Trading

Meaning :

Trading refers to buying and selling financial assets like stocks, commodities, currencies, or cryptocurrencies to earn a profit. Unlike regular trade, trading happens in

financial markets and is influenced by price movements.

Example : 

For instance, buying shares of TCS at ₹3,000 and then selling them at ₹3,200  for a profit is an example of trading.

How to Understand : 

Trading is like running a business in the stock market.

You buy something when its price is low and sell it when its price goes up.

Trading requires knowledge of the market, understanding prices, managing risks, and  making quick decisions.

Importance :

Trading helps investors grow their wealth by making profitable transactions.

It increases liquidity in financial markets, making it easier to buy and sell assets.

Trading supports businesses by providing them with capital to grow.

It reflects the health of the economy, showing how well markets are performing.

Trading encourages financial discipline and strategic thinking among investors.