Introduction to Trading - Mini Course! | TheTradingBible Beginners Resources | Skillshare

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

7 Lessons (51m)
    • 1. Lesson 1 - Introduction to Trading

    • 2. What is Trading?

    • 3. What am I Trading?

    • 4. Where am I usually Trading?

    • 5. Who gives me access to Trade?

    • 6. How do people approach trading?

    • 7. Summary

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About This Class

Are you a beginner looking to learn about trading or to get started?

Would you like to learn how to make your own trading decisions based on logic instead of following someone else's school of thought?

Would you like to learn from someone who actually worked inside the CFD Brokers industry?

This course is for you.

Get a brief introduction to trading and find out if it's really your thing, or not!

*** Disclaimer: Trading is risky, you should consider if you can afford the high risk of loosing your money. This course does not provides any type of financial investment advise in any form neither any recommendations to buy, sell, hold assets or perform any type of transactions. All of the course materials in any form (such as text, emails, videos, audio recordings, pdfs) are provided exclusively as informational and educational content of impersonal nature as it's not tailored to any specific person needs. If you choose to trade, you're doing so at your own risk and choice without any type of guidance from this course or it's author.

Meet Your Teacher

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TheTradingBible Beginners Resources

Founder at TheTradingBible


After thousands of conversations with investors and traders from well-known brands in the CFD industry, we realised there was something missing. Every beginner had a strong desire to learn how to trade, but the information available is quite limited, extremely complex or made up by dream sellers.

At the beginning of 2018 we set ourselves on the mission to develop a beautiful hand-drawn trading course that finally gave beginners a fair chance to make their own choices and to not be taken advantage by financial predators.

Trading is a difficult profession which requires hard work and dedication, not an easy way to make money. Our course will not only teach you the basics of trading, but also a way to see things in life as a business person. The only thing we hope is for you ... See full profile

