What is trading? How to make money on trading?
By Yuriy Bishko Updated November 15, 2022
Apparently, each of you has come across such a term as trading. You can often hear this term in business topics or movies. And for sure, each of you was interested and asked questions:
- What does trading mean?
- What is trading and how does it work?
- How do I make money trading crypto, stocks, etc?
- Can trading make you rich?
- Can trading make you a millionaire?
In this article, we will answer all these questions. You will learn what trading is and how to really make money on trading.
What is trading and who are the traders?
Trading is earnings from speculation, the difference in value between buying and selling various assets, it can be Bitcoin, altcoins, stocks, or just currency. In simple words, trading is an exchange between users, in the process of which buyers try to exchange (sell) their assets at a higher price.
Trading originates from real life, and people often do not realize that everyone is a participant in trading, for example, you bought apples for $1 (wholesale price) and sold them on the market for $1.5, as a result of this exchange you earned $0.5, traders work on a similar principle. Today, the place for trading is exchanges and various online platforms, where the actual users (traders) exchange assets with each other.
Previously, trading was quite inaccessible and limited. But now, almost everyone has the opportunity to download the exchange to their phone, become a trader and earn on rising and falling prices.
How to make money on trading?
Trading is one of the ways to gain full financial independence. In order to present how to make money on trading, it is best to show real cases.
The chart below shows an important key level - $41,774. The price has been testing this level for a long time. This is a signal to breakout and growth.
As a result, after the breakout , the price increased by 6.5%. The average balance of a novice trader is about $1,000.
$1000 + 6,5% = $1065. That is, if you bought an asset for $41,774 and sold that asset after growth, you would make $65 profit.
Also, let's look at this in a simpler example.
You bought several new, popular phones at the very beginning of sales in anticipation that the price will rise and you will be able to retrain and earn on it. Priced at $1,000. For several months, the price of these phones has remained the same. In the chart, it would look like the following.
But over time, the popularity of these phones began to grow and those wishing to purchase these phones as well. As a result, supply fell sharply and demand rose sharply. Sellers began to raise prices, and buyers were willing to buy at higher and higher prices. In just a few weeks, the price of phones reached $1,500.
In the chart, it would look like the following.
As a result, you sold phones and earned $500 (+50%) on each handset sold. All markets work on the same principle. The only difference is that the price is displayed in the form of charts.
If you have long been looking for the job of your dreams, seeking to be independent, doing your favorite thing and traveling around the world, then trading may be exactly what you have been looking for. In this area, you decide when and how much to work. And to make money you need a laptop and internet access.