Understanding the bitcoin market and what trading bitcoin is - Njoku Christian C.

 

How you better understand the concept of trading

The world of trading can seem fast-paced and hectic. However, contrary to how trading is sometimes portrayed in popular culture, it usually does not invoke instant wealth. Rather than the sporadic pushing of buttons, trading requires informed decision-making strategies.

Trading is a broad term and covers a multitude of financial markets. For example, the markets for stocks, foreign exchange, exchange-traded funds, options, and contracts for difference (CFD). Cryptocurrencies have added another element to traders’ portfolios, particularly with the advent of bitcoin trading.

The process of trading and those involved have also changed and developed over time. The concept of trading has deep historical roots dating back to ancient Mesopotamia with the exchange of grain futures. Trading of financial instruments emerged through the exchange of debt amongst moneylenders in the 1300s, and their purchase of government debt. Following on, they began to sell debt to the first investors.

Traditionally, those involved in the financial markets had considerable funds. However, the tides are changing in financial markets as cryptocurrencies present their opportunities. Both the modus operandi and the clientele of financial markets have evolved. The Internet and blockchain eras have respectively made trading more accessible to people all around the world. At the same time, they have opened up lower market entry levels in terms of capital requirements.

Nonetheless, the spirit of trading remains the same. Trading is loaded with probabilities and it remains a risk whether the desired outcome will be achieved.

The difference between trading and investing

Despite their differences, it's possible to be both a trader and an investor. Trading and investment have different aims and consequently, they follow unique strategies that set them apart. The primary difference between trading and investing relates to the timeframe over which assets are held.

Investment implies a long-term commitment to assets, whereas trading generally implies short to medium-term involvement. Investors seek to gradually build profit through buying and holding assets for a long period of time, which is called holding in the crypto world. 

Article Credit to: www.bitwala.com