Trading Strategy

Shares are units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends. The two main types of shares are common shares and preferred shares. Physical paper stock certificates have been replaced with electronic recording of stock shares, just as mutual fund shares are recorded electronically.

A trader is an individual who engages in the buying and selling of financial assets in any financial market, either for himself or on behalf of another person or institution. The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer-term time horizon, while traders tend to hold assets for shorter periods of time to capitalize on short-term trends.

A stock exchange or securities exchange is an exchange (or bourse) where stock brokers and traders can buy and sell shares of stock, bonds, and other securities. Stock exchanges may also provide facilities for issue and redemption of securities and other financial instruments and capital events including the payment of income and dividends. 

A trading strategy is a set of analyses that a forex trader uses to determine whether to buy or sell a currency pair at any given time. Forex trading strategies can be based on technical analysis, chart analysis, or fundamental, news-based events. The trader’s currency trading strategy is usually made up of trading signals that trigger buy or sell decisions. Trading strategies are available on the internet or may be developed by traders themselves.

A pip is the smallest price move that a given exchange rate makes based on market convention. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point; for most pairs, this is the equivalent of 1/100 of 1%, or one basis point.