Liquidity: how fast you can turn something into cash.
That's different from how fast something can be given a value.
Most stocks are liquid, because you can sell them and have the cash within a week. Real estate is not nearly as liquid, because it may take a couple months to sell a house.
The problem is that if someone tells you what trading is then it is their idea and not much practical use. You have to think about trading (buying something and selling it for more) for yourself (some original thought!). Otherwise you will just be a buyer when everyone else is a buyer and a seller when everyone else is a seller. Not good. As well as fundamental reasons for value trading incorporates a lot of psychology. Think about selling a second hand car. The dealer knows his profit margin, on the other hande needs to shift stock. The buyer usually falls in love with the vehicle and cannot see any downside. The dealer has a huge advantage that should/must be countered by the buyer if he is to buy at the right price.
i have no idea
I am currently studying A-Levels and looking forward to starting an undergraduate course in International Finance this September. So, I know what stocks are and that their price (like most anything else) is determined by market forces, etc etc. I understand many things about trading such as purchasing long and short positions and taking advantage of this for the purpose of hedging your risk.
But hey, what is all this I hear about financial instruments? In my head I can't help but picture an ATM, yet I know it's something else! And derivatives are what now? Plus I thought liquidity referred to how easily something can be given a value, but my definition becomes pretty useless when I'm researching trading. Also if you can elaborate on equity, debt, margines etc for me that would be great.
And let me make this clear: I am not interested in retail trading. I am studying my degree before being trained professionally. I am simply extremely interested and would like a head start to make full use of my potential :)
Thank you in advance if you give me a good answer (no investopedia/youtube links).
