• Forex/ Cryptocurrencies
With the advancement of the fintech industry and online trading, we are getting more and more individuals speculating the markets, these are called retail traders.
If you are new to this billion-dollar industry, here is a simple guide as to what you can trade. The vast array of assets is very beneficial to traders as it allows them to trade some assets simultaneously and benefit from the different correlations found between assets (e.g. Gold up – USD down).
It also allows for traders to profit almost on a 24/7 basis assuming they correctly identify the market conditions using one of the 4 different Option Types available on the Forex Market:
The forex market consists of all foreign exchange currencies. This is by far the largest market, trading over 5 trillion USD daily.
A brief on Forex:
• All currencies are traded in pairs. For one currency to rise, another must fall (e.g. EUR/USD). The first currency is the base currency, and it is measured against the 2nd or “quote” currency. When you see the EUR/USD is at 1.3455 this means that 1 EUR is worth 1.3455 USD.
• When trading Forex the movement is measured in pips. The pip is the 4th decimal point in all currency pairs apart from the JPY which is the 2nd. Most online brokerages offer live market prices and show fractions of pips so your feed will provide 5 decimal points (e.g. 1.32761). If the market moves from 1.32761 to 1.32792 it means, there was a rising movement of 3.1 pips.
Crypto currencies, new asset attracting the younger upcoming generation. At the end of the third quarter of 2020, there were 351,417 Bitcoin transactions recorded daily worldwide.
The commodity market is the oldest market on the planet and consists of all traded goods such as Gold, Silver, Oil, Coffee, Sugar, Corn etc.
It is the second largest market in the world, trading over 450 billion USD daily.
The stock trading market is where you trade individual stocks of companies such as Google, Apple, and Facebook. Owning stock means you have partial ownership of the company in which you have invested. You profit once the value of the company rises and hence the stock price rises. This is a long-term investment unless traded in forex/CFD. Where you have the option to short a stock.
Stock index - the total value produced by combining several stocks. An index is designed to represent a particular market or sector. For example, the S&P500 index is calculated by combining the shares of the 500 largest U.S. companies together into one value.
Being knowledgeable in the markets helps make profitable decisions.
Having that extra bit of knowledge about the markets and understanding how to implement it in your trading or investment portfolio is likely to increase your confidence, in speculating the markets, being either investing or trading.
Getting your knowledge up to date It is important to keep up to date with the market. We live in an environment where opportunities come and go throughout the entire day. The internet with instant news and liquidity, money movement, has speeded up the volatility of the markets and assets.
Where do I get my news from?
You can stay up to date with the markets from a number
1. www.bloomberg.com – Market News
2. www.investing.com – Market News
3. www.reuters.com – Market News
4. www.finviz.com – Forex Trends/Asset Performance
5. www.forexfactory.com - Reports
6. www.calculatedriskblog.com – Report Predictions
7. www.marketwatch.com – Market News/Stock
Use a demo, trading CFD’s are risky for inexperienced traders so never invest more than you can afford to lose.