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Who is a trader and what is trading?

With the development of capitalist relations, the need arose for “conventional units” that allowed to optimize the process of buying and selling enterprises or their products. Speculation (not swearing) has allowed a simple trading process to take the form of a complex “play” for the rise / fall. Of course, not for the sake of excitement, but to get more profit. 

What is trading and what you need to know about it?

What is a trader and what does he do - this is the person who "playing on the stock exchange" makes a bet and gets the result. Often, his whole task is to achieve the difference in prices of conventional units and make a profit in this way. They can speculate or "play" absolutely everyone and almost everywhere. An exception will be such platforms as the labor exchange and similar platforms dedicated to employment.

Now such platforms as forex and binary options are the most popular in trading. Although they do not trade stocks, but, for example, currencies or jewelry, the principles of trading have remained unchanged. 

Who is a trader and what does he do?

What does a trader do? Conducts transactions of purchase and sale of such units as:

  • currencies;
  • precious metals;
  • shares of enterprises.

He earns on the difference in prices. "Who is a trader?" the reader asks. The answer is laconic — a player on the stock exchange with his own capital. For a more detailed acquaintance, you must first consider the types (types) of traders. There are only six of them:

  • Bulls
  • Bears
  • Sheeps
  • Pigs 
  • Chickens
  • Whales

Let's get acquainted with them in more detail. 

  • Bulls — buy presumably growing assets to sell them later on a speculative basis. These traders benefit from selling stocks at higher prices. 
  • Bears are the opposite of bulls. They specialize in the sale of assets in order to buy them back at a more attractive price. The difference between the amounts is the bear's profit. They practice the so-called Short selling.
  • Sheep are gamblers whose trade decisions are often spontaneous and driven only by emotion. Often they are used and "plucked". They are often credited with an analogue of the “herd instinct”. If “noise” appears, then the bulk of the sheep tends to invest or withdraw money. Sometimes this is how financial crises began.
  • Pigs are traders whose determined manner predisposes to take risky trades. They rarely care about the rules, the only thing that matters is profit.
  • Chickens are the most indecisive players on the stock exchange. Risk is often perceived as an unequivocal defeat. Because of this, profitable deals are often missed. 
  • Whales are weighted, cold-blooded, zealous. They treat trading like a business. They differ in a systematic approach. Statistically ranked among the most successful players on the market.

Difference between trader and broker

The stock exchange in the mass consciousness looks like an eternally noisy building on Wall Street. There phones always ring, “white collars” are constantly shouting and swearing. In fact, an exchange is a place (platform) where transactions are made. Now they are often presented in the Internet format. 

Trading what is it

Who are traders and brokers?

In simple words: actors in the market. That the first, that the second are presented on the stock exchange. Both speculate in “commodity” (meaning both stocks and others), but that's where the similarities end. While a trader is a person investing his own capital, a broker is just an intermediary between the client and the market. 

The difference between a trader and a broker lies in the role in the market. The first is not constrained in his decisions and is responsible only to himself. The broker is an intermediary, he performs the tasks set by the trader. His role is executive. These days, busy, aggressive, white-collar people have been replaced by programs. Merchant bots now independently find open offers and conclude short-term deals. This innovation has significantly accelerated the market and has facilitated the opening and closing of thousands of trades around the globe.

Who are traders and how to become one

If a passion woke up in you, an eternal thirst for personal enrichment, or it simply became interesting to try yourself in a new profession, it is definitely worth considering the possibility of learning to trade. There are many training platforms online. Someone offers mentoring by eminent traders, someone already has materials for self-study ready. The best option for a beginner would be courses prepared by specialists. Which includes both lecture and practical tasks. 

After completing the course, the student will already have both an independent experience of playing on the stock exchange and a reputation as a reliable partner. 

You can become a full-fledged market entity that determines the real direction of development of companies, or the economy as a whole, by investing a minimum amount on specialized platforms. Forex trading has become much more accessible over the past 20 years. Increasingly, the search bar is being driven into “Trader, what is this and what does it mean?”. After completing the appropriate courses and getting an internship, you will be able to give an unambiguous answer to your request. At the same time, master one of the most profitable professions in the world. 

When it comes to career growth as a trader, it is important to understand that it is nothing like typical employee development systems. He cannot have hierarchical development as in companies. An independent player on the stock exchange is responsible to himself. He has no boss, he has no obligations to the employer. His height is measured exclusively in the means with which he is able to operate. Acquisition of securities, establishing oneself in the role of a significant figure in the market (or even a hegemon). The ability to influence economic (and therefore social) directions of development is precisely the answer to the question “what is a trader”. 

Separately, we should talk about forex trading. Although exchanges are more often associated with securities trading, the sale and purchase of currencies plays an important role. Forex trading originated between banks. The basis of trade and, of course, revenue is the exchange rate difference between currencies.

If you are planning to open or develop a platform dedicated to forex, our company can help you. We specialize in lead generation and generating warm, stable traffic with already warmed up clients. Our company uses methods of contextual advertising. We select leads based on interests and geo-location. 

And with the principles of the trading programs and basic trading methods, you will learn below.

What is a trader and what is his role?

Trader, who is this? Speaking in the “popular” language, he is a speculator. Although the Soviet terminology gave an unambiguously negative meaning of this term. We will look at it in detail and with an open mind. You should start with the elementary. Capitalism is speculation. Every entity in the market is interested in “Buy - cheaper; Selling is more expensive; ”. This leads to the answer to the question "Who is a trader on the exchange?" This is a person who makes money on the price difference. Such people specialize in a variety of financial platforms. Be it forex, binary options, stock markets, etc. A trader works on exchanges, let's consider them in more detail. 