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1. Lesson 1 - Introduction to Trading: Hey, guys, welcome to the training bible dot com beginners trading course. We hope that you make the best out of it and that you have a lot of fun, and by the end of the course, you've gained a lot of knowledge. So let's get started. This guy you see right here, that's me. Let me introduce myself. I'm Stephanie. I'm half Greek, half Italian. I was born in Venezuela, so actually, my native tongue, it's Spanish. Apologies in advance is my English is not 100% perfect, but we'll make the best out of it. And I've had the opportunity to work for a lot of CFB brokers. See, that's quite a controversial subject because a lot of people want to understand about this industry how to make money, and they don't know what to believe. What's going on outside and the beauty of it is, have had the chance to see it from the inside of being on the other side of the equation. In the brokers side and everything you can imagine, I've seen already people making trying to £2000 in one day people losing £200,000 in what they people profiting in short time frames in a long time frames people losing an extremely short time frames and in the end, everything you can imagine we have already seen. And why's this important? Because this one you see right here after some period of time became my face. And I'm gonna explain to you why I was horrified out of the amount of misinformation and abuse that was going on around. See, there's people all the time in Facebook in instagram, Twitter, anywhere selling signals, secret profit signals and the Promise X amount of peeps for a week or secret methods. And they tell you I developed the stock options trading course that is gonna make you billionaire and all of this is just not true. OK, how do I know it will have been on the broker side? Okay, there's very little we cannot know by now, and I want you to think logically for one second and understand something. If somebody creates a secret stock option trading method guaranteed to make millions of dollars, the last person he needs to sell it is to an online student looking to pay $200. If you have a secret trading method. You don't need $200 from students online. Unless, of course, your method. It's useless, and you want to make money out of selling that method online. So out of this big problem owns not also not also the secret signal sellers from the methods. No, it's them the broker. So there's a lot of brokers taking advantage of people, and we will go through that deeply and lesson number for the worry. But all of these things happening gave birth to this idea, said Okay, great. Look, I know the truth. I know what people need to learn. So why don't we compile and create a beautiful, beautiful course that gives you all the knowledge that you really need to use as a solid, a solid starting point? Because you need to understand how things work. You need to be able to come to conclusions by doing a logical reasoning and analysis. You don't need any secret methods and fairy tales because they don't exist. And all of that combined gave birth to the training bible dot com beginner's course. And our mission is simple one. No fake promises, and it's just to give you a fair chance. That's it. So what will you learn during the course? Number one? We're gonna talk about introduction to trading all the basics. Assets exchanges. What? It's a derivative. What? Its analysis. That analysis approach is very simple. Just to get you started because I'm not sure. On what level of knowledge are you coming? This course is designed for beginners, But maybe you have never even read anything about trading. Or maybe you have read a little. So with this one, we set everything straight. Then lesson number two is gonna be about introduction to charts. We're gonna be talking about the history of Charles. Where do they originate from the data table. Why do we actually need Japanese candlesticks? And it's just not a fashion. There is a really good point behind it. And the trend? How? Despite a trend and all of that, then lesson number three, and perhaps one of the most importance in the whole course. And my favorite, it's we're gonna talk about introduction to economics, specifically supply and demand. We're gonna cover it very well. And then so macroeconomic indicators such as interest rates, a gross domestic product, the balance of trade But here's the thing. The supply and demand part is gonna be the most important one. Because this is how price determination happens. And all the time is getting eating altered by external events, which we, for example, one of them can be a shift in the supply curve because of a natural disaster. Or it can be manipulated by people with large amounts of money. And how did this manipulation happen? Well, what? You will learn the lesson Number three when you connected what you will learn a lesson number 567 is gonna make sense. And you're gonna understand. Then how is it happening? How to spot it and it won't make sense to you then. Lesson number four. We're gonna be talking about brokers and trading platforms extremely important and white. You need to understand how brokers work. How do they really make their money? Some brokers make money just from commissions. Other brokers make money by taking people's losses. And actually, that is not wrong. It's just you have to think of it like a casino. We don't just in the casino owner for running a business based on people losing money. It's OK, but The only problem happens is when the broker is actually getting you to lose money. And that can be avoided because in the same way, there is brokers. Most of the brokers of the CF the brokers profit from losses. There's brokers that do it to do this in an ethical way. They just don't don't alter the games that people do whatever