Financial Markets and Trading: An Introduction to Market Microstructure and Trading Strategies

Financial markets are platforms where buyers and sellers trade assets like stocks, bonds, or currencies. Market microstructure studies how these trades happen, focusing on the processes and rules that influence price formation and liquidity. Trading strategies are methods investors use to buy and sell assets with goals like maximizing profits or managing risks. Understanding market microstructure helps traders navigate factors like bid-ask spreads, order types, and market behavior, leading to more informed decisions in executing trades efficiently.