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An Introduction to Trading in the Financial Markets: Trading, Markets, Instruments, and Processes by R. Tee Williams

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Introduction

We begin the process of exploring the trading markets by distinguishing between trading and investing. It may seem as though we are comparing dissimilar things. After all, we think of investing as a long-term process in which we put disposable funds to work in the hope of earning a return as the assets we invest in grow in value or pay income. By contrast, trading is the activity required to put investment strategies into practice during which investment assets are added to a portfolio—a purchase—or removed from a portfolio—a sale. However, there are investment strategies that involve very active turnover in a portfolio, and there are trading strategies in which the trader plans to profit from the trades. As investment time horizons ...

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