they're gonna do. And a lot of people are profitable. A lot of people lose. It's up to them. And then that is broken. Of course we want to put out the way. Call it in Venezuela the hairy, hairy hand in the game, and I'm gonna teach you how to spot this. Understand? What is going on was the regulation how to how to search for this regulation and to stay protected. And also, we're gonna be talking about the trading platforms, the buttons, the sell orders, thereby orders and all the stuff you need to understand to successfully operate a trading platform and the different types of them. Then lesson number five, we're gonna be talking about shares, basics, the common misconceptions. You know, if I own a share, can I take and I take a table from the company just because I'm a shareholder? No, you cannot. But it will explain what the earnings report. The impact on price is what drives them and all of that. Then we're gonna be talking about forex, the foreign exchange market. What moves the prices, how to trade it, the papers, the calculations, all the basics. Then in this is the footsie 100 NASDAQ. We're gonna cover some in. This is the most important ones. What is your composition and how are they calculated? That's one of my favorite parts understanding. You wanna learn how to actually how to do them? The Dow divisor created by Charles Darwin Nedra Jones from the Dow Jones Index gonna learn how to calculate this number manually, just like the Wall Street Journal has been doing for a long time to keep tracking continuity off the index. Then lesson number eight. We're gonna be talking about commodities, what moves the prices and this when you're gonna start thinking like a trader finally gonna learn how to spot opportunities everywhere, for example, a natural disaster. How can you say the natural disaster and then we're going to go for lesson number nine Cryptocurrency, what is the Blockchain? How does it works? What? It's a wall that I really trade in Bitcoin on my trading a Bitcoin or a CFT of Bitcoin and doesn't have any really any real value at all crypto, I'm gonna also share my personal viewpoints on this. I'm dying to do it right now, if I could, but we need to leave it to lessen nine, then lesson number 10. We're gonna be talking about financial derivatives. Okay, look, financial derivatives are pretty much everything. That's the funniest part. Supposedly, there are complex products, but in the end, those are the ones that are more more exposed to retail investors. You know, it's it's so fun if you ask a normal person out there that probably told you that has traded somehow. The most probable thing is that they traded the financial derivative with or without knowing it, and they're actually quite cool, but they are complex when we don't understand them and they have great uses. You're gonna learn everything about them. For example, options futures. See if these contracts for difference, then lesson number 11 is gonna be about technical analysis. We're gonna explore the logic, the principles. Is it really worth it? Right. You just drawing down money in the toilet and the most common use indicators such as a maxi the arse, I the simple moving average. And we gonna understand how how are they composed? And what are they usually telling us? And then last but not least, we're gonna combine using older knowledge We have learned during the whole course, and we're gonna have a final lesson lesson number 12 or we're going to discuss trading approaches, rescue management, calculating our costs and the 100 philosophy, like I like to call it. Okay, It's old. Based on common sense, logic and reason. There is no secret here. Once you're there in older knowledge, then you're gonna take all this pieces of knowledge, join them together in your head and use them to make decisions no more than that. So during the course you can undergo during the course, you can undergo a transformation process. So see, the most likely thing that is happening is this one. You arrive as one of these three guys, number one. You're lucky you're profiting. You're excited. You're I say, shiny and ready, like our money and number two. You're sad. You lost money. You're like, Oh, God. You know, like I just can't find a way or number three. You're a beginner with zero expedience, your completely blindfolded and new to this. You have never read anything, and you're excited about it. And you want to learn. Great. What's gonna happen with use this during the course? First, we're gonna make you become this guy. This guy right here is aware. Why is he aware? Well, now he understand what is what he's doing, how the prices move and everything that is happening around him, that it's just not a pink world. And there is no fake promises. The reality behind it that's gonna happen around lesson number 56 By the time you reach there, you're gonna be this guy right here, okay? And then, by the time you reach lesson 11 you're gonna become this guy right here, a business thinker. Now you're going to see trading opportunities everywhere. You don't care what you're seeing. You know that there is a trading opportunity to be found, whether it's something good or something bad happening. And then by the time you complete the course and you complete lesson 12. You're gonna become my favorite character of the trading bible dot com. Mr. Gordon, Why? Because you'll have lost your feelings, your souls, and you have become a full trader in all your capacities. Great. So let's talk about the requirements of the course, and I'm gonna go through this very quickly. But it's important. It's not gonna be just a trading course. I'm also going to share ah lot off our philosophy the way we see life, the business thinking also the good thinking and this list right here, and it's very important. Look, you need to have an open mind, okay? Walking in