Trading on the Stock Exchange: Understand who the trader is and how the market works

The Brazilian variable income universe is expanding, and more and more people are seeking to understand what trading means and how to profit from market fluctuations. Unlike the traditional investor who thinks in years, there is a central character in this scenario: the trader, professional or self-employed, who lives off short-term movements. But what is the real difference between these two approaches? And more importantly, how does someone start on this journey?

Trading: Quick Negotiation in Variable Income

When we talk about financial operations, it is essential to understand what trading means. The term comes from English and simply refers to negotiating. In the Brazilian context, trading encompasses transactions carried out over short horizons — minutes, hours, days, or weeks — on the stock exchange, forex, indices, and commodities. The logic is simple: buy at one price and sell higher, or sell and buy back cheaper, taking advantage of volatility.

Operations are conducted entirely online, through specialized platforms that allow for quick execution and full control over positions. Unlike fixed income, here results depend directly on how the market behaves — there is no guaranteed return.

The Trader: Who Is and What They Do

A trader is an active market negotiator. Their routine involves monitoring quotes, analyzing charts, evaluating economic scenarios, and making quick decisions when opportunities arise. Success depends on three pillars: technical or fundamental analysis, precise timing of entry and exit, and strict risk management.

The difference between trader and investor is clear in practice. While the investor holds positions for months or years, betting on the long-term growth of a company, the trader reacts to daily movements. The investor seeks solid fundamentals; the trader seeks volatility. One combines patience with fundamental analysis; the other combines agility with technical analysis.

Many market participants adopt both strategies simultaneously — occasional short-term operations for immediate gains and long-term positions to build wealth.

Different Trader Profiles

There is no single type of trader. The market accommodates various profiles:

Institutional Trader: Operates in large banks, investment funds, and insurance companies, handling high volumes with advanced tools and in-depth analysis.

Broker or Execution Trader: A professional who executes buy and sell orders according to instructions, without deciding the strategy, but ensuring operational accuracy.

Sales Trader: Combines order execution with consulting, offering ideas and strategic analysis to clients.

Self-Employed Trader: Operates with own capital, assumes all risks, and makes independent decisions. They can be beginners or experienced.

Operating Styles: Time Defines the Strategy

The duration of the operation is the main difference between trading styles. Each requires different skills:

Day Trading involves opening and closing positions within the same day. Operations last minutes or hours, requiring high concentration and full market monitoring. The risk level is high, as is the emotional demand.

Scalping operates over extremely short timeframes — seconds to a few minutes — seeking small repeated gains. It demands speed, precision, and strict risk control. It generates many trades per day and high operational costs.

Swing Trading maintains positions from one day to several weeks, capturing broader movements. It offers less psychological pressure than day trading and is suitable for beginners and intermediates, with moderate volatility.

Position Trading operates on a larger scale — weeks, months, or even years — more akin to medium-term strategies, but still within variable income.

High Frequency Trading (HFT) uses algorithms and robots to execute operations in fractions of a second, generally inaccessible to individual traders.

The choice of style depends on availability of time, risk tolerance, capital, and psychological profile. Day traders need to be emotionally prepared; swing traders need patience; scalpers need quick reflexes.

The Path to Starting in Trading

Anyone can become a trader, but the journey requires structured preparation:

First: Understand your risk profile through suitability tests. Not everyone is psychologically prepared for the fluctuations of variable income.

Second: Invest in education. Courses, books, and specialized content build a solid foundation on markets, technical analysis, and risk management.

Third: Choose a style that matches your reality. Don’t try to be a day trader if you don’t have time to monitor the market fully.

Fourth: Set clear goals and limits. Establish stop loss (loss limit) and take profit (profit limit) before each trade.

Fifth: Select a reliable platform. Speed, stability, and analysis tools are non-negotiable for professional execution.

Sixth: Start with a demo account. Test your strategy without real money until you fully master the platform’s operation.

How the Trader Makes Money

Profit comes from the difference between the entry price and the exit price. Imagine a trader who identifies a support level in a stock — a level where the price historically reacts. When detecting signs of buying strength, they buy at R$ 20.00. Hours later, as the market rises, the price reaches R$ 21.00 (predefined target) and they close, realizing a profit. The same works in reverse: selling in a downtrend and buying back cheaper.

The secret is not to win every trade but to control losses while keeping gains larger than losses. Consistency comes from operational discipline and risk management, not optimism or intuition.

Pillars of a Successful Trader

Being a consistent trader requires continuous education, operational discipline, sharp emotional control, rigorous risk management, and constant market monitoring. Results come with time, practice, and learning — never with promises of quick gains.

The first real step is to choose a regulated broker suitable for your profile, test features in a demo account, and calmly define your strategy. Trading is not gambling; it’s negotiation based on analysis, structure, and discipline.