Trade: A Practical Guide to Starting Your Operations in the Financial Market

What Is Trading and How It Works in Practice

If you’ve heard of trading and wondered “what is trading really,” know that it involves financial operations carried out over short periods, where the goal is to take advantage of price fluctuations of assets. Unlike traditional investing, which seeks long-term results, trading focuses on quick movements — whether they last minutes, hours, days, or a few weeks.

In the context of the Brazilian financial market, trading operations mainly occur on the Stock Exchange but also include other environments such as forex, indices, and commodities. Everything operates digitally through specialized platforms that enable swift execution and full control over orders.

The dynamics are simple: a trader — that is, a trader — buys an asset at a certain value and sells it at a higher price, capturing the difference as profit. The opposite is also valid: they can sell first and buy back cheaper, profiting from depreciation. What matters is the ability to identify these movement opportunities before they complete.

Who Is the Trader and What They Really Do

A trader is nothing more than an active market participant in the financial market. But their routine is quite different from the romanticized view many people have. In reality, they spend significant time analyzing charts, monitoring economic indicators, following news and political contexts that could impact prices.

A trader’s decision-making is not based on guesses but on structured analysis. They observe trends, identify movement patterns, and act swiftly when opportunities aligned with their strategy arise. This requires operational discipline, clear goal setting, and above all, emotional control — after all, inevitable losses should not lead to impulsive decisions.

Success is intrinsically linked to risk management capacity, never putting all capital into a single position, and constantly recording results to continually improve the strategy.

Trader Versus Investor: Completely Different Approaches

Although both operate within the same financial ecosystem, trader and investor follow distinct paths. A trader seeks to exploit short-term volatile movements, entering and exiting positions quickly. Their analysis is predominantly technical, focusing on charts, entry and exit timing, and strict risk management — because small price variations can make a significant difference in the final outcome.

In contrast, the investor thinks in medium and long-term horizons. They examine company fundamentals, economic growth prospects, business quality, and potential value generation over time. Instead of reacting to daily fluctuations, they hold positions for months or years, aiming for stable returns and less operational movement.

From a behavioral perspective, trading attracts individuals with higher risk tolerance and availability to monitor markets daily. Traditional investing is better suited for those who prefer less dynamic strategies and focus on long-term wealth planning.

In practice, many participants combine both approaches: using trading to capture specific opportunities and maintaining investments for more distant goals.

The Different Profiles of Market Participants

There is a considerable variety of traders, each operating with different logics and objectives:

Institutional trader: works for large institutions such as banks, investment funds, and insurance companies. Handles high volumes of capital following predefined strategies, with access to advanced tools and detailed market information.

Execution trader: also known as a broker, their role is to execute buy and sell orders according to client instructions. They do not define strategy, only ensure precision and efficiency in execution.

Sales trader: combines trading with commercial relationships. Besides executing operations, they offer analysis, ideas, and strategic support to clients in a consultative manner.

Independent trader: operates with their own capital, makes all decisions alone, and fully assumes the risks and benefits of operations. They can be beginners or experienced, but the responsibility is entirely personal.

Main Trading Styles

Traders also differ by the duration and frequency of their operations. Meet the main ones:

Day trader: opens and closes positions within the same day, exploiting quick movements. Operations can last minutes or a few hours, requiring high concentration and continuous monitoring.

Scalper trader: works on extremely short timeframes, seeking small repeated gains throughout the day. Speed of execution and risk control are absolutely essential.

Swing trader: performs operations lasting from one day to several weeks. The focus is on capturing more significant market movements, using technical analysis and trend identification.

Position trader: maintains positions over extended periods — weeks, months, or even years. Although operating in variable income, the approach is closer to medium-term strategies.

High Frequency Trader (HFT): operations executed in seconds or fractions of a second, usually automated through robots and sophisticated algorithms.

Comparison Between Main Styles

Who Is Capable of Becoming a Trader

Technically, anyone can start trading, regardless of age or initial capital. However, trading involves significant risks and is more suitable for those with an adventurous profile who deeply understand the characteristics of variable income.

Some elements considerably increase the chances of success:

• Financial organization and discipline
• Solid knowledge of how the financial market works
• Ability to control emotions and impulses
• Access to reliable and well-equipped trading platforms
• Consistency and commitment to the defined strategy

Fundamental Steps to Start Trading

Identify your risk profile: perform suitability tests to understand your true risk tolerance and how much volatility you can psychologically withstand.

Invest in knowledge: courses, specialized books, and quality content help build a solid foundation before trading with real money.

Choose your operational style: select between Day Trade, Swing Trade, Scalping, or Position Trade — each requires different skills, time availability, and risk tolerance.

Set clear limits: establish profit and maximum loss targets (stop loss and stop gain) before each operation, avoiding emotional decisions during execution.

Select a robust platform: execution speed, system stability, and advanced analysis tools are fundamental for quality operations.

Manage risk rigorously: never concentrate all your exposure in a single position and constantly monitor your results to identify improvements.

How Traders Really Make Money

A trader’s profit source comes from identifying price movements and closing positions at strategic moments. Mathematically, the gain is the difference between entry and exit prices, minus operational costs and considering risk management.

A practical example: a trader identifies a support zone in a stock traded on the Stock Exchange, where historically the price reacts. Observing signs of buying strength, they enter the trade buying the stock at R$ 20.00. Hours later, with the market moving positively, the price reaches R$ 21.00 — a previously set target level. At this point, they close the trade and realize a profit of R$ 1.00 per share.

The same reasoning applies to sell operations: identifying a downward trend, selling the asset first, and buying back cheaper later, profiting from depreciation.

The critical factor is not winning every time but keeping losses under control and letting gains outweigh losses, ensuring consistent profitability over the operational period.

Pillars of a Successful Trader

Being a consistent trader goes beyond analysis techniques. The essential foundations include:

• Continuous education and constant market updates
• Discipline in executing according to the predefined plan
• Emotional management during losses and gains
• Rigor in capital and risk management
• Systematic performance monitoring and strategic adjustments

The trader who prospers understands that results come with time, repeated practice, and continuous learning — never through promises of quick and easy gains.

Before trading with real money, use demo accounts to understand practical market functioning, test strategies, and refine your approach. Choosing a regulated broker suitable for your profile and equipped with quality tools is the first concrete step to operate safely in the trading universe.

Starting with solid foundations, patience, and a willingness to learn continuously significantly increases the chances of building a profitable and sustainable operation over time.