somewhere with prejudices, whether it is that you can any type of prejudices never get okay, that's very important. Stay open and never accept the truth. Okay, judge, discuss it and stay open to changing the way you think. Then patients businesses never done in a hurry. And when it's done in a hurry, something goes wrong. So take your time. Trading is not the way to make easy money. It's not at all if you come here expecting to make money quickly, then it's not for you and you're likely to lose even more then. Willpower. Even if you're feeling tired, Lacey, Whatever it is you're doing, you gotta work. That's it you got. You gotta study. You gotta check your news. You gotta check your trading platform. It doesn't matter what's happening around the world or in your life. You got to do this. Otherwise you lose the edge, then perseverance. Look. Quitters and winners. Think about the Kentucky Fried Chicken guy. If you quit, you'll never see the results. You got to stay on this at least six months. One year, maybe even more. Regardless, if you're performing good or not, to actually see some results and in order to do that and not be broke, that's when you learn risk management and trading psychology and not to trade when you are tilted. And all these things that will keep you in the game for the long run in less than 12 people understand it then. Last but not least, a notebook. Why do I recommend this? Look, you have the course yet just it's not good just to watch videos. And that says it down like board. Okay, let me wait till he finishes this lesson. no is great if you take notes of everything you see and you put it on the discussion and you Google whatever you want to Google and you go back and forth because when you're doing that know, Ledge tends to stick much more in our heads and one off are approved brokers or your own. So here's the thing. If you're in you be if you have no experience or even if you have some experience. Okay, scenes. Unless you have a real connection inside to see if the industry is likely, you don't understand completely. How does this brokers work? How to spot a good one from a bad one. So we've taken care of that part for you in our website to trading bible dot com. We have already set up the Review Center to explain you how brokers make money and how they don't make money and how to find a good broker from a bad broker. And the best thing you can do is choose from one of ours. Now, if you have already yours and you want to stick to it, that's completely fine by us. It's not a requirement to find one of the ones we provide. But if you do it, it can be better for you. And by the time you reach lesson for it will make sense much more for you and you'll be able to choose your own broker regardless of what we say or whatever you see, great, So let's get started. 2. What is Trading?: Let's get started with lesson one. So the first concept winning two started its trading. You gotta understand. What is it? So basic definition would be exchanging one item for another. Which means give me this. I'll give you that right. It always existed from the times of barter all the way up to today trading. It's not just that. Something like I want you to get a concept in your head. It's not just something done for fun, for money. And that's it. No, There has to be a purpose behind trading right? We do. We don't We don't just trade because we have to trade. No, there is a reason behind this. Why? Maybe this guy right here has extra oil. He doesn't needs it. And maybe this guy right here has extra corn. He doesn't needs it. But maybe this guy and it's the corn. Maybe this guy needs the oil to produce something, right? So if you were studying, what each one of these guys is doing, for example, was the name of this guy's business super oil dot com. Right now I'm making up something right now, and we understand that every time of the year. He's selling a structure in product that is based on oil, and we understand that he has a need for it. And we know who he is buying from and why. Then we understand what can be moving the price of oil, but it's by understanding the transaction behind it. We will get more, go deeper into this later on. But this is just to give you the night. That idea, like I've noticed a lot of people after 1000 conversations on the phone of hat would clients that they believe that trading is just done. Forefoot like Imagine the charge there 200 numbers of finals. That stuff no, like that's not the important part. The important part is, why is it trading getting done? So now we understand we're talking about exchanging one item for the other, okay, and people do it usually to buy or sell goods, which is the real reason with Valley with purpose behind it and to generate profits, which is a speculative part. Great. So let's talk about training vs investing because this is where I see one of the greatest mistakes. Look, they are not the same thing. Okay? Trading involves frequent buying and selling speculating, which means I don't care what I'm buying or selling or like carries to profit from the transaction. It is done on shorter time frames, and it carries much more risk. That's the first thing we need to understand. Why will think about it. It's much more likely if you're executing 100 transactions and trading per day 100 orders that a lot of disorders can go wrong. There is a lot of volatility. You don't know what can happen in such a short time frame. Compared to investing right investing. We buy and hold something. We do it under the longtime friends and it's all about the real value under its less risk than makesem emphasis into these two points all about real value. Why, Let's say you know a friend that is developing an amazing app, right? His dream is to build a nap company. And then by the time he registers this company, he talks to you and tells