InvestorQ : What is meant by trading in context of the market?
Radhika Arya made post

What is meant by trading in context of the market?

Rashi Mehra answered.
3 years ago

Trading is a game that involves a number of parameters. When you are trading you are not essentially operating in isolation. There is capital outlay involved and capital has a cost. There is a risk element in trading and the risk has to be managed. You trade with finite capital and therefore your risk of capital loss has to be deftly managed. Above all, trading is one of the methods of making profits in the market. If you realize that your passive investments are earning you better returns then you must not be trading anyway. As a trader you are not overly worried about the direction of the market. You focus should be more on what is the best you can do to churn your capital without compromising the safety of capital beyond a point. The most important reason to put trading in perspective is that trading entails investment of capital and a lot of time. Ensure that it is the best way to allocate and utilize your time resource. Trading is all about smart allocation resources.