Capital refers to the financial resources or assets that a business or individual has available for investing or expanding. It can include money, property, and other assets. In order to engage in trading, or the buying and selling of goods and services, capital is often necessary. This is because trading typically involves the exchange of money for goods or services, and having capital available allows individuals or businesses to make these exchanges. Without sufficient capital, it may be difficult or impossible to engage in trading activities. Capital is therefore a crucial condition for trading, as it enables individuals and businesses to participate in economic exchanges and potentially generate profits.

Capital is a fundamental condition for trading because it represents the financial resources required to enter and sustain positions in the market. Whether trading stocks, forex, commodities, or other financial instruments, traders need capital to:

1. Execute Trades: Capital is used to buy and sell assets, enabling participation in the market.

2. Manage Risk: Having adequate capital allows traders to absorb potential losses and maintain flexibility, without being forced to close positions prematurely.

3. Leverage: Sufficient capital provides access to margin or leverage, allowing traders to control larger positions than they could with their funds alone.

4. Grow Accounts: Profits are earned on the capital invested, meaning more capital typically leads to greater earning potential. Proper capital management is crucial for long-term success in trading.