So, a trader is a financial / stock market trader who seeks to make a profit. At the same time, the trader directly works on the market: analyzes the situation, and concludes trade deals.
A private investor is an individual who invests (invests) his savings and savings to make a profit. An investor can be passive (work through a broker, or just buy currencies, metals, antiques, or securities and wait for the best times to sell) or active (analyze markets and make deals).
That is an active private investor who is ready to trade in the stock market as a job, analyze and conclude transactions, is a trader. If you are ready to connect to platforms and start working with your savings, you are a beginner trader. And as a novice trader, you should know the basic things about trading and strategies – in order not to make mistakes yourself and not fall victim to scams.
- Bulls are traders who expect a rise in prices, enter into a contract to buy assets, and wait for a new rise in order to sell more expensive and receive the difference as income. You don’t need to be a mathematician to understand that bulls stimulate asset prices to rise (there are purchases – higher demand – higher prices).
- Bears, as they say, play on the decline, enter into buy contracts, and wait for the decline in asset prices in order to buy as cheaply as possible. Obviously, bearish actions are pulling prices down.
- However, this is not the only classification that traders’ strategies suggest. First of all, bulls and bears stand out when trading on margin (with “leverage”). At the same time, at different times the same trader can be both a bull and a bear.
- Another important division in trading in the stock market is the types of transactions.
- Short deals – an asset borrowed from a broker is sold for the purpose of further buying at a lower price. The debt is returned, and the difference in price settles on the trader’s accounts.
- Long trades – an asset is bought in order to sell it later at a higher price. The difference in price is the trader’s income.
- By the way, the names of transactions have nothing to do with their duration or the period of ownership of the asset – they can last for months or be made several times a minute.
- There is one more important division of strategies.
- Trading with a trend – a trader opens trades in the direction of price movement. As a rule, this is ideal for a beginner as it is a simple strategy with minimal risks and the possibility of making large profits.
- News trading is an option for sophisticated traders. In this case, fundamental analysis is carried out first, and then trades for multidirectional trends are opened. This is a rather nervous strategy and requires exceptional analytical skills.
- Again, this is not an exhaustive list of strategies. Experienced investors never stick to any one style, they change and combine strategies depending on forecasts, market conditions, and the specific type of asset.
But it is not enough to know strategies and consider yourself to be bulls or bears. Successful trading requires knowledge of legislation and trading rules, an excellent theoretical base, an understanding of the functioning of the exchange and the stock market, planning and analytic skills, the ability to notice seemingly insignificant details, and, of course, free capital.
Recall that it is worth starting at a low speed. And high-class specialists to help you – do not avoid the services of professional brokers and financial advisors.