Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 1: Principles of financial trading
Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 2: Principles of Financial Planning and Cash Flow in Financial Trading
Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 3: Understanding financial trading techniques


They are generally classed as investors because they look for profit through carefully selecting products that have growth potential and or they deem currently undervalued. Investors therefore like value for money and they generally are not investing to make a quick buck. Investors will always be interested in the future success of a product or company they have purchased. Investors will use tools such as earnings, cash reserves, EPS, P/E or PEG ratio’s for example.

Investors will make these calculations by way of looking at the company’s financial statements or industry changes/trends that could influence future growth. In essence investors will want to calculate current value versus the potential of its future growth. Investors do not generally sit in front of trading machines and concern themselves with day to day value.


Investors come in many guises but the main ones are as follows:

Mutual Funds

These are instruments where individuals keep their money tied into a fund. These types of funds generally make long term investments into companies that fit within their investment strategy. They must act as investors on behalf of the individuals that have deposited their money into a mutual fund.

Investment Banks

Banks will often help companies when they decide that they want to be publicly listed in stock exchanges and you’ll often here it being called an Initial Public Offering (IPO). Most Investment banks provide the service for companies to go public but they also retain and hold a portion of security of that company over the long term.

Retail Investors

These are individuals who will invest their own money using personal accounts rather than relying on others to do it for them. The costs of manging your own money is far cheaper than paying a percentage fee for the privilege of someone else doing it for you. Managing your own investments is of course a risk and it does not suit everyone but retail investors are becoming more popular mainly because social policy is driving people to take control of their own money or their pensions, or investments.

Institutional Investors

Large organisations that hold much bigger stakes in companies than your average investor. They tend to specialise in investments with more unique strategies than any other type of investor.

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