you. Okay, body, I need some money. And when I opened this company, you know, and you're like, OK, perfect. I'm gonna be one of your shareholders. There you go. Here you have $50,000 to open your company and let's be partners and you register this and you bought some shares. But straight from the moment the company's starting right, this is a very small scale to picture how it works. But at that point you're becoming an investor, and it's not like you can go and do that. And then the next day, after, release the stairs off your friend and sell it to somebody else. No, that's not the optic of the investor. You expect to put that money in those shares toe own a percentage of the profits off. Or maybe have some voting power over the company of your friend. And over the course of years, you expect this company to do good and to be worth it in the same way. Like if you were buying a house, right? You expect in this house to increasing value over a certain period of time. It has nothing to do compared to trading trading. We do it on short time frames. Investing is done under the different optic, with more value in mind or longer time frames and with less risk compared to trading and understanding this to this crucial because all the time I've heared even brokers telling to people, Sir, how much are you willing to invest? Invest? Every time I hear this word, they just want to kill myself. It has nothing to do. What? What we're doing when we're trading and understanding, This is a key to getting started because now at least you know what you're doing. 3. What am I Trading?: assets. What are they? A resource with economical value? Right. So what am I trying to say by this? It can be anything that has Economical Valley. For example. You can be the owner of a company, and you can be speaking about one of your employees and you can call John. It's called this employee John. He's a great asset to this company, right? It can be £200 of gold that you can have at home can be your car, your car. It's also a research with economical value, right? You can say it is one of my company's assets, but in trading, which is where we care also in investing this concepts are general for defining financial investments. World it's can be money can be shares. Metals can be pretty much anything that you can treat right, And it's very important to understand this because it answers the question about water. We trade okay. And yet, let me explain something later around, you're gonna understand that even though you think you're trading this assets, most likely you are not, and you're gonna understand why. So let's talk about the types of assets. No, these are the most common number one currencies the forex market, which even if you think you've traded them, you probably haven't. You will understand why, Because you are speculating on them. You're actually never getting a hold of the currency, you know, when have you really trade it for its? If you took a plane, you took a trip to a country with a different currency, for example, that say you went to Turkey and to Istanbul and you change dollars for the Turkish leader. Then you actually perform a forex transaction. The real deal. But what you're doing in a trading platform is not at all that. And I will explain to you why later then in this is another type of acid. What are they? A basket of stocks? Just a bunch of companies together grouped by some characteristics, then stocks or shares right, little pieces off ownership on a company. Later on, we will explain because remember, not just because you own a share doesn't means you get to take the TV's and the computers inside the company. There's some rule for this shares then commodities right raw materials or primary agricultural products using the production of something else So, for example, oil we used in the production of gas for the car. Great soil said commodity gold is used in jewelries Eustis. A store of value itself is using electron ICS. Right. So commodities, usually they're split into several categories. We will see it Indefinite lesson specifically designed for commodities. But the most important thing is that they tend to be extremely necessary things. Okay, then financial contract derivatives. This is an asset. Okay? They are an asset themselves. Look, an option or a future can be based on the price off the commodity and the price of this corn. But also we treated as an independent asset so we can actually separate them and understand what it is we're doing. Don't worry. We'll go deep into it and a little bit then Cryptocurrency also an asset. What is it? In a simple way, virtual money. It doesn't exist physically, is not operated by somebody. It tries to run on the network by everybody. Put in an effort all together. And that's how it stays over there. Well, look at it better after. So the financial instruments, right. These derivatives, what are they? Let's do it together. So monetary contracts between parties, right, They can be traded, created, modified, and they're known as financial derivatives. Great. This concepts we understand, but what did I just say? Look, this is the asset. This my share. Then somebody's gonna say, OK, I'm gonna make a paper based on the price of that share that will give me the right to do something. It can be. Sell it. It can be buying to compete and, I don't know, destroy that can be print copies. Doesn't matter. I'm just making up stuff right now. The point is that this paper has no value by itself unless they first acid here exists. Okay. And most of the time, what were trading is financial derivatives. Just think about it. If you're creating, it's like a coupon, right? That coupon that gives you the right to do something. So think about it. What is better for you to go ahead and trade 100 barrels of oil? No, transport them, get a cargo truck, be able to