughtful trading strategies.
What is capital and how to manage it effectively
Capital is the amount you use in trading to buy and sell assets. in fact, Effective capital management is vital to beginners’ success in trading. Here are some tips for effectively managing capital:
- Determine a specific percentage of the capital you should be prepared to risk in each transaction.
- Divide capital into small parts or “centres” to reduce risk and increase opportunities.
- Establish strict risk management rules such as stop loss and stabilize a transaction’s profits.
- Strictly track transaction performance and analyze results to improve capital management.
Section IV: Transaction execution and trading practice
Using electronic trading platforms and understanding their core functions
Using electronic trading platforms is crucial for entry-level traders. moreover, The functions of these basic platforms must be properly understood and how to use them. Some of the important functions of electronic trading platforms include:
- Open a trading account and log into the platform.
- Access to financial statements, market news and preferred assets.
- Use technical analysis tools and graphics to evaluate the market and make deliberative decisions.
- Make deals and manage open positions effectively.
- Track profits and losses and generate performance reports.
Sale and Purchase Steps in Trading
When a newbie trader executes trades, he must accurately understand the steps of selling and buying. Here are the basic steps:
- Identify the assets you wish to buy or sell.
- Determine the proper size of the transaction and set the system to execute the transaction.
- Determine the levels of stop loss and the profits of the target transaction.
- Continuous monitoring of the transaction and adjusting orders if necessary.
- Close the transaction when the targeted profits are made or the loss is stopped.
How to calculate net profit and loss in a transaction
as I have said, Calculating net profit and loss in a transaction gives the newbie trader a clear idea of the performance of the transaction. To calculate net profit and loss, the following steps must be followed:
- Calculation of profits or losses per share or unit of a working asset.
- Multiplying profits or losses by the number of shares or units traded in the transaction.
- Calculate commission costs or fees associated with the transaction and deduct them from profits or add them to losses.
- Calculate differences in transaction prices (if executed over several days or at different prices).
- Collect profits and losses calculated for net profit or total loss.
Some common mistakes that beginners make in trading and how to avoid them:
- Do not develop a trading strategy before starting.
- Work based on feelings rather than knowledge and analysis.
- Ignore the cessation of loss and continue to work with a lost deal.
- Venture risk management and differences in the size of trades.
- Ignore technical and basic analysis and rely solely on luck.
Section V: Explanation of trading for beginners to analyze the market and choose the appropriate strategy
Analysis of fundamentals and its relevance in decision-making
Fundamentals analysis is the process used by traders to assess the health and performance of companies and assets to be purchased or sold. since Analysis of the basics is vital for deliberative decision-making. Some factors that should be taken into account in the fundamentals analysis include:
- Estimate the company’s profits and distributions.
- Valuation of debts and company’s obligations.
- Follow-up on economic and political events that may affect financial markets.
- Analysis of Japanese candle patterns to predict price expectations.
- Use popular technical trading indicators such as RSI and MACD to measure momentum and purchasing saturation.
FAQs in Beginner Trading Explanation
How long does it take to succeed in trading?
There is no particular time for success in trading. It depends on how committed you are to learning, developing your skills and adapting to market changes.
Can I rely on economic news only to make deliberative decisions?
Although economic news is important in market analysis, it is not the only factor. Other factors such as technical analysis and technical indicators must be taken into account.
Is it necessary to invest a large amount in trading?
No, it is not necessary to invest a large amount in trading. in fact, trader can start with a small amount and increase it over time as your skills are improved.
How can I determine the ideal time to enter or exit a transaction?
Determining the ideal time to enter or exit a transaction depends on your strategy and analysis of the market.in addition, Technical indicators and candle patterns can be used to guide your decisions.
Should I be an expert in technical analysis to become a successful trader?
No, you don’t have to be an expert in technical analysis to become a successful trader. besides, Technical analysis principles can be learned and beginner technical indicators can be used to make appropriate trading decisions.