Trading financial markets can feel overwhelming at first. Prices moving, charts scrolling, terminology flying — it's a lot. But the fundamentals are straightforward once you understand the basics. This guide covers everything you need to get started.
Trading is the buying and selling of financial instruments — currencies, stocks, commodities, cryptocurrencies, or futures contracts — with the goal of making a profit from price movements.
Unlike investing (which is typically long-term), trading focuses on shorter-term price movements — anywhere from seconds to weeks.
The forex market is where currencies are traded against each other. EUR/USD, GBP/USD, USD/JPY — these are currency pairs. It's the largest financial market in the world, open 24 hours a day, 5 days a week.
Stock trading involves buying and selling shares of publicly listed companies. When you buy a stock, you own a small piece of that company.
Cryptocurrency markets trade digital assets like Bitcoin, Ethereum, and thousands of altcoins. Crypto markets are open 24/7 and are known for high volatility.
Futures are contracts to buy or sell an asset at a predetermined price at a future date. Common futures markets include stock indices (ES, NQ), commodities (crude oil, gold), and currencies.
Going long means buying — you profit when price goes up. Going short means selling — you profit when price goes down. Most markets allow both.
The bid is the price buyers will pay. The ask is the price sellers want. The difference between them is the spread — this is one of your trading costs.
Leverage lets you control a larger position than your account balance. At 10:1 leverage, $1,000 controls $10,000 worth of assets. This amplifies both gains and losses. Learn more about leverage →
In forex, a pip is the smallest standard price movement — usually 0.0001 for most pairs. Knowing your pip value is essential for calculating profit and loss.
Never risk money you can't afford to lose. Trading involves real risk of loss. The traders who survive long-term are those who manage risk first and profits second.
Ready to start calculating? Use our Position Size Calculator to learn how to size your trades correctly from day one.