Gone are the days of physical trading. A vast change in the mode of communication in all spheres has swept the world. The advent of Internet has made all the difference in the everyday life of an individual including the dynamics in trading environment.
The basic difference between an investor and a trader in the financial market is that an investor buys asset with a long-term perspective with a view to accrue benefit in net increase in value in the long run. However, the trader has a completely different objective. He eyes the market in order to cash in on short-term price movements and maximize trader profit.
There are several aspects of the profit and loss in trading that needs close study.
Strategies for trading profit
Traders who are experienced make profit because they are diligent and take it up as a whole time business. A casual trader attracted by profit stories often are led to trading without proper strategies and end up losing their money.
It is always advisable to use a well-written trading plan before embarking on actual trading by what is known as “backtesting” the plan applying trading ideas to historic data. A trading plan generally comprise of set rules covering trader’s entry, exit and money management criteria.
Proper use of technology is a definite means to make trading profitable. Trading is a risky business and, therefore, the trader should be very careful not to lose his/her money by wishful thinking. One must protect his capital by careful analysis of the market and evaluating the asset ‘s potential.
Profit & loss in currency trading
Currency trading is a challenging and profitable opportunity for well-educated investors. However, as the market is extremely volatile in nature, it is also a risky market. Trading in currency requires that traders must always remain alert to their asset positions. However, this is also a exciting opportunity for the skilled trader to make big profit in a short time using leverage and margin.
Trading in traditional fiat money is now gradually giving way to the virtual world of trading in crypto currency. There are several crypto currencies that are now available in the market, like Bitcoin, Ethereum etc.
Trader profit depends on the adaptability of the trader to market dynamics, knowledge of the market, skills, and experience. As in every game, in trading also there are losers and shakers. Therefore, continuous learning has no alternative.