Welcome to the world of investing and trading! That’s awesome you are looking to take control of your money and build financial freedom for yourself.
Before you start trading, you need to learn the basics of trading. This includes understanding the different types of assets, the markets they are traded in, and the different types of trading strategies. There are many online resources available that can teach you the basics of trading, including online courses, eBooks, and videos. It is essential to have a solid understanding of the markets and trading strategies before you start trading with real money.
What is Stock Trading?
Stock trading refers to the buying and selling of shares or stocks of publicly-traded companies. Investors engage in stock trading with the expectation of making a profit through capital appreciation or dividend income.
What is Forex Trading?
Forex trading is the exchange of one currency for another. The forex market is the biggest and most liquid in the world – it’s decentralised and one of the few true 24/7 markets.
Forex is traded in pairs, which consist of two currencies that are traded against each other. There are hundreds of different combinations to choose from, but some of the most popular include the Euro against the US dollar (known as the EUR/USD), the US dollar against the Japanese yen (USD/JPY) and the British pound against the US dollar (GBP/USD).
What is Index Trading?
Index trading is speculating on the price movements of a collection of underlying assets that are grouped together into one entity. When you trade on the index, you’re trading on all its constituents at the same time.
Types of indices you can trade include :
- Equity indices
- Sector indices
- Bond indices
- Commodity indices
- Real estate investment trust (REIT) indices
What is Commodities Trading?
Commodities trading is speculating on the market price of natural resources such as gold, sugar cane and Brent crude oil. There are ‘hard’ and ‘soft’ commodities. Hard commodities are mined substances like precious metals, diamonds, oils, gases, and the like. Soft commodities are plant and animal resources like grains, sugar cane, coffee beans and cattle and other livestock.
Some commodities, like gold for instance, have a reputation for being a safe haven in troubled times and are often used as hedges against things such as inflation and macroeconomic volatility.
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