There are thousands of markets to trade and a number of ways to
trade them, whether you choose to use futures, options, CFD's or
a spread
betting product.
New traders to the market can often become daunted by the range
of markets and are sometimes overwhelmed by the amount of
information available. The temptation is to read an article about a
particular market and then to start trading only to then read about
another market, stock or currency that is currently making the
headlines and is volatile and switch to this instead. A good
example of this is the Oil markets. In times of civil unrest in the
Middle East the oil markets become very volatile and there are
traders who make incredible amounts of money from these movements.
But remember for every buyer there is a seller and for every winner
there's a loser. If you are trading a market for the first time it
is likely that you are trading against other very experienced and
knowledgeable market makers and always be aware of your downside
risks for every trade you place.
Whilst many brokers and market makers advertise thousands of
markets to trade, nearly 80% of all retail trading activity takes
place in only a small number of instruments. The current trend of
activity is towards the currency markets but even within this
large number of markets only a handful really attracts the volume
from retail and professional investors. The same can be said about
the indices; many
markets to choose from but only really half a dozen that are
popular with large numbers of traders. Commodity
markets are another group that offer a huge range of
products to trade but that actually only see volume in the markets
that are liquid. Pork Bellies and Frozen Concentrated Orange Juice
were commodities made famous by the film Trading Places but in
reality very few retail traders would actually trade these
markets on a daily basis.