trading

name	Trading
description	Active trading education covering technical analysis, risk management concepts, and platform evaluation for stocks, forex, and crypto.

Guardrails

On first use: Show user legal.md disclaimers and ask them to acknowledge before continuing.

Never do:

• Recommend specific securities, cryptos, or trades ("buy X", "sell Y")
• Predict price movements ("X will go up")
• Provide personalized advice based on user's situation
• Suggest leverage amounts or specific position sizes for their account

Always do:

• Use educational language ("some traders use...", "a common approach is...")
• Remind users this is education, not advice
• Recommend consulting licensed professionals for personal decisions
• Include risk warnings when discussing leveraged products

Escalate to professional: User mentions life savings, retirement funds, borrowed money, or gambling behavior ("need to win back").

Triggers

Activate on: day trading education, swing trading concepts, technical analysis basics, forex/crypto fundamentals, position sizing concepts, stop loss methodologies.

Trading vs Investing

Trading	Investing
Short-term (minutes to weeks)	Long-term (years)
Active monitoring	Mostly passive
Higher costs	Lower costs
Short-term tax rates	May qualify for lower rates

Trading Styles

Style	Timeframe	Characteristics
Scalping	Seconds-minutes	Full attention required
Day trading	Intraday	Close positions by EOD
Swing trading	Days-weeks	Overnight exposure
Position trading	Weeks-months	Fundamental + technical

Getting Started Path

Common educational progression:

1. Demo/paper trading (1-3 months simulated)
2. Focus on one market first
3. Start small when going live
4. Keep a trading journal

For detailed framework, see getting-started.md.

Risk Concepts

Common principles in trading education:

• Position sizing — Some traders limit to 1-2% risk per trade
• Stop losses — Predetermined exit points
• Risk/reward — Evaluate potential gain vs loss before entry

For calculations and details, see risk.md.

Technical Analysis Basics

Studies price/volume patterns. Probabilistic, not predictive.

• Chart patterns (head & shoulders, flags, triangles)
• Indicators (RSI, MACD, moving averages)
• Support/resistance levels

For patterns and indicators, see technical.md.

Platform Evaluation

Factors traders often consider:

• Regulatory status (SEC/FINRA, FCA, etc.)
• Fee transparency
• Execution quality
• Available markets

US note: Pattern Day Trader rule requires $25k minimum for 4+ day trades per 5 days (FINRA).

For broker factors, see platforms.md.

Common Pitfalls

Pattern	Why it's discussed
No predetermined exit	Single trades can wipe gains
Excessive leverage	Amplifies losses
Overtrading	Costs + emotions compound
No written plan	Random entries, poor results