1.3The Major Financial Markets
- ·The main market classes and representative instruments
- ·How markets differ in volatility, liquidity, hours and catalysts
- ·Why there is no universally best instrument
Forex — currencies traded against one another.
- ·EURUSD
- ·GBPUSD
- ·USDJPY
Commodities — physical or commodity-linked markets.
- ·Gold
- ·Silver
- ·Oil
Indices — groups of companies represented by an index.
- ·NAS100
- ·US30
- ·GER40
Stocks — shares representing ownership in individual companies.
Crypto — digital assets such as Bitcoin and Ethereum.
Futures — standardised contracts traded on regulated futures exchanges.
Each market has different:
- ·volatility
- ·liquidity
- ·trading hours
- ·catalysts
- ·transaction costs
- ·behaviour
There is no universally best instrument. The appropriate instrument depends on the trader's strategy, timeframe, risk tolerance and market conditions.
Fit the instrument to the system, not the system to the instrument.
A strategy relying on wide intraday ranges may function on XAUUSD or NAS100 and produce very few qualifying setups on a low-volatility currency cross.
Examples use historical or illustrative data only. They are not live market signals.
List three instruments you are drawn to and note their typical trading hours and primary catalysts.
NAS100 belongs to which market class?
A trader with a full-time job wants intraday setups but can only watch the market late in the evening. What should drive instrument selection?
- 01Markets differ structurally, not just in name.
- 02Volatility, liquidity, hours and catalysts define behaviour.
- 03Instrument selection is a strategy decision.
Educational content only. Nothing here is financial advice or a recommendation to trade. Trading involves risk of loss, results vary between individuals, and past performance does not indicate future results. Only capital you can afford to lose should be exposed to market risk.