Introduction

Trading is the act of buying and selling financial assets. This can mean trading on stock exchanges, but also trading crypto in an app on your phone. You buy and sell financial products to make a profit. Put simply: you buy when you think the price will rise, and sell when you think the price will fall. The difference between your buy and sell price is your profit (or loss).

Can you only make money when prices rise?

No. You can also profit when markets fall. You do this by going "short" instead of "long".

Going long means buying an asset because you expect the price to rise. This is what most people know: buy low, sell high.

Going short means trying to profit when the price falls. You sell a borrowed asset first and buy it back later at a lower price. The difference is your profit. For you as a trader, this is simple: in your platform, you click "Sell" instead of "Buy." The rest happens automatically. You do not have to borrow or return anything yourself - your broker handles that. This allows you to benefit from both rising and falling markets.

Which financial products can you trade?

Indices

An index is a group of multiple stocks that together represent the performance of a specific market. Think of the DAX in Germany, or the S&P 500 and Nasdaq in the U.S. By trading an index, you are trading an entire group of companies at once. This reduces the chance of extreme moves in a single stock.

Stocks

Stocks represent ownership in a company. When a company performs well, the value of its stock usually rises. The U.S. market is especially popular among traders because of its high liquidity and volatility.

Crypto

Cryptocurrencies such as Bitcoin and Ethereum are digital currencies. This market is open 24/7 and highly volatile. Great for traders who like fast moves, but also riskier.

Forex

Forex is the trading of currencies. For example, you trade euros against dollars. This market is extremely large and highly liquid, with spreads that are often smaller than in stocks.

Futures

Futures are contracts to buy or sell an asset in the future at a fixed price. You trade with leverage, which means you can open large positions with relatively little capital. This increases both profit potential and loss potential. Only trade futures if you really know what you are doing.

Options

Options give you the right (but not the obligation) to buy or sell an asset at a specific price. They are more complex than stocks, but offer more strategic possibilities.

Where should a beginner start?

As a beginner, indices and stocks are usually the best place to start. They are easier to understand and often show clearer, more predictable behavior. You do not need to understand complex contracts like futures or options, and there is a lot of reliable information and analysis available. Costs are also generally lower, and risks are easier to manage than with advanced products such as high-leverage crypto or forex.

Is trading difficult?

Now that you know what trading is and which products you can trade, it may sound like an ideal way to make money. You click a button, price moves, and you profit. But if it were that simple, everyone would do it.

In practice, trading is a serious craft with many factors. You will also find very different stories online: from people who became millionaires to warnings that it is pure fraud.

So what is the reality? Is trading a legitimate opportunity or an organized scam? Read more on the next page: Trading: lucrative or scam?