Selecting the top Financial Markets for Trading and Earning in the year 2021
The year 2020 has shown many things ranging from Covid 19 to US presidential elections. But it is better to start fresh rather than thinking over past things. The coming year of 2021 will bring many opportunities in the arena of trading and investing. If you are playing to sell and purchase shares and stock from the top 10 largest stock exchanges across the globe, want to start trading in one of the largest volume markets (forex market) or wish to invest in the commodity market such as silver, oil and gold.
2021 will be the best year to start with any financial market which you wish to trade. In the article provided below, you will learn about various concepts related to the top financial markets. It also brings the list of the top markets which will generate huge profit for you in the year 2021. In the end, you will discover how to start trading in each market in just five simple steps.
Introduction to Financial Markets
The financial market is not different from that of other markets where goods and services are purchased and sold. The only difference is that in the normal markets, and the exchange of clothing, computers or vegetables is pursued through the exchange of national currency or local currency. On the other hand, in the financial market, the main focus lies on selling, buying and holding financial assets, instruments and products.
This market has shown commendable expansion and has risen exponentially over the last few decades. It offers numerous types of financial assets and instruments for trading. It further provides you with chances or opportunities to expand your capital.
Various types of Financial Markets
1) Commodity market, which includes trading on gold, silver, oil etc.
2) Capital markets, which include bonds and stocks markets.
3) The Forex market, also known with the name currency market as well as the foreign exchange market.
4) Derivatives market, which includes contracts for difference or CFDs.
5) The Cryptocurrency markets include altcoins and famous bitcoin.
6) Mortgage market allows long-term loans.
7) Money markets which include short-term debt.
8) Insurance market, which helps in transferring risk for a premium.
The Primary Function of the Financial Markets
The financial markets act as an essential entity in the economy and economic development of the country. Its other key functions include:
1) Liquidity
2) Traditional lending and borrowing
3) Price determination
4) Risk sharing
5) Efficiency costs such as transaction costs and
6) Details about the flow of capital
The financial institution is a medium that facilitates the movement and flow of capital within the financial system or overall global markets. These institutions are investment banks, commercial banks, brokers, insurance firms and also non-banking financial institutions which includes credit unions.
The functions of the financial markets have not changed in the past decades. And with the advancement in technology, the demand for the international financial market and trade has shown a sharp surge. It moved the global market and trade to expand and grow.
Various types of Financial Markets
There are numerous markets, and each has the potential to generate massive profit, but the need is to select the one which suits you best. The description of each is provided below:
The Forex Market
The popularity and growth of the forex market and its per-day trade volumes have shown a commendable surge in the past 40 years. It started with a volume of $5 billion in the year 1997 and reached $5 trillion in 2017. There are some important factors and points which compelled the market to attain such height.
- More price volatility
- Better access to the forex market through brokers
- Advance computers
- More access to information and trading tools
The currency trading market is a type of market that is an excellent option for those traders who are searching for medium-term and short-term trading opportunities. It remains open twenty-four hours a day and five days a week.
The Derivatives Market
Derivatives are assets or securities which are correlated to an underlying asset and also used by a trader to hedge against price fluctuations. Further, CFDs and options fall under the category of the derivatives market. Traders can make use of this instrument to take the risk to make financial gains or hedge against risk.
The Commodity Market
The commodity market has two types of commodities: soft commodities which include livestock products and agricultural products and hard commodities, which includes oil, gold and several others. Traders and investors can take part directly in the commodity by buying futures, options and CFDs or indirectly by buying stocks.
The Capital Markets
Capital market is the one that includes bond and stock markets (both public sector and private sector bonds). It consists of two markets: the primary market and the secondary market. The primary market is the one where governments and firms issue new securities, whereas the secondary market is where previously issued bonds and stocks are traded.
The Mortgage and Insurance Markets
Mortgage markets are all about long-term loans which are offered for purchasing a property. Traders can trade these markets on secondary mortgage markets. The insurance market comprises the insured and the insurer, where risk gets transferred for a premium. Insurance firms have abundant cash reserves that they spend in bands, stocks and derivatives markets.
The Money Markets
They are the one which aims at very short-term debt. It comprises central banks and local banks. Bank offers loans for short-term liquidity objectives. You must have heard that the central bank is considered as the lender of last resort.
The Cryptocurrency Market
Cryptocurrency trading deals with speculating over the price shift through a CFD trading account, or selling and buying the underlying virtual coins through an exchange. The mining system and blockchain technology attracted numerous investors to start trading in virtual coins. The headlines on altcoin and bitcoin in 2017 is another reason for its surging popularity.
Other reasons for trading cryptocurrency coins in 2021 are:
- Volatility
- Market hours
- Improved liquidity
- Ability to go long or short
- Leveraged exposure
Top Financial Market Trends
Out of more than 3,000 markets, there are some important financial markets trends for traders and investors to keep an eye out on. The list provided below brings out some of these markets.
1) The forex market
2)The stock market
3) European markets
4) Asian markets and
5) US markets
How to Start Trading in the Financial Markets?
One can start trading in the financial markets through an authentic brokerage firm. The broker acts as a primary financial link that connects traders to the market. The various technical, fundamental, research and educational tools offered by the brokers allow you to reach a decision that can lead to massive profit. if you wish to start your journey in the trading arena then follow these steps for opening a trading account.
1) Open the website of the broker and click on the sign-up menu. And then Check the URL of the website as there are many fake firms in the financial market, which aims at stealing your information.
2) Get yourself registered by entering your name, surname, profession, email id and phone number.
3) The next step is uploading the desired documents. It includes:
- Identity proof: It includes a passport or national id card in case your passport expires.
- Financial and bank statements not older than six months
- Address proof: It includes any document such as a bill that contains your photograph along with the permanent address.
4) The final step is choosing the market you wish to trade in and depositing the fee for the same.
5) You can start and enjoy trading now.
You can go with TradeATF, the legitimate financial service provider regulated by the Cyprus Securities and Exchange Commission. If you wish to pursue trading with the broker then visit the official website to open an online trading account and to view its offered features. But, check the URL and authenticity of the website as there are fake websites and firms around.
The Bottom Line
Investing in the financial markets can profit you in the year 2021. Just the need is to select the best market which fits nicely into your trading expectation and comfort level. And then visit the site of TradeATF and take its educational courses to enhance your knowledge and trading standards in the selected market. So, go ahead and trade.