move them, or to just go ahead and write up a paper that has the value of this 100 barrels of oil and then we decide how we're gonna move them or not makes sense, right? Right. So what are the most common financial derivatives now? We only care about the 1st 3 The other two is just to let you know they exist. But these are the most important for you on option gives you the possibility of buying something at a fixed price. Later possibility. You're not obliged to do it so I can get get an option to buy one snicker chocolate in one month and not necessarily means that I need to go ahead and buy it because I bought the option. No, I have the option to do it. Then a future. It gives you the obligation to buy something later on in the future, which means you bought the future. You must execute the dance action specified in the future and then the c f t. The contact for difference. It gives you the ability to trade price differences just like the name says. You know, if you open a see if theon apple at 50 and apple goes to 55 then what you're going for here is this 50 to 55 this $5 difference in the price later on in the derivative lesson, we will expand deep deeper into what is the CFT? How to use it out as it works. But it's just to give you the idea off. What does it means, right? And then forwards and swaps other types of derivatives that are used buy more professional investors and are not available to the public easily. And they're not traded on the trading platforms that you're gonna be exploring all the time . No there, not so common for us. Remember, this one's here are the most common for us. You're going to see them in old, the brokers, and you're gonna be exposed to them all the time, especially world the C F T. One of the most important things you need to remember treated as something independently. When you see your platform by oil, it doesn't means you're buying all you can be buying a CFB on oil. You can be buying a future on oil, or you can be buying an option on oil. Great 4. Where am I usually Trading?: So the answer to the question, Where are my trading? The exchange. What is an exchange marketplace where assets and financial instruments are traded, Right, So everyone goes there, meets up buys and sells simple to understand. No. Perfect. So let's talk about this. Exchange is an exchange. Can be a physical place in Elektronik platform or both. Okay, The new your stock exchange, for example, has there have their own building the NASDAQ as their own building and they also operate electronically, right? But then you have exchanges that are just online. Let's say Cryptocurrency exchanges like this, famous by Nance preload Next, whatever. And they just existent as a platform, right? So you can logon online and do your trade. So it's their very different from each other. But remember one thing Not always. We are training on the exchange. Regardless, if you think you are trading here, you're likely not. And I want I'm gonna explain to you what? Look, First for shares to be listed on exchanges as an example, they have requirements, right? So think about it one second if I just went ahead. I'm Stefan. I'm going to open a company, right. I go to the register and register my company. And then I say, like, Oh, great, you know, I have a company. What this does it doesn't even matter. Maybe it's a fake company, and then I go to the exchange I posted there and people start buying my shares, you know, because I'm making a bunch of fake promises off how this company is gonna perform, and then I just take all the money and disappear. And that stock fraud, fraud, right, well, that there are requirements for shares to even go on the exchange in the first place, such as the capital amount right there. Maybe they have $50 billion in capital. Okay, we accept you may be the sheriff has also specific value, and your shared needs to cost more than $200. If you have a $1 share, maybe we don't want it has to be regularly audited, Which means some international company that's dedicated to Disney's to go all the time and oversee the book, see what they're doing. If the, you know, check the company and then a certain threshold in revenue, maybe we want only companies that make $10 million every quarter. Otherwise, we don't want you here. And this prevents, of course, that any crappy little little business you know that could be fraudulent goes into an exchange and becomes a traded company. Because those are technically, they end up being this old penny stocks that you saw from the wolf of Wall Street. They were just shares. They were so small that they didn't even trench trade officially in the exchange, and people were just buying and selling them with fake promises. And in the end, it was like, I don't know, like a small tent in the woods. They didn't even have an office, that company. And then people were buying and selling, thinking there's gonna be a $1,000,000 company and it was all just lies. So that's why we have requirements for shares to be listed on the exchange. And there's not just requirement for shares that commit requirements for commodities for everything. You will see each one of them during the later lessons. So now that we understand that we have exchanges where people are meeting to buy and sell all the time, yeah, there's a centralized place where all the investors gathered together to trade specific shares. We need to understand something else regardless of where you live. Probably there is a stock exchange, an onerous famous stock exchanges all over the world. Okay, so in this case, let's talk about the New York Stock Exchange or the NASDAQ Exchange in the United States, or you have the ASX Australian Securities Exchange. Right then you have the U Hanners book stock exchange. So if you look slowly, you'll find them everywhere in the world. You have a stock exchange