Trading is the process of exchanging one asset for another at an agreed price. In practice, that usually means swapping cash for a stock, crypto coin, or currency pair—and later reversing the process to lock in profit or loss. What looks like a simple “buy” or “sell” button is actually a stream of orders hitting an order book where thousands of other traders are doing the same thing.
Before strategies or indicators matter, it’s essential to understand how a single trade is created on an exchange. Orders are routed, matched, and executed according to rules that don’t care about your opinion, only about price and size. To see how market, limit, and stop orders travel through that system, walk through How Orders Work.
Every trade starts with two competing numbers: the bid and the ask. The bid is what buyers are willing to pay right now; the ask is what sellers demand. The gap between them—the spread—is a built-in toll you pay to interact with the market. If you hit the buy button with a market order, you pay the ask, not the last traded price. To see how these two prices shape your fills and hidden costs, visit Bid vs Ask and Understanding the Spread.
Once orders start interacting with the order book, price ticks up or down as levels of supply and demand are eaten away. A cluster of aggressive market buys lifts the ask and walks price upward; a wave of aggressive sells hits the bid and drives price down. What you see as individual candles on a chart is just the visual summary of all that order flow, spread behavior, and shifting interest.
When you zoom out, trading stops looking like random noise and starts looking like a mechanical process: orders meet at the bid and ask, spreads widen or tighten, liquidity appears and disappears, and price redraws the story in real time. For a bigger-picture walkthrough of how these forces combine into actual price movement, read Basic Concepts of Price Movement.
The more clearly you understand these mechanics, the easier it becomes to judge whether a move is driven by real participation or thin liquidity, whether you’re paying too much in spread, and whether your expectations match what the market can realistically give you.