If you’ve been researching the investment market then you have probably noticed that a lot of people are referred to as “traders.” So who are these people, and what do they do? Well, if you guessed that traders trade, then you guessed right. But what does that mean?
In the past, traders were often intrepid entrepreneurs who would set off for far away lands. For example, spice traders in Europe would trek literally across the known world, bringing European goods to China to trade for spices. They’d then take the spices back to Europe and sell them for a huge profit.
These days, traders often work on stock exchanges, in office buildings, and even from home. Gone are the days when someone looking to conduct a trade would actually have to travel from place to place getting goods. Instead, a trader can simply connect to the internet or pick up his or her phone and call a trading broker.
Indeed, the internet has automated most forms of trading, including stock trades. Now, electronic systems that spread the globe can organize and coordinate trades on a hitherto unimaginable scale. So who can get in on the action?
How Anyone Can Become a Trader
Okay, not everyone can become a trader. The first requirement of trading is having something of your own to trade. Usually that means money. Don’t fret if you’re not already a millionaire, however, it’s easy to start trading with even small amounts of money.
Next, you need to find a trading platform. These days, that usually means the internet. While some over-the-phone systems still exist, it’s usually advisable to invest in a computer and an internet connection if you don’t already have one. And make sure you have pretty good basic computer skills. If nothing else, being good with computers will help you research what things to buy and what to sell.
Once you have some money together and your computer all set up, you need to find a trading platform. The vast majority of people who trade these days trade in financial instruments. Stock traders, forex traders, bonds traders, you name it, they trade it.
What traders trade
So what do traders trade? We’ve already hinted at this, but let’s continue to look at the subject. Most traders trade financial instruments and commodities through world markets. Simply put, this buying and selling is what makes the world go round. Right now, thousands of people are engaging in trading.
They are buying and selling just about everything imaginable. Someone, somewhere, is making the decision to buy American dollars using some other foreign currency. Elsewhere, someone else is deciding to sell American dollars to buy other foreign currency. Somewhere else, stocks are being traded, as are gold and oil. On and on the list goes.
Depending on the day and the time, stock markets in Hong Kong, Singapore, London, New York, or elsewhere might be open. And if they are, literally thousands and millions of transactions will be taking place. These traders will be determining the current value of a company. Indeed, in some cases they may even be determining if a company is about ready to take off, or if it’s on the verge of being pushed into bankruptcy.
The global economy is truly global and that means that resources must be coordinated on a global scale. Resources must be bought in one country, and then are often shipped to another country to be processed. From here, the products might be shipped yet again to another country to be sold. At each step of the way, traders are there doing what they do best, trading.
Of course, if you want to trade yourself, then you should look into investing in stocks, bonds, or one of the many other types of financial instruments now available.