Trading Skills

Trading is different from investing, usually focused on more short-term movements in markets. Learn the essentials you'll need to know to be a successful trader.

Frequently Asked Questions
  • What is a stock?

    A stock is a security that represents the ownership of a part of a company; it is also commonly referred to as a share, or equity, in the company. Stocks can be bought and sold on the open market via stock exchanges, and those transactions are governed by various regulations meant to protect the investing public.

  • What is Volume-Weighted Average Price (VWAP)?

    Also known as the VWAP, the Volume-Weighted Average Price is a trading benchmark that is used by traders to see the average price that a security has traded through the day, in both volume and prices of trades.

  • What is a limit order?

    A limit order is a kind of order that an investor makes when he or she wants to buy or sell a stock at a specific price. The two types of such orders are a buy limit order, whereby the order will be placed at the limit price or lower, and the sell limit order, where the order will be executed at the limit price or higher.

  • What is the risk/reward ratio?

    The risk/reward ratio is used by investors to measure the prospects of reward for their investments over the potential risk of losing that capital. The ratio helps assess the expected return and risk of a given trade.

Key Terms
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