Hello and welcome to Module Two of the course. In this course, we will be looking at what is trading. This is a free module and it will can be downloaded on my website@www.export.com. Looking at a broad definition of trading, and trading can be considered the skill of consistently taking small yet predefined risks when the odds of success are in your favor. distinguishing between the broader definition of investing versus trading, investing is taking a longer term usually fundamental bond old view and stocks, commodities, bonds and aiming to profit off the gradual increase of value for dividends and growth. Investors usually look for 10 to 20% return per annum, although greater return is possible This would be a more realistic range.

Looking at trading, trading is basically speculating on the shorter term price movements of stocks, currency pairs or the relative instruments. Your buy or sell decisions are oftentimes based on technical analysis or high impact music things that might have material impact on the near term price variation due to investor sentiment. Bottom traders will look forward 10s of around 20 to 40% per annum, whilst futon traders might look for as much as 10% per month looking at some common trading instruments, firstly looking at your common stocks, or vote trading is usually executed via derivative contracts. Depending on the time frame, and your intent, buying and selling stocks can be considered straining Derivative contracts management derives its value from the performance of the underlying entity, whether that be an index or commodity, resources or currency. A common instruments include your futures, options and see these, you can add the broader definition of those instruments.

Futures can be defined as contracts that is used to replicate the performance of an underlying stock market index or security based on the speculative valuation of a future date. Basically, a future contract is an agreement between a buyer and a seller of the contract that some assets such as a commodity currency or index will be bought or sold for a specific price on a specific day in the future. This type is known as the expiration date that can also be used for hedging against an existing equity position or speculating on future price movements, holders of future contracts do not receive or pay dividends Options, Options are contracts that give the owner the right but not obligation to buy in the case of a call option or sell in the case of a put option, and the price at which the sale takes place will be known as the strike price and it is a specified time the bought into into the option and the option contract also specifies maturity date also get something like called binary options with the owner of the contract is faced with an all or nothing profit profile.

Basically what this means is you are speculating on the future price of a specific asset. If you are under the impression that the price of this asset will go up he will enter into a call option. If you are speculating the price will go down to enter into a put option. The price The starting price would be called the strike price and in any date or time period will be called the maturity date or maturity top CFDs imbedded terms, the difference between where a trade is entered and exited is called the contract for difference. And as an alternative to safety is a tradable instrument that mirrors the movements of the underlying asset. CFDs allow holders to be either long or short.

In other words, being able to short sell CFDs allows for profits or loss to be realized when the underlying asset moves in relation to the profit position taken, but the actual underlying asset is never owned. However, it is to be noted that for short positions, the contract holder will responsible to pay the dividend whereas it would be paid out if you are holding a long position CFDs also provide traders With the opportunity of greater leverage due to low margin requirements, and although I was spritz will be charged for each transaction, and you are still in a position to gain exposure to only having to put down margin. Don't worry we will explain more about leverage and margins in another module. Looking at some of the common markets, and forex trading, called also called foreign exchange trading or if x is currencies, trading currencies in relation to each other in what's known as currency pair trading.

For instance, you are trading the value of the euro versus the US dollar. Some of the pros include good liquidity, low spreads and also a 24 hour market environment and some comes to high volatility. Another common market would be your index trading. Each country usually have a stock exchange that has listed indexes that track a number of the underlying stocks or that particular exchange. Some common examples would include your decks for Germany or your dow and us footsie in London or the Aussie for South Africa. Pros include again, liquidity and also low spreads, your cons would be very limited market hours.

Some of the other markets would be your shares or stocks. These are the publicly listed shares of companies that mostly be traded on the exchanges that are listed on for instance, looking at something like Facebook, which would be listed on the NASDAQ exchange on the shakeout, Facebook or beat pros. And well, you are following the fundamentals of the The company some of the concentrated and very limited market hours again as well as some transaction fees. Also look at 20 commodities, commodities are considered market address primary economic sectors, for instance soft commodities are your agricultural products wheat, coffee, cow fruit and also sugar, whereas hot commodities are usually those that are might for instance your oil, natural gas or precious metals such as cold so that, etc. Pros would include cyclical behavior, meaning usually have a big bull market and either say oil or maybe gold and then also vice versa.

Cons would include very high volatility again, then something newer to the scene would be cryptocurrency cryptocurrencies are a digital asset designed to work as a medium of exchange that uses cryptography to insecure control and verify the creation and transfer of assets. cryptocurrencies, are a type of digital currency with the major difference opposed to fiat currency being that it is decentralized and unregulated example would include Bitcoin, some pros to include inexpensive trading, especially if you look at some of the cryptocurrency exchanges again, be aware that they are unregulated. They can also be traded 24 seven cons, as mentioned are regulated and extremely volatile. That is it for module two. If you ever again if you have any questions, feel free to mail them to me at info at exporter metal comm and I will do my best to answer them. Thank you very much, Georgia receptacles