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Financial trading is the same as other forms of trading. It involves buying and selling assets for making a profit. If you want to know what is it, what is traded in financial trading, who can trade, and other queries, this guide will walk you through all your frequently asked queries.

financial trading

What Is Financial Trading?


Financial trading is the act of purchasing and selling financial assets. It can be done in 2 ways:


  • Exchange
  • Over-the-Counter (OTC)


An exchange is a marketplace, which is highly organized and specialized to offer traders specific types of tradable instruments. An example will make it easier for you to understand. NYSE or New York Stock Exchange is a leading American stock exchange. It enables you to buy stocks of various companies in the United States.


Now, suppose you are trading stocks over-the-counter (OTC). When you buy stocks on OTC platforms, you essentially do it with another party. One such leading OTC trading broker is IG and you can buy a CFD contract through that platform.


What are Traded in Financial Trading?


There are various financial instruments that can be traded. Some of them are:


  • Shares
  • Forex
  • Bonds
  • Derivatives including futures, options, and CFDs


No matter what you trade, the main goal of all financial trade is to make a profit. So, all the traders want to buy stocks or other financial instruments at a low price and sell at a higher price. You’ll make a loss if you buy at a certain price and the market-determined price falls below that and you have to sell it.


However, in many derivative trading, you can first short or sell a contract of a financial asset with the hope that the price of the derivative (say, future contract) will fall. If the price of the contract falls and you buy it at a price lower than the short price within the contract period, you’ll make a profit in that case.


Who can Trade Financial Instruments?


Any trader can trade financial instruments, say stocks, bonds, financial derivatives, and others. Now, the question comes, who is a trader? A trader is a person who purchases or sells financial instruments with the hope that he/she will make a profit out of the trade.


While some traders stick to trading only a particular asset class, say stocks, many others create a diverse portfolio by including multiple assets such as gold, fiat currencies (US Dollar, Euros, etc.), cryptocurrencies (Bitcoin, Ethereum, etc.), and others.


There are some traders who carry out lots of research on the fundamental aspects of a company or the market before trading stocks. Many others put faith in reading charts and patterns so that they can trade on the basis of support and resistance.


One factor that is common in all of these financial trades is that it comes with risk. The intensity of risk may vary. If the risk is high, the profit/loss potential is also very high. There are some traders who average out the risk factor by investing regularly without considering whether the market is increasing or decreasing.


The method is called Dollar Cost Averaging. You can invest a small amount of your money on a daily, weekly, or monthly basis. If you continue this investment practice for a long period of time (generally, above 1-year), your risk will be brought down significantly and you’ll receive a decent return on your investment. So, it is very important to know your risk-bearing potential and choose a strategy of trading as per that aspect.


Which Financial Markets can you Trade?


You can trade in any market of your choice. It can be stocks of publicly traded companies, indices, forex, cryptocurrencies, and many more. You can also trade in financial derivatives including futures, options, and others. If you choose an OTC platform such as IG, you can get access to more than 16,000 markets to trade. It includes over 12,000 stocks, 30 indices, and 90 currency pairs.


Financial Trading vs. Financial Investing


  • Exposure

  • Trading

You can make a small deposit and gain exposure to the full value of your position.


  • Investing

You can put the investment’s full value.


  • Speculation

  • Trading

You can make speculation on a short-to-medium term basis.


  • Investing

You can make speculation on a short, medium, and long-term basis. 


  • Trading Position

  • Trading

A trader should take a position when the value of the financial asset value either rises or falls. Both the short and long facilities are available so that you can make a profit when the price rises or falls.


  • Investing

A trader should take a position when the value of the financial asset rises.


  • Medium


  • Trading

You can either trade through exchanges or over the counter such as CFDs.


  • Investing

You can make investments through ETFs, options, futures, and stocks through exchanges. In the case of bullion, you’ll need a specialist.


How To Get Started With Financial Trading?


  • Trade through Exchange

The steps involved in starting your financial trade through an exchange are given below:


Step #1: Choose an instrument to trade, say stocks, forex, or cryptos.

Step #2: Open an account in a reliable exchange. You can also open a CFD account too.

Step #3: Verify account or identity details.

Step #4: Monitor a chosen stock or fiat currency or cryptocurrency through a trading terminal.

Step #5: Add funds to your account through bank transfer or PayPal, or debit/credit card.

Step #6: Practice financial trading with the help of a demo account. 


  • Trade through IG

The steps involved in starting your financial trade through IG are given below:


Step #1: Open a live account with IG.

Step #2: Browse more than 16,000 markets and select the ones you are willing to make trades with.

Step #3: Use a wide array of tools and resources for finding the first trading opportunity. You should choose a financial trading strategy on the basis of your appetite for risks. Risk management strategy must be employed correctly.

Step #4: You should monitor your first trade/investment through the platform by accessing it via mobile, computer, app, and other devices (PC, Android, Apple iPad, and more).


Choose Cryptocurrency Copy-Trading Bots to Increase Crypto ROI


Cryptocurrency Trading Robots (such as NapBots.com) automatically scan the market in real-time and trades for you. They run 24×7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.


Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.


NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.


The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.


You may also check “Napbots Review – Simple Way To Increase Your Crypto Returns” before taking the plunge.


What’s so special about NapBots?


NapBots crypto trading softwareis special because it comes with:

  1. A unique trading algorithm that processes market data for you
  2. A unique crypto trading bot library so that you can create your own mix of trading strategies
  3. Autopilot mode that enables you to automate trading 24×7
  4. An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money


How does NapBots help you to Make Money?


With NapBots, you can enjoy financial independence by trading cryptocurrencies on autopilot mode and earn money automatically. To make it work on your behalf, you have to do the following:


Step #1: Connect to one of the available trust exchanges.

Step #2: Select from the unique list of performing Bots of NapBots

Step #3: Choose a plan that suits your investment style


Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!


Why Choose NapBots?


  • NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.


  • The setup and installation process are easy. So, non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.


  • The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.


Our pricing is simple and there are no setup fees. 7 days Free Trial is also available!


Are You Ready To Start Automating Your Passive Income Now?


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