Trades
Access global markets through copy trading, equities, and foreign exchange — with the tools and research to trade them well.
Stock
Stock trading involves buying and selling shares of publicly traded companies on the stock market with the goal of generating profit. Here's a breakdown of the key aspects:
A share is a unit of ownership in a business, not a token whose value the exchange decides. A shareholder owns a fraction of the company's residual value — what is left after its obligations are met — and, where the company pays them, a fraction of its dividends. The quoted price is only the level at which the most recent buyer and seller agreed to trade. It represents consensus about the company's prospects, and consensus can be wrong in either direction.
People come to shares with different intentions. An investor buys because they expect the business to be worth more over years, and measures success against that expectation. A trader buys because they expect the price to move over hours, days, or weeks, and measures success against the move. Both are legitimate, but they rely on different evidence, hold positions for different lengths of time, and are exposed to different kinds of error. Confusing the two — holding a trade as though it were an investment, or abandoning an investment because of a short-term move — is one of the more common ways to lose money in either approach.
Stock Market
Stock trading primarily takes place on stock exchanges, which are platforms where buyers and sellers come together to trade stocks. Examples of major stock exchanges include the New York Stock Exchange (NYSE) and the NASDAQ in the United States, the London Stock Exchange (LSE) in the UK, and the Tokyo Stock Exchange (TSE) in Japan.
Buying and Selling
To trade stocks, investors need to open a brokerage account with a brokerage firm. They can then place orders to buy or sell shares of specific companies. There are different types of orders, including market orders (executed at the current market price), limit orders (executed at a specified price or better), and stop orders (triggered when the stock reaches a certain price).
Risk Management
Stock trading involves inherent risks, including market volatility, company-specific risks, and macroeconomic factors. Risk management strategies such as diversification (investing in a variety of stocks across different sectors), setting stop-loss orders (to limit potential losses), and proper position sizing (not risking too much capital on any single trade) are crucial for managing risk.
Research and Analysis
Successful stock trading often requires thorough research and analysis. This may involve fundamental analysis (examining a company's financial health, management team, competitive position, etc.) and technical analysis (analyzing historical price and volume data to identify patterns and trends).
Regulation and Compliance
Stock trading is regulated by government agencies such as the Securities and Exchange Commission (SEC) in the United States and the Financial Conduct Authority (FCA) in the UK. Investors need to comply with regulations related to trading activities, disclosure of information, and protection of investors' interests.
Order types and what they control
A trade begins with an order, and the order type decides how much control you keep over the price and how likely the trade is to happen at all. The definitions below are the ones used on most exchanges. Their practical differences show up precisely when the market is moving quickly, because that is when the price you expected and the price you receive diverge.
| Order type | What it instructs | What it does not promise |
|---|---|---|
| Market order | Buy or sell at the best price available at that moment. | It sets no price. The fill is whatever the order book offers when the order arrives, which in a fast market can be well away from the last quoted price. |
| Limit order | Buy or sell only at a specified price or better. | It does not guarantee a fill. If the market never trades at the limit, the order rests unfilled and can be missed while the price moves away. |
| Stop order | Rests until a trigger price is reached, then becomes a market order. | It does not cap the price you receive. The trigger starts the order; the fill depends on what the book holds once it fires. |
| Stop-limit order | Rests until a trigger price is reached, then becomes a limit order. | It bounds the price but not the outcome: if the market gaps through the limit, the order may not execute at all. |
When the market is open
Exchanges are not open around the clock, but trading does not stop completely at the closing bell. The distinction matters because the conditions outside regular hours are not the same as the conditions within them, and a price agreed in thin trading is a weaker signal than one agreed where most participants are present.
The regular session is where the market's price discovery really happens. It is also the part of the day most exposed to scheduled company news, which is why an opening price can differ sharply from the level the shares reached overnight. A trader who holds a position through a gap is exposed to the full difference, not just to the movement that occurred while they were watching.
| Session | How it works | What to weigh |
|---|---|---|
| Regular session | The hours an exchange sets for its own market, held through the local business day. | The deepest pool of buyers and sellers, and the period from which official closing prices are taken. |
| Pre-market | Electronic venues accept orders before the official open. | Thinner volume and wider spreads, so prices set on few trades may not hold once the regular session begins. |
| After-hours | Trading continues on electronic venues after the official close, often around earnings releases. | The same thin conditions apply, and a move can reverse sharply when the next session opens. |
| Cross-market and overnight | Many instruments trade on linked venues and in other time zones outside their home exchange. | There is less of a single opening or closing price; the last trade is only the most recent match, not a settled value. |
What stock risk actually looks like
Loss has two sources, and they behave differently. The first is the market: when sentiment turns, most shares fall together, and holding a spread of names does not protect against that. The second is the company: a business can miss expectations, lose a major customer, or face a competitor it cannot answer, and its shares can fall while the wider market rises. Diversification reduces the second kind of risk, because one company's trouble is diluted across the portfolio. It does very little about the first.
A falling price is not the same thing as a loss. A loss is only realised when a position is sold, which is why the decision about when to sell matters more than any single day's quote. The difficulty is that the same movement feels different depending on whether it is temporary or permanent, and that is rarely knowable in advance. Investors who mistake volatility for a reason to sell, or a decline for a reason to hold, both pay for the error.
Stop orders are often described as protection, but they are a boundary rather than a guarantee. A stop becomes a market order once its trigger is reached, so the price it receives depends on what buyers are willing to pay at that instant. When a stock gaps down overnight, the first trade of the next session can be far below the trigger, and the stop offers no defence against the gap it was meant to limit.
Borrowed money changes the arithmetic. Buying on margin magnifies a gain and a loss in equal measure, and a loss large enough to breach the maintenance requirement can force a sale at the moment least suited to it. Instruments built on top of shares, such as options, add their own ways to lose: time, changes in implied volatility, and the possibility of an entire premium expiring without value. None of this is a reason to avoid the market. It is a reason to size positions so that a single mistake is survivable, and to decide in advance what you are willing to lose.
Where to go next
The forex page covers the currency market, where pairs rather than single instruments are traded, where leverage is common, and where the market runs continuously through the working week. The markets overview sets out the full range of instruments and asset classes available, so you can see where equities sit alongside them.