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Beginner Trading Study Guide

This document serves as a beginner's guide to trading, explaining key concepts such as types of trading (day trading, swing trading, etc.), what can be traded (stocks, forex, cryptocurrencies, commodities), and basic trading terms. It emphasizes the importance of risk management and provides recommended resources for further learning. Additionally, it introduces the use of charts and indicators to aid trading decisions.

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59 views2 pages

Beginner Trading Study Guide

This document serves as a beginner's guide to trading, explaining key concepts such as types of trading (day trading, swing trading, etc.), what can be traded (stocks, forex, cryptocurrencies, commodities), and basic trading terms. It emphasizes the importance of risk management and provides recommended resources for further learning. Additionally, it introduces the use of charts and indicators to aid trading decisions.

Uploaded by

vibgyorseoul007
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Beginner's Study Guide to Trading

1. What is Trading?
Trading is the act of buying and selling financial instruments like stocks, currencies, or
cryptocurrencies to make a profit. Unlike long-term investing, trading usually involves
holding assets for a short time—ranging from seconds to weeks.

2. Types of Trading
• Day Trading – Buying and selling within the same day.

• Swing Trading – Holding trades for a few days to weeks.

• Scalping – Making small profits from very quick trades.

• Position Trading – Long-term trades based on trends.

3. What Can You Trade?


• Stocks – Shares of companies like Apple, Tesla, etc.

• Forex – Currency pairs like USD/EUR or GBP/JPY.

• Cryptocurrencies – Digital currencies like Bitcoin, Ethereum.

• Commodities – Physical goods like gold, oil, etc.

4. How Trading Works


You use a platform called a 'broker' to place trades. You can choose to buy (if you think
price will go up) or sell (if you think price will go down). The aim is to buy low and sell high
—or sell high and buy back low.

5. Basic Trading Terms


• Buy/Sell – Entering a trade expecting price to go up/down.

• Broker – The app or website you use to trade (like Zerodha, TradingView, etc.).

• Order – Instruction to buy or sell.

• Market Order – Buy/sell immediately at the current price.

• Limit Order – Buy/sell at a specific price you set.


• Stop-Loss – Automatically exit a trade to prevent large losses.

• Take-Profit – Automatically exit when a target profit is reached.

6. Charts and Indicators (Intro Only)


Traders use charts to track price movements over time. The most common type is the
candlestick chart. Indicators like Moving Averages and RSI help you decide when to buy or
sell.

7. Risk Management
Never risk all your money on one trade. Use small portions (1-2%) of your capital per trade.
Always use stop-losses and avoid trading emotionally.

8. Recommended Free Resources


• YouTube Channels: Rayner Teo, TradingLab, Warrior Trading

• Websites: Investopedia.com, BabyPips.com

• Apps to Practice: TradingView (demo), Investmate, Thinkorswim

9. Glossary
Stock: A share of ownership in a company.

Forex: Foreign exchange market where currencies are traded.

Crypto: Digital currencies like Bitcoin and Ethereum.

Broker: Platform or service used to place trades.

Leverage: Borrowed money to increase trade size.

Pip: Smallest price move in forex.

Volatility: How much the price moves.

Liquidity: How easily you can buy/sell without affecting the price.

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