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 |