A Guide to Trading and Trading Desks
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Loading... - Bear Street
- 29 Sep 2022
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Trading by definition is a process of buying and selling of assets or securities to earn profit. The securities that are traded can be foreign currency, stocks, shares, bonds among others. Investment on a contrary is a process that follows buy and hold strategy. For beginners especially, with no knowledge base for the trading or investing, the entire process would seem to be a complex task, but once all the core concepts are understood and learnt, one will understand that there is no more lucrative business than trading. A basic knowledge of assets, trading platforms, broker and most importantly trading techniques and strategies is very important to get into the field. It’s the hard earned much that is put at stake and hence a trader should be wise enough to make calculated move. At the same time, it should be understood that it has its own share of ups and downs, and losses are part of the journey.
A Beginners Guide for Trading
In the age of digitalisation, even the trading floors have gone online and thing have been eased for this new generation. To begin a successful journey in trading, the first and foremost thing required is a demat or trading account, which is usually opened by a broker. A broker is an entity that deals on behalf of the trader and hence it should be a trustworthy and registered source. Altogether as the financial market is constantly moving, and hence it brings in an amount of risk. The following point explains the relevant points associated with forex trading:
- Before starting the journey, it is important to understand forex market. You can enrol for classes on forex trading for beginners in Delhi
- The next step is to open a brokerage account. Forex brokers do not charge commission. A beginner can start with a micro forex trading account that required comparatively less capital investment
- Every professional trader has some or the other trading strategies and techniques but that necessarily won’t work every time. For beginners it is suggested to develop their own strategy that suits their goals and investment
- Consider checking your position at the end of every day, to make sure that you have enough fund in your account for future transactions
- Have a control on your emotions – Failures are bound to happen in a business-like trading so don’t let either failure or success get on you and remain focus throughput the journey
A beginner forex trader must be aware of certain terminologies that are frequently used in the business. Some of them are listed below:
- Forex account – This is a trading account that is used to make trades and are classified into micro, mini and standard forex accounts
- Ask and Bid price- Ask is the price at which a buyer is willing to buy a currency while bid price is a price at which a seller is willing to sell the currency
- Proprietary traders in India – When a trading desk within a stock exchange or similar firms starts trading for personal promotion and activity, it is known as proprietary trading and the entity involved in this is called as proprietary trader
- Bear and Bull market – When price decline among currencies it is called as a bear market and when price increases for all currencies, it is known as bull market
All about Trading Desks
There are many types of trading desks in Delhi, and as per the definition, it is a physical office or department in a financial institution where all kinds of securities and assets are purchased and sold on the basis of client’s demand. Hence it is also known as dealing desk. Some of the most popular trading desks in the business are as follows:
- Equity trading desk – This facilitates trading for equity derivatives, options trading and a wide range of entities
- Fixed income trading desk – Bonds are considered t be among the category of fixed income and hence these trading desks are meant for such assets. They also deal with CDS or credit default swaps
- Foreign exchange trading desks – These are the most potential trading desks that deals with foreign currency. The market for foreign currency is highly volatile with large volume, hence these trading desks acts as a market maker. These trading desks can also act as proprietary trading desk
- Commodity trading desks – they mainly deal with agricultural products, gold, oil and similar commodities
