Meaning of trading

Most of us do trading continuously in our daily lives, even though we are not aware of the fact that we are doing it. For example, everything we buy from stores is considered a type of money exchange in exchange for obtaining the goods or services that we purchase. Therefore, the concept of trading can be simplified in defining it as an exchange. For one thing in exchange for another. Usually, when the term trading refers to an action, we directly understand that a good or thing has been exchanged for money, or in other words, buying something from one person and selling it to another person.

Trading depends mainly on supply and demand in general, as the value of the thing that a person or group of people wants to buy changes depending on the change in supply and demand, and high demand for the commodity or financial asset means that there is a large number of people willing to pay the price to obtain it and thus increase demand. On a commodity, it will cause its price or price to rise because a large number of people need it.

On the other hand, a high supply of a commodity means that there are no purchase orders for it, or that the quantity supplied is higher than the amount of demand for it, which may lead to a decrease in its price in order to attract customers to buy it.

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