open and operating at certain time, okay? And that the shares of that country are being traded there. So think about it. If you're an investor, you live in the United States and you want to trade shares on the London Stock Exchange, the one we have highlighted right now. This means you need to know what time is the London Stock Exchange open? What time do they close and what are the shares that are being listed on that exchange? And as I was telling you in the beginning of the course, all of this information is publicly available. You can just enter into Google shares of the London Stock Exchange, or top 100 shares of the London Stock Exchange, and you'll end up finding everything you want to know about each specific exchange, and you need to understand that each one of them operates under a specific time frame. So this means that you're not gonna find open at the same time all the exchanges in the world. Never it's not. You're not gonna find the the Japan Exchange Group or on the London Stock Exchange and the New York Stock Exchange exactly at the same time, because every country has their own time zone, right? So in the end, there's always eventually except on the weekends where there's a bunch of them close. But in the end, all the time there's someone open operating, but not all of them at the same time and understanding what times are they open makes us see, for example, that investors are pulling hard when this exchange is just open, and then they switched to the other one. After this one is close because they want to trade on the other one, and that each country has their own assets. That is training on each exchange. OK, great. So let's talk about O T. C. Okay, I know it sounds dodgy, but it's not. Look, OTC is over the counter trading don off exchange, and I know I'm saying it doesn't sounds dodgy. Well, it sounds that you, but it's not. It's to explain to you why. Look, if you and I, right now, gather together, right? And we say, Great, We're gonna do some trading. No, exceed just you and me. We we have our paper shares in front of each other way. Have the bank accounts open toe wire. Technically, that's doing an OTC transaction. Okay, but the thing is that this old dissident section and they're not happening like this is not just you on a friend. It's a little bit more complex than that. All these brokers that we're constantly seeing online. The CFB brokers are OTC brokers. Why? Because see if these are not exactly who have the lead regulated, standardized products there customizable, we're gonna explore. That's one. Once we look at this difference is right here we have in front of us. But just let me make this clear. What I'm trying to say is that all these products that you're trading in the CFT brokers don't need to be exactly off the same way the brokers can customize them, and they are not traded on an exchange. So this means you are trading them internally on your broker, so there can be 20 brokers and they can be quote in different prices, regardless, if they're talking about the euro dollar, they were gonna try to match up right, But they can be. They could be 20 different prices because they're not obliged. It doesn't work that way. They can quote whatever price they want because it's an OTC transaction. It's an internal contact they have in their system. Is not something out there publicly traded on an exchange? So the differences between exchange and OTC let's explore the exchanges. We discuss mandatory rules, right, so the product needs to be with certain specific stations or needs to be traded asserting our standard products. For example, if you're trading on a commodities exchange, oil or gold, each contract needs to be off 100 ounces of gold. Okay, higher availability off course. The big players, the governments, institutions are all trading there so that that's where you find the money, then more transparency off course. If it has more rules, task, standard products and all of that. This means that it's gonna be much more transparent. Right then, determines have maintains the market price is very important for us. So in this place where the big money is getting played around and there's people buying and selling, it's where the price determination it's happening. Okay and old everyone out there, the CFB providers of brokers are quoting. Prices are trying to mirror the prices that are happening in the exchange because the exchanges one responsible for this prices. And last we say centralized structure for a reason, because it's just one place is the exchange is being traded there and that's it, period. There's not like 20 different places where you find the same asset under 20 different prices. No, usually is the exchange the price, and that's it is being traded there now, on the other hand, the OTC, the CFB broker, for example, or other derivatives which we don't care. But it's nice to know the forwards and all these customized products have no mandatory rules, right? We can do them, however, we want them where nobody's telling us how to do it customizable, they can have different sizes. Why do you think you see when you're trading gold on your CFB broker And they tell you you can take Cedar Point Want contracts of gold is because trading a CFB you're not trading gold. If you go to the the commodity the biggest commodities exchanges in the world and you tell them I want to buy Cedar Point want contracts of gold? They're gonna tell you goodbye. You're poor and that's it because it doesn't work like that. Then there is less liquidity, which means less availability. Why imagine in one place we have the big players playing right in the other place. It's a noticed A transaction. It can be a broker. Maybe it has. I don't know, 1000 people training against each other. And in the end, there's not much money there, right? So it's less liquid, less hostile