Trading and Stock Market

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Trading and Stock Market by Mind Map: Trading and Stock Market

1. WHAT IS TRADING ? The term “trading” simply means “exchanging one item for another”. We usually understand this to be the exchanging of goods for money or in other words, simply buying something.

2. ADVANTAGES OF TRADING

2.1. TRADING : 1. INCREASED REVENUES - increase your number of potential clients

2.2. 2. Benefiting from currency exchange Those who add international trade to their portfolio may also benefit from currency fluctuations.

3. ADVANTAGES OF INVESTING

3.1. 1.

3.1.1. 1- You Stay Ahead of Inflation:

3.1.2. If you don’t invest and grow your money, you’ll actually end up losing money over time.

3.2. 2 – Investing Will Help You Build Wealth:

3.3. I think this should go without saying, but I’m going to say it anyway: Investing is how you build wealth.

4. What Does the Risk/Reward Ratio Tell You?

5. The risk/reward ratio helps investors manage their risk of losing money on trades. Even if a trader has some profitable trades, he will lose money over time if his win rate is below 50%. The risk/reward ratio measures the difference between a trade entry point to a stop-loss and a sell or take-profit order.

6. Stock, Share & Equity:

6.1. Equity

6.2. An equity investment indicates ownership. You typically purchase an equity investment because you expect the value of the investment to increase, because you expect to obtain some other benefit from the investment, or a combination of the two.

6.3. Stock

6.4. Businesses may be organized in a number of different ways, including sole proprietorships, partnerships or corporations. A business may offer to sell a portion of its ownership by issuing stock.

6.5. Shares

6.6. A company's stock is divided into shares. Each share represents an equal amount of ownership in the company and is entitled to a participation in the company's profits and losses that is equal to every other share.