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Forex
 

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Trading

There are three categories of participants on the market:

(1) Traders who are members of the stock exchange and trade for their own or someone else's account.

(2) Hedgers, whose main goal is to protect themselves from price changes, and to minimize risk.

(3) Speculators whose motive is make profit on the price fluctuations by buying and selling.

The presence of hedgers and speculators is very important for the market because they increase liquidity. Liquidity is very important for all participants in the market because it allows them to buy or sell at any moment.

In order to make profit traders have to analyse market movements before they invest in some financial instrument. They also have to do analysis before they close position, because they can close position too early and lose opportunity to make bigger profit.


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