Trading in financial markets is growing rapidly in popularity, thanks to technology that makes it possible for everyone to buy and sell financial instruments from the comfort of their own home. For those who become skilled in the art of trading, there can be significant rewards, whether that is a steady extra income or a boost to savings.
There is plenty of advice out there for newcomers, including informative articles and vlogs, and if you can obtain stock trading chat room access you may be able to get trading advice direct from successful traders. But once you’ve grasped the basics and worked out which trading strategy you want to try out, which markets should you trade in as a novice? Here is a brief guide to the two most popular markets for newcomers to trading.
The Foreign Exchange or FOREX is an extremely popular market for newcomers to trading and in the last few years the level of turnover in the FOREX markets has been increasing steadily as more and more budding traders open accounts with FOREX traders.
There are numerous reasons why FOREX markets are the ideal starting place for trading newcomers, and one of the most significant is that FOREX trading requires very little investment to get started. It is possible to open a FOREX trading account with a minimal initial deposit, and once that has been done, you can trade a wide range of global currencies. Commission on FOREX trades is also much lower than in conventional stock market trading, which will also appeal to novice traders with limited budgets.
The principles of FOREX trading are also easy to grasp. Traders are simply exchanging one currency for another, and the level of currencies will generally respond to economic news in a transparent way, making price fluctuations easier to predict. FOREX traders are also able to access a wide range of analytical charts and tools, many of them free.
Exchange traded funds or ETFs enable traders to profit from currency moves by making trades in the stock exchange. It takes a higher level of funds to set up an ETF account, but the advantage of this kind of trading is that ETFs themselves can be bought and sold, which in theory enables traders to increase their profit levels.
ETFs also enable a trader to participate in other markets including fluctuations in commodities such as oil, silver and gold, offering a wider range of trading options. For novice traders who are beginning to feel more confident in their skills and strategies, ETF trading offers a chance to bring more variety and hence more opportunity to their trading portfolio.
Trading has become a popular way for many people to supplement their income or add to their savings, and while the risks should always be considered, by focusing on these two markets, novice traders can give themselves the best possible chance of developing their skills and making a profit along the way.