A trading account is the term used to describe virtually any type of account opened and kept at a brokerage firm. While the term trading account in the literal sense would indicate an account where buying and selling or “trading” was the primary focus, the term trading account could be used to describe an account with little or no activity

It is not unusual for people to segregate their assets into different accounts with different investment objectives and risk tolerances. In that case they may have a trading account; i.e. an account where their objective is to actively buy and sell securities, as well as other accounts where the objectives may be different, such as preservation of capital.

In the book, How to Keep From Going Broke With a Broker, I emphasize that the one of the keys to success with your brokerage account, be it a trading account or some other type of account, is to make sure that each account you have is being managed based on the objectives and risk tolerance for that account.

Want to learn more about opening and managing a trading account? Get your copy of How to Keep FromGoing Broke With a Broker today!