LEARN TO TRADE · Beginner · 8 min read · 3 Nov 2026 · Navion Pro Research
What Is Trading, and How Do You Get Started?
Trading means buying and selling to profit from changes in price. This guide explains how it works, the main ways and styles of trading, and the steps to take before you place your first trade.
Trading leveraged products carries a high level of risk to your capital. Losses can exceed deposits. Past performance is not an indicator of future results.
Key Points
- Trading is buying and selling assets such as currencies, shares or gold to profit from price changes, often over days, hours or minutes.
- Prices move on supply and demand, which news, data and changing moods shift every day.
- You can trade by owning an asset, or by trading on its price with a CFD.
- Losses are common while you learn. Practise on a demo account, start small and decide your risk before every trade.
What is trading?
Trading is buying and selling with the aim of profiting from a change in price. If you buy something for $100 and sell it for $110, you have made $10, before costs. If you sell it for $90, you have lost $10.
That holds whether the thing is a currency, a share, a barrel of oil or a Bitcoin. What changes is how fast prices move, what moves them and how much each trade costs.
Trading is different from buying to hold for years. A long term holder waits for a company or an economy to grow. A trader focuses on shorter price moves, often holding positions for days, hours or even minutes.
Why prices move
Every price is set by buyers and sellers. When more people want to buy than sell, the price rises. When more want to sell, it falls.
What changes that balance is information:
- Economic data. Inflation, jobs and growth figures can shift expectations for interest rates, which move currencies, bonds, gold and shares.
- Central bank decisions. A change in interest rates, or a hint of one, can move every major market at once.
- Company news. Profits, forecasts and big announcements move individual shares.
- Events. Wars, elections and supply shocks can move oil, gold and currencies within minutes.
- Sentiment. When traders feel confident, they tend to buy riskier assets. When they are worried, they tend to sell them.
A trader's job is not to know the future. It is to understand what could move a price, and to manage the risk if it moves the wrong way.
Two ways to trade: owning or trading on price
| Owning the asset | Trading on its price with a CFD |
|---|---|
| You buy the asset and hold it | You hold a contract on the price, not the asset |
| You usually profit only if the price rises | You can trade on the price rising or falling |
| You pay the full price up front | You put up part of the value as margin |
| Losses are limited to what you paid | Leverage magnifies losses, which can exceed your margin |
Navion Pro offers CFDs. Our guide, What is a CFD, and what are you actually trading?, explains how they work with worked examples.
The markets you can trade
| Market | What you trade | What tends to move it |
|---|---|---|
| Forex | One currency against another, such as EUR/USD | Interest rates, economic data, central banks |
| Global stocks | Shares in large companies worldwide | Profits, forecasts, interest rates |
| Global indices | A whole stock market, such as the S&P 500 | The economy, interest rates, big company results |
| Commodities | Gold, silver, oil and other raw materials | Supply, demand, the dollar, world events |
| Bonds | Government bonds | Interest rates and inflation |
| Crypto | Bitcoin and other cryptocurrencies | Sentiment, interest rates, regulation news |
Many new traders start with one market and learn it well before adding another.
Trading styles: how long you hold a trade
| Style | How long a trade lasts | What it asks of you |
|---|---|---|
| Scalping | Seconds to minutes | Constant attention and fast decisions. Low costs per trade matter most. |
| Day trading | Minutes to hours, closed before the day ends | Several hours of focus during market hours |
| Swing trading | A few days to a few weeks | Regular check ins, and patience through overnight moves |
| Position trading | Weeks to months | A view on bigger trends, and overnight costs to account for |
No style is better than another. The right one depends on how much time you have, how you handle pressure and how much risk you can accept.
How to get started in seven steps
- Learn the basics. Understand how a trade works, what it costs and how leverage affects your money.
- Choose one market. Pick a market you can follow, and learn what moves it.
- Practise on a demo account. Trade with virtual money until placing, managing and closing a trade feels routine.
- Write a trading plan. Set out what you trade, when you enter, when you exit and how much you risk on each trade.
- Decide your risk per trade. Many traders limit each trade to a small share of their account, so one loss never does serious damage.
- Open and fund an account. Register, complete verification and add only funds you can afford to lose.
- Start small, and review every trade. Keep a record of each trade and why you took it, and look back at it regularly.
An example: setting your risk before you trade
This example is for illustration only.
A trader has $1,000 in their account and decides never to risk more than 1% on a single trade. That means no more than $10 can be lost on any one position.
Before opening a trade, they choose where to place a stop loss, the price at which the trade closes automatically if it moves against them. They then size the position so that, if the stop loss is hit, the loss is about $10.
Ten losing trades in a row would cost them about a tenth of their account, not all of it. That gives them room to learn.
Deciding your risk before you trade, not after, is one of the simplest habits in trading, and one of the most important.
Mistakes most new traders make
- Trading without a plan. Entering on a hunch, then deciding what to do as the price moves.
- Risking too much on one trade. A single large loss can undo weeks of careful trading.
- Ignoring costs. Spreads and overnight charges add up, especially on frequent or long held trades.
- Chasing news. Jumping in after a big move, when much of it has often already happened.
- Trading to win back a loss. Raising position size after a loss to recover it quickly.
Our trading psychology section looks at why these habits form, and how to break them.
Risk disclosure: Trading involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. This brief is for information and education only. It is not investment advice, a recommendation or an instruction to buy or sell anything. The likely market reactions described here are our assessments of what could happen, not predictions, and markets can and often do move differently. Figures and forecasts come from third party sources and may change. Make your own decisions, and consider independent advice if you are unsure.
