Trading is the ability to buy and sell highly liquid assets to generate economic profits. In other words, it involves the buying and selling of assets available in the electronic financial market, such as stocks and cryptocurrencies, among others. Trading is based on analysis and the application of strategies to understand how the market works, allowing you to make informed decisions about when to buy and when to sell.

Trading is a speculative activity within the stock market, as it relates to operations carried out on the exchange. It is conducted in the financial, electronic, and regulated market to achieve economic benefits.

What is a Trader?

A trader is the person who executes these buy and sell transactions. For example, they buy an asset when its value is low to sell it later at a higher price, or they sell an asset at a high price to buy it back at a lower price.

A trader must recognize that this activity involves risks. If a trade doesn't go as planned, they should be prepared to lose an amount of money that won’t significantly impact their finances. Additionally, a trader must have patience since this activity yields better results in the long term.

A trader requires both technical knowledge and emotional control at the same time.

In the book "Trading for a Living", Dr. Elder writes, "Your emotions have an immediate impact on your account balance. You can have a brilliant trading system, but if you're scared, too arrogant, or angry, your account may suffer the consequences."

Trading for Beginners:

If you're new to the world of trading, keep in mind that when conducting a financial analysis, you should consider, for instance, the tendency of certain assets to rise over the years, or that they may decrease in the long term.

There are also long periods affected by inflation and seasonality, which essentially show that there will be specific times of the year when prices rise or fall.

For example, a retail company may see a significant increase in sales during the change of winter/summer seasons, causing the value of its stocks to rise.

There is also the random variation, which includes effects that are hard to predict, such as natural disasters or wars, which can drive prices up unexpectedly.

How to Start Trading?

Now that we’ve explained what trading is and what you need to become a trader, let’s look at how to start trading in the simplest way:

• Stay informed about world events and companies by exchanging opinions and knowledge. You can do this by joining trading chat rooms, blogs, and forums to analyze the discussions.
• Attend investment-related talks and conferences.
• You will need a personal computer with a stable internet connection, though you can also trade using an app on your phone.
• Next, find a specialized broker and open an account. For example, Hapi is a broker-dealer based and regulated in the United States that allows Latin American countries to use it. Opening an account takes just a few minutes.
• Ensure the trading platform you use has real-time charts and quotes. This will not only give you direct access to market assets but also help you assess the risk of the trades.
• Obviously, you need money to invest, ensuring that it's not essential for your daily life and won’t be needed in the short term.

How to Trade?

Once you've opened your account with a specialized broker and feel ready to trade, you need to monitor market trends, observe and analyze to find the ideal moment to buy and sell.

Plan and organize your strategies well to make sound decisions.

Remember, when trading, never risk more money than you're willing to lose. Planning, organizing, and analyzing thoroughly before trading is essential, as is having proper knowledge on the subject.

How Does Trading Work?

Trading has its ups and downs; it’s a risky activity where you can experience periods of high gains as well as potential losses.

In summary, trading works by buying and selling products such as stocks and cryptocurrencies, which, in the short, medium, or long term, generate good returns.

Types of Trading or Traders

Below is a summary of the types of trading, which depend on the time spent on operations:

1. Scalping Trading: the operation lasts a maximum of 25 minutes, meaning scalping traders operate within minutes.
2. Day Trading: the operation is opened and closed within the same day, meaning day traders buy and sell within the same day.
3. Swing Trading: the operation lasts between 10 days to 3 weeks, meaning swing traders operate over many days.
4. Trend Trading: the operation can last months or even years, meaning trend traders operate without a set time limit.

Although trading carries risks, the number of people venturing into this form of investment continues to grow. As entrepreneur and economist Dusko Kelez mentioned in an interview with Forbes: "This is a market with a lot of potential to grow. It will attract new players and investments."

Hapi is the first investment app in Latin America where you can invest in U.S. stocks, ETFs, and cryptocurrencies in one portfolio. You can deposit funds directly through the app and use them immediately. And remember, with just US$1, you can invest in fractions of your favorite stocks or cryptocurrencies.