s availability, then less transparency. Important one. Think about this. If the exchanges transparent, it's public and it releases all the information. This means they disclose the orders, right? How many people are buying are selling how much money is going up and down in the OTC broker? They're not meant to disclose it right. They don't care about how many people they don't care for you to know this. It's their problem. They are quoting their own prices and that's it. No, The difference. Okay, One of the most important ones. Okay, it's decentralized. As we told you, it has a bunch of different structures everywhere. Everyone is quote in the room price, but I want to make emphasis on this one on lower fees. The reason that it's much more cheaper to trade on a CFT broker is because, since it's a customizable product is OTC that is less volume, less size of the trades that you can execute the end. They can quote much, much lower fees. And when you're paying when you're opening a trade, you don't need to pay ex commission for opening a massive contract with you opening a small trade, let's say 0.1 context of gold. The commission you're gonna pay on that is gonna be much, much smaller, then the commissioning opening a trade off 100 ounces of gold, which, if Goldwasser $1500 announce it can be a $150,000 operation. So in the end the commission tends to be much, much slower. So remember, you're not trading. It's likely it's the most probable thing to be happened in most of the situations. You're not trading on an exchange, their trading on an OTC broker, which can be a CFT provider. And how did they do this? Well, they're quoting the prices that are in the exchange. OK, so you technically, what you're doing is trading a mirror off the exchange. 5. Who gives me access to Trade?: dah mighty broker. Let's clarify some concepts before we jump into lesson number four, which is when you're going to see and understand fully how brokers work their business model there types and good ones from bad ones. Financial regulations and all of that. But for now, just a quick one to be on the same page together. So broker a person or firm that executes financial transactions for others. Right? And if this guy right here is you and this one is the new your stock exchange, then there is some guy in the middle and we call him the Broker. It can be a person or a firm. Now, bear in mind one thing. The broker is just a middleman. He's never choosing what you're gonna trade. He's just the middle man. Very important to remember this. And later on, you'll see why. How it works. It works with the brokers. So look, option one. A broker does it on your behalf, right? What do I mean by this? So, you know, a license professional that it's a broker. You call him, Tell him by me 20 apple stocks at this price, and he executes a transaction for you. Okay, then affirm dusted on your behalf. Then we're talking about a big firm and investment from you. Tell them. Okay, look, buy me this That are creating a portfolio with deceptions, you know, And I'm gonna choose if I want to do this or not. Right? So still, you always have the choice. That's why we have the work on your behalf in in common in both points And point number three, you do it using a broker's services. This is the one we want. We want new to be the one who's always in charge of how you're gonna use your money When, how and why. Because that way you can attribute yourself the wings or the losses, which is much more pleasant than just wondering. Oh, my God. That this guy hired to handle my manager disappeared it all. What am I gonna do now? Know it's on you and you can make rational decisions. Okay? No. How did it make money? There's actually a lot of waste. This was just the basic ones. Commissions to open and close traits. You've heard about it? Probably school. The spread. One of them. The difference between the by and the cell prices. That's why you see always in every broker platform. You see that the buyer and the seller different, and it's called the spread or commissions in and out. When you're opening a tape in a specific market around the world, let's say you're going to United States and trying to buy a stock. Durst on brokers charge a commission to go in and a commission to go out of the trade. No, there's also maintenance fees. Some brokers charge a commission for having a position open during every night. Some brokers charge a commission for not using their account they several types of commission, and actually, they're quite open about. It is just a matter of knowing how to find them. But later on, we will explore the type of fees and commission that's broker can charge so we can include them always in our costs plan, because we need to plan before opening a trade. All this kind of things okay and last, there's others. There's other methods that brokers used to make money. Some brokers can act specifically. I'm talking about market makers. You'll see it later on and listen for some brokers can act like a casino. You know, they're making money out of trading losses, right, because they're betting on people losing. But they're not altering the game. They're not doing anything to make you lose. They're just hoping you lose. You know, statistically sometimes because people don't trained on, get prepared and educate themselves in trading the step. Statistics are under favor. That's why there is a lot of brokers and their profitable. But this brokers quite good. There's nothing wrong with this business model. When it goes wrong is when a broker is advising you to take wrong decisions to make sure that you lose. And that's exactly one of the things we want to prevent with the trading bible dot com. But don't worry. You'll see later under a lesson. For at least now we're clear on who's the broker. He's our middle men into the financial markets