Casual trading

CASUAL trading is a newly developed variant of financial trading. It consists of the same principles carried out in trading rooms but involves the use of trading platforms that can be operated from the trader's residence.

Casual trading is a general name for all trading actions that are carried out by individuals without the use of a mediator. They can be found in STOCK exchange, foreign exchange, commodities and other markets.

General trading markets

There are three major markets in casual trading. They are -- stocks, foreign exchange (forex) and commodities.

Stock market stock trading or (equity trading) is trading of company stock and derivatives of company stock at an agreed price. Both of these are securities listed on a stock exchange as well as those only traded privately.

In foreign exchange (currency or forex or FX), market traders select a currency pair in which one currency is traded for another. It is by far the largest financial market in the world, with the average daily trade in the global forex and related markets estimated at US$ 3 trillion. In forex, it is common to use leveraging which enables traders to generate large profits but which is considered quite risky for the inexperienced trader.

Commodities are things for which there is demand, but which are supplied without qualitative differentiation across a given market. Characteristic of commodities is that their prices are determined as a function of their market as a whole. GeneRally, these are basic resources and agricultural products such as iron ore, crude oil, coal, etc (for a full list see List of traded commodities).

Casual trading versus standard trading

The principal differences between casual trading and floor trading are in the traders' experience, volume and location. Professional traders usually carry out their trades from the trading floor and carry large volumes. Casual traders do not trade as a profession but as an addition to their everyday lives. They usually trade from their own homes or "day job" offices using an Internet connection and a trading platform software day trading software, which is monitored and regulated by the National Futures Association (NFA).

Sources

• Stone Amey , "The Darwinism of Day trading" Businessweek online
• Commodity Futures Trading Commission
• Alex Frino, David Johnstone and Hui Zheng, The propensity for local traders in futures markets to ride losses: Evidence of irrational or rational behavior? Sciencedirect research database.
• National Futures Association
• Egan, Jack. "Check the Currency Risk. Then Multiply by 100", New York Times, June 19, 2005.
• Vincent , Matthew " FX marks the spot for more traders" Financial Times online

See also

• stock trader
• day trader
• floor trader
• paper trading

External links

• Federal Reserve Bank of New York Stock, Foreign Exchange and commodities related material.