The function of trading in various markets on a macro scale is for what's called price discovery. Price discovery is the act of, well, discovering what prices a market will bear. The traders will test various price levels which force other traders and investors to show their hands and act/react accordingly. This provides liquidity, which basically means that traders are providing the movement necessary for other traders and investors to enter/exit the market at the prices they want. Without traders, the market does not know what prices will be accepted or rejected. If you own Apple stock and you want to sell it, how do you know what price you can sell it for? You look at the prices that traders have fought over and established.
It's for this reason I liken the trading/investing universe to a battlefield. On the front lines are the traders; the ones that will take the biggest gains/losses, relative to their positions, and find out where the enemy is, what their weaknesses are and what offense schemes to run. Battle lines are drawn in the sand so people on the bull side of the market (the buyers or people wanting price to go up) know where they stand and the bear side of the market (the sellers, or people that want price to go down) know where they stand and they do battle with one another. The traders are relentless and the line in the sand (the price of an instrument) changes constantly.
The investors then follow behind in the path the traders have made and establish their positions in a safer environment, though still not the safest of positions. Finally, bringing up the rear, are the hedgers who are investors that are trying to protect other trades/investments they have established. These are typically the safest positions because with a hedge the hedger is not looking for a profit but simply trying to protect a price they have established in a related instrument. Farmers are classic hedgers. They have a certain amount of crops they will deliver at harvest so they hedge their positions by locking in prices well before the harvest so they can deliver their crops at prices that will most likely bring them a higher price than the rest of the market will be able to get.
Personally, I trade because I love it. I'm fascinated by the movements in any given market and feel that I am part of a living, breathing organism. That may sound trippy, but I assure you that a market is indeed an organism that acts and reacts to stimuli, requires nourishment, shows signs of distress, joy, elation, depression; you name it a market will do it. If you were to sit with me for a week and watch price develop and see the way that prices react at areas of support and resistance you'd see what I'm talking about and understand that a market is indeed a living organism.
I started trading full-time this past summer after spending a year or more learning about trading, experimenting with various strategies and gathering the courage to do it full-time. It's not easy, folks; not at all. I completely underestimated the psychological/emotional aspect of trading, thinking it was more important to learn HOW to trade rather than learn how to manage emotions such as greed and fear. Anyone can learn HOW to trade but very few people can learn how to have an emotional detachment from trading and treat it as a business, bounce back from losses and reign in the high of winning before it clouds your judgment. I try to focus not on making money but on my execution. I know that if I execute properly and focus on being more efficient in my entries and exits the byproduct of my success will translate to a higher win percentage and more money in my account. By not worrying on making a certain amount of money it lets me trade more freely and just enjoy what I'm doing, though it's still really hard to see losses and keep going once I've banked a nice profit. It's something I will always be working on and maybe the best thing about trading is what it's teaching me about myself and how to take control of my emotions and learn discipline and processes that are important not only to trading but so many things in my life. It truly is an amazing thing, trading, and I'm really stoked to be a part of this living, breathing organism each and every day.