Trading on the financial markets requires the mastery of many subjects from strategies and the instruments being traded to market structures and the mechanisms that drive executions this second of four volumes explores them all after brief explanations of the activities associated with buying and selling the book covers principals agents and the market venues in which they interact next come the instruments that they buy and sell how are they categorized and how do they act . Succeeding in the financial markets requires a mastery of many disciplines mastery begins with understanding the actors rules and dynamics and the ways in which they interact this volume the last of a 4 volume series presents a broad perspective on key subjects such as regulation and compliance risk and ways to mitigate it and the directions in which trading markets might evolve like . Trading is the process of implementing investment decisions and other types of financial asset purchases or sales whereas investment tends to focus on what to do trading is more directly concerned with how to do it an important impetus for trading is the portfolio management process specific decisions in the trading process are dominated by economics real or expected costs and benefits resulting from the trading choices made the impact of economics has always been an important . Introduction the first book of this series described the general characteristics of different traded instruments including their basic purpose and the cash flows during their life cycles in this book selection from an introduction to trading in the financial markets trading markets instruments and processes book. Introduction we begin the process of exploring the trading markets by distinguishing between trading and investing it may seem as though we are comparing dissimilar things after all we think of investing as a long term process in which we put disposable funds to work in the hope of earning a return as the assets we invest in grow in value or pay income by contrast trading is the activity required to put investment strategies into practice during which investment assets are added to a