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Thursday, June 17, 2021

THE DIFFERENT MARKETS TO TRADE

There are four main trading markets, namely forex, stocks, futures, and options.

The Forex Market

The largest market to trade, the forex market, is open 24 hours a day and is the most accessible market. Traders can open an account as little as $100 with some brokers; however, it is recommended to start with at least $500.

Specific currency pairs have higher liquidity than others, making them more profitable to trade.

The Stock Market

Traders buy or sell stocks f publicly held companies on the stock market. Companies list their shares for the public to buy or sell; the stock exchange facilitates these stocks’ trading. The major U.S stock exchanges are the New York Stock Exchange (NYSE), Nasdaq, and Chicago Board Options Exchange (CBOE).

 The U.S. Stock market sessions start at 9:30 AM EST until 4:00 PM EST Monday to Friday. Trades can also be placed during Pre-market sessions. To start trading stocks, a trader would require a minimum of $1000 to fund their trading account.

The Futures Market

The Futures market is defined as a contract between a buyer and seller of a specific asset to buy or sell at a specified date in the future. These are examples of the futures markets: New York Mercantile Exchange (NYMEX), Kansas City Board of Trade, Chicago Mercantile Exchange (CME), Chicago Board of Trade (CBoT), Chicago Board Options Exchange (CBOE), and the Minneapolis Grain Exchange.  Futures trading used to be done on the trading floor pits, but technology has advanced, and it’s mainly traded online.

The Options Market

The Options market comprises all the option contracts (buying or selling). The options and stock market are similar, stocks being the highest options trading being conducted. Options trading is a contract of buying or selling an asset at a predetermined price.

Which Market to Trade?

Choosing the market to trade will depend on several factors, your personality, trading style, your financial status and your interests. Your financial status is a crucial factor. It will determine which market you can start trading in since the initial investment will be pretty significant for specific markets like stocks and futures, for example. The forex market is the most affordable, and a small investment is required. The main day trading markets are stocks and forex markets. It is advisable that you research each market first before deciding which to trade.