When you buy a water bottle at the grocery store, you are trading a certain amount of your local currency for the water bottle.
Even cavemen did trade, but at that time, money didn't exist, so the trading was done in a form of barter – by exchanging things or services to one another.
So, in simple terms, trading is an exchange of any kind of value.
Trading the financial markets
In the financial markets, you exchange various assets against each other. Dollar against Euro, Bitcoin against the Dollar, Tesla stock against the Dollar, and so on. Millions of individuals and institutions are doing this on daily basis.
You buy something for one price and sell it again for another. For example, if you bought Bitcoin at $10,000 and sold at $50,000, you'd have made $40,000 in profit. You can also trade reversely, by predicting something will decrease in price.
Trading in the 21st century
Unlike buying a water bottle at a grocery store, trading the financial markets happens electronically. Nowadays, you can do it even from your smartphone. This is the sole purpose of NAGA – to make trading as accessible as possible to individuals worldwide.
You have to set the investment amount and direction of the trade (Buy/Up or Sell/Down), and the software will execute your order. Later on, you can close the trade with a profit or loss. On NAGA you can also find other traders to copy trade and mirror their trading activity.
Determining the trade direction
In general, the change in price is due to the demand for and supply of the asset.
Let's say the supply of petrol is limited, however; the demand remains stable, the price of Crude Oil (the main ingredient for producing petrol) is likely to rise in the future. Or vice versa, if demand for petrol is decreasing and the supply remains stable, the price of Crude Oil is likely to drop in the future.
The same principle applies to gold, stocks, currencies, and all other financial assets.
Other specifics of trading
Understanding supply and demand may be an important aspect to start trading financial assets. However, it's best to be familiar with all the main aspects that are often used by traders around the world. We have listed few things you might want to learn next:
Best regards, your NAGA team!