Author: Charles Drummond
Charles Drummond (born 1936) is a Canadian trader and market technician. He is a securities trader, author, educator, speaker and technical analyst. He developed and popularized the “Point and Line” method of technical analysis, which is also called “P&L Charting” and Drummond Geometry. His methods are in use today among technical analysts and traders around the world. In recent years his work has also been noted by Forex Traders. Drummond is the author of nine books and a website.
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What is Trading?
Everybody is familiar with the term “trading”. Most of us have traded in our everyday life, although we may not even know that we have done so. Essentially, everything you buy in a store is trading money for the goods you want.
The principles of trading
The term “trading” simply means “exchanging one item for another”. We usually understand this to be the exchanging of goods for money or in other words, simply buying something.
When we talk about trading in the financial markets, it is the same principle. Think about someone who trades shares. What they are actually doing is buying shares (or a small part) of a company. If the value of those shares increases, then they make money by selling them again at a higher price. This is trading. You buy something for one price and sell it again for another — hopefully at a higher price, thus making a profit and vice versa.