What Is Trading?
Trading is buying something with the intention of selling it later at a different price. Every decision reduces to three prices chosen before entry - where you get in, where you are wrong, and where you are done - and to how much of the account rides on each one.
Buy something, sell it later, keep the difference. Everything difficult about it comes from four decisions, and none of them is which indicator to use.
How it works
A chart is a record of prices people agreed on. Each candle shows where a period opened, how high and low it went, and where it closed — the chart reading page takes that from an empty screen to a decision.
A trade is a bet that the next agreement will be at a different price, in a direction you have named in advance.
Nothing about that changes between markets. Stocks, forex, crypto and futures differ in their hours, costs and data — not in how a chart is read.
Decision one: three prices
Entry — where you get in. Stop — the price that says the read was wrong. Target — where you are done.
All three are chosen while you are flat, which is the only condition in which they can be chosen calmly. The entry and exit page is the long version.
A trade without a stop is not a trade with more room. It is a position with no defined loss, which is a different thing being run by accident.
Decision two: how much
This one matters more than the analysis and gets a fraction of the attention.
The risk per trade formula is one line: money you will risk, divided by the distance to the stop, gives the position size.
The consequence is measurable. A run of five losses is ordinary in any long record where wins and losses come close to even — the trading psychology page covers what that run does to judgment. At 2% risked per trade that leaves 90% of the account; at 20% it leaves 33% and needs +205% to recover.
Same run, same trades, same reads. The only difference was decided beforehand.
Decision three: how fast
Costs scale with the number of trades. What the market offers does not.
Say a rule pays a fixed 0.10 per trade in costs. Run fast, it averages a 0.15 gross gain per trade and costs take 67% of it; run slow, it averages 3.00 per trade and costs take 3%. The same rule can finish ahead at one speed and behind at another.
Which is why “which timeframe” is not a preference. It is the decision that sets your cost base, and the scalping, day trading, swing trading and position trading pages each work through one end of it.
Decision four: which market
Pick on structure, not on personality. When does it trade, what does it cost, is the volume real, and how much leverage arrives by default.
That last one decides the most. Leverage does nothing to the chart and everything to the account: at 20 times, one ordinary bar against you is about a third of it.
The forex or stocks page runs the comparison difference by difference, and the conclusion generalizes — neither market is easier, and the leverage available is the difference that shows up in results.
And then the boring part
A hundred trades pins a win rate to about ten percentage points either way. Twenty-five pins it to twenty.
So a judgment about whether something works needs a sample most people never reach, which is what the trading journal page is about — and why changing the rule after five trades produces a record of many rules with one trade each.
Record the decision, not the result. A good decision can lose and a bad one can win, and over a small number of trades that is the usual case.
A worked example
Pick one market and one timeframe. Not because they are best — because everything downstream depends on them being fixed.
Write the three prices down before entering. If you cannot write the reason in one sentence, the trade is not ready.
Size from the stop, so the leverage is a consequence rather than a choice.
Then take a hundred of them without changing anything, and only then decide whether it works.
The original data
Across our study of 24,971 trading videos, only 3 ask in the title what trading is, and one of them reached 484,971 views.
The corpus carries description text for 2 of those 3, which is too thin to say anything about, and this page does not.
Three videos. Against 1,313 on forex, 960 on day trading and 594 on relative strength index (RSI).
The most basic question in the subject has one of the smallest fields measured here — alongside long and short at 5 and swing highs and lows at 2 — while the few videos that exist can draw a very large audience — and it repeats on the stock market, where the basic subject out-draws forex per video.
When it fails
There was no stop
The single most common way a plan stops being a plan, and it happens after entry rather than before.
The size was decided by the opportunity
“This one looks good, so I will take more” is how an ordinary losing run becomes a permanent problem.
You traded through the quiet
The S&P 500 went 1,897 trading days without a new record close after January 1973, so a signal that waited for fresh highs would have sat silent until July 1980. Waiting is the job, and it is the part no video can show you.
You judged it from the finished chart
The question: So: buy, sell, or wait?
Every chart in every explanation has its answer already printed. The live one does not, and learning to decide without it is the whole skill.
Related
Chart reading is where to start: an empty chart to a decision, in four steps.
Risk per trade is the formula behind the decision that matters most.
And the trading journal is how you find out whether any of it is working.
The decisions worth agonizing over are the ones I make while I am flat. Once I am in a position, every option available is worse than the one that existed before entry, and most bad results come from making a new decision after the position exists.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.