Day Trading; Which Markets are Available?

Before you begin trading in financial markets, you have to decide where you want to focus your energy. Luckily, technology advancements have ensured that traders now have the option of choosing from a diverse range of instruments to choose from. But, this can also cause confusion because you cannot decide which day trading markets to invest in. From forex to stocks, there are numerous options, but you need to select the right market for your needs. Let’s explore the options available so you can make up your mind:

Stock Markets

One of the most popular online markets available for day traders is none other than the stock market. Put simply, you purchase and sell shares of a company in the stock market. The allure of this market is rather obvious; after all it is a straightforward investment vehicle and gives you the opportunity of profiting from some of the most renowned companies, such as Google and Amazon.

In addition, if you do decide to trade in the stock market, there are various indices to choose from as well such as NASDAQ, FTSE 100, S&P 500 and more. Nonetheless, you should also bear in mind that there is tough competition in the stock market and you have to have considerable knowledge before you can make profits in it.

Futures Markets

Another popular day trading market, this is better suited to traders who prefer to do their work from home. Simply put, a futures contract refers to an agreement between a buyer and seller for conducting a certain trade at a specific price and date in the future. Day traders use fluctuations in price to make a profit from the date the contract was made to the date the position was closed.

Future contracts are made for commodities, including precious metals like aluminum and steel to foods, fats and oils. Mitigating risk and unpredictability is the purpose of futures contracts. The benefit of this market is that it is quite flexible and doesn’t require a lot of capital, making it ideal for beginners.

Forex Markets

In recent years, the currency markets have grown by leaps and pounds and so has their popularity. Now, the forex market is the biggest market in the world. If you decide to delve into this particular market, you are basically trying to make a profit from the price fluctuations in exchange rates of different currencies. You can buy or sell currencies when you believe they will move lower or higher as compared to other currencies.

In the forex market, currency trading is always done in pairs. This market requires minimal investment, which has contributed to its popularity. Moreover, you don’t have to pay any commissions and the market is also open 24/7, which makes it incredibly convenient.

Cryptocurrency Markets

Day trading today is drastically different than what it was a decade ago. These days, you can find a number of cryptocurrency traders. It is true that thorough risk assessments and the rules and regulations pertaining to cryptocurrency have yet to be formulated properly, their popularity has risen considerably as a whole. These digital alt-coins promise high volatility, which has made them ideal for any day traders. There was a time when the pioneer cryptocurrency, Bitcoin, was traded for only a few dollars, but now its price has reached thousands.

The good news is that Bitcoin is no longer the only cryptocurrency in the market and now traders have different opportunities available to them. Some other options at your disposal include Litecoin, Ethereum, Ripple, Dash and more. There are various brokers in the market, such as that give you the chance to invest in multiple cryptocurrencies and that too at reasonable prices. Investing in this market can also be a good venture. Why?

Since the market is volatile, there is potential to earn high profits. There is no exchange risk that you need to worry about and the cost of trading is also very low. Furthermore, the market is also very accessible and with no barriers to entry, it can be a good choice.

Options Markets

You can now trade in the options market as well. An option is a financial derivative and under the contract, you have the right to purchase or sell an asset within or during a pre-determined date, which is also known as exercise date. The seller is legally obliged to meet the terms of the transaction. You can either sell or buy or if the buyer decides to ‘exercise’ the option before the expiration date. The biggest benefit of this form of trading is that it doesn’t require you to own the underlying asset, which can be considerably more expensive. There are two classes of options called the Put and the Call. Apart from that, there is an extensive list of different global, capital and emerging markets for trading options, but they are not appropriate for day trade.

Binary Options

This is another interesting market that you can venture in and it requires you to decide whether the underlying asset will finish below or above a particular price at a particular time. You can now trade these derivatives on virtually any instrument that can be found in the market. For instance, you can trade binary options on commodities such as aluminum and crude oil. You can also find binary options for world famous stocks such as Google. Even cryptocurrencies and forex market can be found on the menu of binary options. If you like trades with all or nothing, binary options are the way to go. Even before you place the trade, you will know how much you will win or lose. Thus, this market instrument is worth exploring if you are looking for a straightforward market that requires minimal capital and gives you access to global stocks.

You can select a day trading market based on different factors such as volatility, liquidity, market resources and the capital you have available. This will enable you to make the right selection for fulfilling your financial goals.

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