Trading strategy

Basic Trading Knowledge

1. How to Trade?

The main goal of trading is to earn profit by buying and selling assets such as money, stocks, commodities, and cryptocurrencies. When traders buy an asset, they expect its price to rise so they can sell it for a higher value.

When traders sell an asset, they expect the price to drop so they can buy it back at a lower value. In this case, traders essentially sell something they do not yet own, aiming to repurchase it at a cheaper price.

2. How to Be Successful at Trading?

To predict future market movements, traders use various strategies. One method is monitoring news and economic events. Experienced traders also rely on technical indicators to identify trends.

However, even professional traders experience losses. Fear, uncertainty, lack of patience, and overconfidence can negatively impact decisions. Practicing strong risk management and keeping emotions under control are essential habits for long-term success.

3. What Are Bulls?

Traders are often described as bulls or bears based on their market behavior.

Bulls buy assets expecting the price to increase. Their goal is to buy low and sell high. When demand increases, prices rise, creating what is known as a “bullish” trend—similar to how a bull attacks by pushing upward with its horns.

4. What Are Bears?

Bears sell assets with the expectation of buying them back later at a lower price. They profit from the difference between a high selling price and a lower repurchase price.

When bears dominate, asset prices fall, creating a “bearish” trend—based on the idea of a bear striking downward with its paw. The constant battle between bulls and bears causes price movement in the market.

5. How to Trade in an Uptrend?

An uptrend occurs when prices continuously move upward. If the chart rises, the asset’s value is increasing. Traders typically buy during an uptrend to sell later at a higher price.

6. How to Trade in a Downtrend?

A downtrend occurs when prices consistently fall. If the chart moves downward, the asset’s value is decreasing. Traders often sell during a downtrend and buy back later at a lower price.