What is Online Trading?
Online trading means buying and selling financial instruments through a broker’s platform. You take a position on price movements in markets such as currencies, metals, or indices. Trades can make a profit or a loss.
The Simple Idea: Buy Low, Sell High
If you buy at one price and sell at a higher price, the difference is your gross profit before costs. For example, buying one unit at 2,000 and selling it at 2,050 creates a gross gain of 50. Selling at 1,950 creates a loss of 50.
What can You Trade?
Brokers offer access to different asset classes through their trading platforms. The examples below explain the categories. Check the platform for the instruments available to your account.
How a Trade Actually Works
You place an order through your trading platform. The broker processes it according to the instrument’s execution rules and available prices. With a CFD, you are trading price movements rather than buying the underlying asset.
A quote has two prices: the bid, at which you can sell, and the ask, at which you can buy. The difference is the spread, one of the costs of trading.
You can Profit when Prices Fall, Too
CFDs let you take a position in either direction. You go long if you expect a rise, or short if you expect a fall. Either position can lose money. Step 03 explains both through examples.
Where the Broker Fits in
Your broker provides an account, trading platforms, and market prices. Atlas Prime offers MetaTrader 5 (MT5) for charting, placing orders, and managing positions. A demo account lets you practise with virtual funds, although live conditions and the experience of risking money can differ.
Key Takeaways
- Trading means buying and selling instruments to profit from price movements.
- You can trade many asset classes, forex, metals, indices, commodities, energies and crypto, from one account.
- Every price has a bid and an ask; the spread between them is a core cost.
- You can aim to profit whether prices rise (long) or fall (short).
- A demo account lets you practise with virtual funds before trading live.
Practise everything in this lesson on a free demo account.
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