Guide

Trading is the buying and selling of financial instruments. A trade creates exposure to a price, and the result depends on what happens after entry.

Retail traders, institutions, brokers, exchanges, market makers, funds, and other participants interact through orders and transactions.

Prices emerge through interaction between buying and selling interest. Bid, ask, spread, depth, and available liquidity influence that process.

A trading plan describes the intended market, direction, entry, invalidation, target, position size, and conditions that change the thesis.

Spot trading involves buying or selling the underlying instrument rather than a derivative contract based on it.

Derivatives can provide exposure to an underlying market without directly holding the asset. Margin and leverage change the capital required for that exposure.

Forex markets quote one currency against another. Position value, spread, and price movement are interpreted through the currency pair.

Cryptocurrency markets operate across multiple venues and can differ substantially in liquidity, volatility, market structure, and available data.

Stocks represent ownership interests in companies. Trading conditions depend on the instrument, exchange, session, liquidity, and corporate events.

Positions are generally opened and closed within the same session, making execution, short-term volatility, and intraday risk important.

Swing trading generally holds positions across multiple sessions to capture larger price movements than purely intraday trades.

Position trading generally uses longer holding periods and broader market structure, trend, or fundamental analysis.

Arbitrage strategies attempt to capture price differences between related markets or venues, after considering fees, latency, and execution.

Algorithmic systems use explicit rules or models to analyze markets, produce signals, manage orders, or automate parts of a trading process.

Options are contracts with defined rights and obligations. Strike, premium, expiration, volatility, and time affect their behavior.

Position size connects account risk to the distance between entry and invalidation. The same risk limit can produce very different sizes.

Risk / reward compares the defined downside distance with the defined target distance. It describes a setup rather than predicting its outcome.

Leverage increases market exposure relative to available capital. That changes both capital efficiency and the consequences of adverse movement.

PnL measures the financial result of a trade from entry, exit, direction, position size, and applicable fees.

Volatility describes the magnitude of price movement. Greater volatility can increase the size of ordinary adverse movement.

Lower liquidity can produce wider spreads, greater slippage, and more execution uncertainty, especially for larger orders.

Emotional reactions can change entries, exits, position size, and willingness to follow a previously defined plan.

Entering because a move has already happened can alter the original risk structure of a setup.

Traders may prefer information that supports an existing view. Explicit invalidation criteria can make the analysis less one-sided.

Increasing risk to recover a previous loss changes the decision process and can compound an already negative outcome.

Recording what was planned, what happened, and what changed provides material for reviewing decisions instead of only reviewing outcomes.

Price describes transaction levels while volume describes trading activity. Their meaning depends on the instrument and market structure.

Traders often use recurring areas of buying or selling interest as reference levels. These levels do not guarantee reversals.

Market structure can be described through sequences of highs and lows, ranges, breakouts, and changes in directional behavior.

The same instrument can behave very differently across timeframes. The chosen timeframe should match how the position is being planned and managed.