Who are traders

What is a trader on financial platforms? This is a market entity. There are several types of trading platforms. Including such specific platforms as futures and commodities. Speculation on needs and even on contracts that have not yet been concluded is a natural form of the market. What is a trader and what does he do on such platforms? 

Let's consider its role with specific examples:

  • Commodity exchanges are a wholesale market for real goods. The role of traders on such platforms is the leading one — after all, they are the main clients (traders). Brokers, in turn, are looking for offers to which sellers agree to go. You may have seen in the films a man yelling into the telephone receiver “I have 200 tons of cotton”. It is on commodity exchanges that such a picture is possible. Although large players (states or international corporations) represent the bulk of the “players” on commodity exchanges, you can also find representatives of much smaller organizations there. The commodity market is especially influential in the modern world, where various resources are traded, such as oil or industrial metals. 
  • Futures — the market for future transactions. Traders in this case are market entities capable of concluding transactions in the future. A distinctive feature of such structures is the prospect of transactions. Brokers are looking for favorable conditions. What makes this exchange specific is the principle of concluding a deal without the presence of resources or money "in the hands" of traders. Such platforms are popular with large industrialists.
  • Stocks are the securities market. The famous Wall Street, with which the word "stock exchange" is associated in the mass, cultural consciousness. In this market, the main element of bargaining is the shares of enterprises. Playing on them is popular both among large corporations, wealthy investors, and people with a much more modest budget. In the modern world, there are frequent cases of investing in shares of promising enterprises from not the most wealthy traders. 

True, the "game" for securities sometimes leads to the appearance of the so-called "soap bubbles". Not backed by real resources or purposefully inflated by speculators. They are “inflated” with the aim of selling the already acquired assets at better prices. It was with the collapse of the shares of Radio Corporation of America (whose stock price unreasonably rose 100 times) that the “Great Depression” of 29-41 of the 20th century began.

  • Currency — the exchanges on which the “game” is taking place in the currency. In addition to speculation on the rate of a particular unit, there is also the practice of using “free money”. Let's consider it on an example: 

There is 1000 $ in the bank, it is night outside and not a single financial structure is working anymore. But on the other side of the planet, the working day is in full swing, and that's where the money is needed. After the conclusion of the transaction, the money is transferred to the bank (or to a specific user) on a “short position” and within a few hours is involved in financial transactions. At the end of the term, the notional amount is returned with a certain percentage on top. Surplus value is the trader's profit.

But such processes require a certain amount initially. Rarely do you need a couple hundred dollars on the other side of the earth. A trader on a currency exchange is the owner of large capital or a representative of a banking structure. His money is constantly in circulation and he is interested in the fastest possible transactions. 

Summing up the above — What does a trader mean for an exchange? This is the blood in the veins of the market. It is thanks to them that the veins of trade are filled with life. 

Also, traders can be divided into psychological types:

  • Intuitive — guided by his own experience, often does not listen to others. He acts quickly and sometimes makes irrational decisions.
  • The intellectual acts out of his own awareness. He tries to consider the deal in detail and make the right choice as a result. Often not alone works and collects information from several sources.
  • Instinctive — "jumps on the departing train." A person with this psychotype tends to act emotionally. He has enough timetable fluctuations to make a decision. 

Who is a trader: the basics of his work and how he conducts his business

What traders do to win the “stock market game”? The character and psychotype naturally affect the conduct of business, but personal qualities are not enough for success. Business tactics are required. It can be broken down into the following methods:

  • Scalping,
  • Day trading,
  • Medium-long-term trading.

The strategy of behavior is no less important than the habits and types of traders. So scalping provides for the conclusion of many transactions in the shortest possible interval. Requires speed of reaction and persistence from the trader. Trading is carried out mainly during the hottest hours of the market. 

Day trading, in turn, provides for longer-term transactions (the length of a day) Does not provide for their transfer overnight. Requires tracking economic statistics. Predisposes to fewer transactions per day. 

In turn, medium-long-term trading is the conclusion of long-term deals (weeks, months, or even years). It requires endurance from the trader, but has a huge advantage — time. 

During the analysis of tactics, the types of transactions became clear. But what does a trader do and why? This topic should be considered more broadly. We offer you to get acquainted with the main types of transactions and their definition. Namely, pay attention to long & short selling. Let's take a closer look:

  1. Long — buying bonds with a long perspective (counting on their further rise in price). Such actions are also called “Long Position”. 
  2. Short is the exact opposite of the point above. Means a purchase for a short period with the hope of further price reductions. The trader expects to borrow assets for a short time, sell them and, as soon as the decline occurs, buy. 

Thus, the price difference is the trader's profit. The advantage of this type of transactions is speed. The money is not frozen for a long period. Although the trader is at risk, even after losing, he can quickly take action and, by concluding new contracts, compensate for the costs. 

Meanwhile, longs are betting on the future. They are the safest deposits on the stock exchange. But such transactions are concluded mainly for large amounts, which is dangerous and simply unprofitable for a novice trader. 

Constant race for deals, eternal search for a buyer and crazy speed — that's what it means to be a trader. 

Result

Summarizing the points from above. The "game" on the stock exchange is transactions based on two principles, the difference between which is in the time frame. Trader, what is this? — a market entity whose capital is directly used in trading on certain platforms. Exchanges may differ in terms of product, but are not different in how they work. 

The difference between a broker and a trader is hierarchy. The first one fulfills the order of the second one. Often, traders trust brokers to represent their own interests. 

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