Trader

Trader

What is a trader?

A trader is a person who buys and sells financial instruments (such as stocks, currencies or commodities) in a financial market.

Traders may trade for themselves, on behalf of the institution they work for or on behalf of a client, acting as intermediary between the client and a market maker.

Individual traders are usually referred to as ‘retail’ traders while professionals working for a large financial institution or company are known as ‘institutional’ traders.

What do traders do?

Traders look for profitable trading opportunities by analysing financial and economic data, making use of technical analysis, seeking to identify anything that is over- or under-valued, and by drawing on their own knowledge and experience.

They often have to make very quick decisions based on small price fluctuations and select the most appropriate trading strategies.

In order to make a profit, traders will have to take a certain amount of risk. Sensible money management is therefore important to any trader, but especially to beginner traders as they gain experience in the markets.

Traders that specialise in certain styles, asset classes or trading strategies might identify themselves with a more specific term such as day traders or swing traders.

Some areas of specialisation include:

What's the difference between a trader and an investor?

The main difference between traders and investors is that traders will look at the market itself while investors will be more concerned with fundamental analysis.

While traders are likely to focus on price patterns, trends, changes in supply and demand, and even emotional market reactions; investors are more commonly associated with analysing the financial health of a company and making longer-term investments.

In terms of cross-over, the activity of traders contributes to market liquidity and thereby facilitates the transactions of investors. And likewise, the activities of investors provide a foundation from which traders can then buy and sell. Together they contribute to the proper overall functioning of the financial markets.

As a community and school for trading, tradimo offers plenty of valuable information for traders. We welcome beginners and experienced traders alike.

If you are a new trader, we recommend that you start here:

As a more experienced trader, you might want to check out our trading terminology, our trading forum or our trading school.

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