Risk comes from not knowing what you’re doing

  • By Joeseph Sheli|28 August 2019

Trading is an economical concept of buying and selling, or exchanging one asset against the other. Thousands of years ago, you probably could see people trading with each other items from clothes to weapons. Trading was basically exchanging valuable things between traders.

In the modern financial era, everything became much simpler, we don’t need to go to the free market anymore, and look for someone that need to buy a chair, and have exactly the coat that we want, what are the odds, right? We can just buy and sell things, for money.

So if theoretically, we find someone that is selling a chair, for 50$, and someone that is willing to buy that same chair for 60$, we have a very good chance of making money here, we will buy that chair for 50$ and sell it for 60$, we made 20%, 10$.

That is a very easy way to explain trading, but in the financial markets of course, we are not buying and selling chairs, we are buying and selling parts of companies, shares. We won’t really find someone who is willing to buy our shares for a higher price than the market’s price, so we will need to have the abilities to analyze the company, before we buy.

We are looking to buy assets that according to our trading strategy considered to be cheap, “in a sale”, and sell them when they go up in value, sounds very easy, right? Before you call your local broker and ask for a trading account, please make sure that you check
5 tips before choosing the right broker.