The term trading is currently being discussed by many people. The reason is, recently more and more young people have sprung up who are rich because they play in the trading sector. Then, what is trading?
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That's what makes many people start to glance at this one instrument. However, before you decide to spend money on trading, it's a good idea to know in advance what trading is so that your money doesn't run out because this one instrument is known to have big risks.
What is trading?
Trading is the process of long-term financial transactions or the term is trading activity in the form of currencies.
In the financial market, trading is an important instrument because it can generate large amounts of money. However, to be able to reap maximum profits, you must have the ability to read market movements well.
In general, trading is a basic economic concept that involves buying and selling of goods and services. That is, the compensation will be paid by the buyer to the seller or the exchange of goods or services between parties.
That way, trading can be concluded as an exchange of goods for money. In the financial markets themselves, trading refers to the buying and selling of securities.
As with any other instrument, trading aims to make money by selling an asset at a lower price than it was paid for.
In order to make a profit in trading, traders must observe prices from time to time and look for patterns to predict future prices.
Types of trading
To understand more about trading, there are a number of different types of trading in the financial markets. Here are some of them:
1. Stock trading
Stock trading is ownership shares in a public company that are sold to the public through securities brokers. Investors can benefit when the company increases its earnings.
In simple terms, stock trading is the activity of buying and selling shares for a certain period of time but the majority are short.
In order to make a profit in stock trading, you have to make the right decisions. This means knowing when to buy and sell by knowing the movement of price fluctuations.
2. Forex trading
Forex trading is a type of trading that sells a country's currency against another country's currency involving major currency markets in the world that occurs 24 hours a day continuously.
It should be noted that the parties involved in the forex market are not only several people, but several parties who are institutional or non-institutional.
3. Commodity trading
The commodity market is where a company offsets their future risk when buying or selling natural resources.
For example, if during this time valuable objects such as oil or precious metals could only be traded physically, now you can buy and sell them online and you can benefit from trading these commodities.
To be able to get the maximum profit, you can open a buy position when the price is low and sell it again when the price rises.
The difference between trading and investing
Some people still don't know the definition of investing and trading, both of which can increase your wealth. But both have different definitions of understanding. The following explains the meaning of both.
Investment is defined as the act of pouring funds by investors to accumulate assets and earn profits in the future.
While trading is someone who invests his funds to make a profit by taking advantage of price changes in a short period of time.
In order to better understand investing and trading, here are the basic differences that you must know:
Investation
1 Principle
Buy and Hold, what is meant here is that investors pour their funds to buy shares of companies that are healthy and have good fundamentals. So investors don't really care about price changes.
2 Strategy
Buy shares of companies that have good fundamentals.
3 Timeframe
Long-term
Trading
1 Principle
Buy and Sell, where investors or often referred to as traders pour their money to buy company shares when the share price has the potential to rise in the near future. So focused on price changes.
2 Strategy
Buy shares of companies that have the potential to rise in the near future.
3 Timeframe
Short-term
Grow wealth by doing business
Trading can indeed produce an abundance of rupiah coffers but on the condition that you have the ability to read market movements well. The reason is, trading is also known as high return high risk, namely the profit and risk are equally large.
Knowing this, many traders take advantage of their profits by going into the business sector to increase their wealth.
Even so, you still have to be careful in choosing a promising business sector that can provide big profits, one of which is by doing business in the education sector.
According to the education SMEs, they admit that the education business is the right choice for business because education will never die, one of which is experienced by Pak Yahto Dwi Husodo as the owner of PT Ambali.
“When many business people are experiencing obstacles during the pandemic, my business is actually growing because schools still need products or services to support learning. My turnover even experienced a drastic increase to more than Rp 5 billion,” said Pak Yahto.
Furthermore, Pak Yahto admitted that he only focused on finding sellers and improving the quality of the goods and services being sold. Meanwhile, to develop the scale of his business, he admitted to relying on Pintek regarding funding.
“Pintek really helped me with the financing problems I was having. The loan limit is large, the application process is easy and the disbursement is very fast. Thank you Pintek for realizing my dream as a businessman,” said the man who is familiarly called Dodo.
So through the trading profits you make, you can open an education business and develop a business by cooperating with Pintek to get additional business capital.
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