Recently, someone asked me what trading really is, and I realized that many people confuse it with investing or working with brokers. The truth is, they are quite different things.

A trader is basically someone who buys and sells financial instruments seeking short-term profits. It can be an individual person or work within a financial institution. What differentiates them from an investor is the time horizon: while an investor buys something thinking of holding it for years, a trader is looking at weeks, days, or even minutes. The broker, on the other hand, is the intermediary, the platform that facilitates these transactions.

Now, if you're thinking of getting into this from scratch, you first need to understand how markets work. It’s not just about having money and clicking. It requires learning about technical analysis, understanding how prices react to economic news, and honestly, developing a certain psychology to handle emotions when the market moves against you.

The assets you can trade are varied: stocks, currencies (Forex), commodities like gold or oil, bonds, stock indices, and also contracts for difference or CFDs. CFDs are interesting because they allow you to speculate on price movements without owning the actual asset, and you can open both long and short positions.

There are different trading styles depending on your profile. Day traders operate multiple times during the day closing everything before the session ends. Scalpers go even faster, seeking small but consistent gains. Then there are momentum traders, who aim to capture strong trends, and swing traders who hold positions for several days or weeks. Each requires a different level of dedication and risk tolerance.

The fundamental point here is that what trading really is is an activity that demands constant knowledge. You need to stay updated with financial news, understand the economic fundamentals of what you're trading, and develop a clear strategy based on your risk tolerance and objectives.

Regarding risk management, this is non-negotiable. You need to set stop-losses to limit losses, take profits to secure gains, and never invest more than you're willing to lose. Diversification also matters: don’t concentrate everything in a single asset.

A practical example: imagine you're a momentum trader and notice that the Federal Reserve announces an interest rate hike. Typically, this negatively affects indices. If you see the S&P 500 starting to fall, you could open a short position in CFDs expecting it to continue dropping, with a stop loss above to protect yourself if the market recovers, and a take profit below to secure gains.

Now, the statistical reality is that consistent professional trading is not easy. Studies show that only 13% of day traders achieve positive consistent profitability over six months, and barely 1% generate sustained profits for five years or more. Almost 40% give up in the first month. The market is also evolving toward algorithmic trading, which already accounts for between 60-75% of volume in developed markets, competing with individual traders.

My recommendation: start with serious education, open a demo account to practice without risking real capital, develop your strategy, and consider trading as a secondary income while maintaining a primary source of income. Financial stability is more important than chasing quick gains in the markets.