What Markets Should I Trade?

There are many markets available to trade. We tend to recommend markets that are highly liquid with high daily trading volumes. Here are some factors to consider when choosing which markets to focus on:

Market Sessions

The timing of market sessions is one of the main factors when deciding which markets to trade. Different asset classes have different trading hours, and this can directly affect whether or not you can even open a trade. 

For example, stock markets have specific opening and closing times based on their local time zones, such as the New York Stock Exchange or London Stock Exchange, which may limit your trading opportunities depending on your availability.

Forex markets offer an advantage in this area. Being open 24 hours a day from Monday through Friday, they allow traders to place trades at any time during the week. 

There are also overlapping trading sessions in major financial locations around the world, such as Tokyo, London, and New York which helps keep the forex markets moving. 

If you have a full-time job or other time constraints, forex can make it easier to trade around your schedule.

Steady Price Movements

In highly liquid markets, such as forex or major indices like the S&P 500, price movements tend to be smoother and less erratic. 

This is good for traders because steady markets are often more predictable. Unless there’s a significant economic release or a global event, these markets generally have fewer extreme price swings .

In contrast, markets with lower liquidity, such as smaller-cap stocks or niche commodities, are far more susceptible to volatility, making them less predictable and more prone to sharp price changes on smaller volumes of trades. 

These disruptions may happen due to low impact news events or even a single large trade. We prefer to focus on markets where price movements are relatively steady.

Transaction Costs

Transaction costs are often overlooked. In markets with higher liquidity, transaction costs such as spreads and commissions tend to be lower. 

This is particularly true in the forex market, where highly traded pairs like EUR/USD or USD/JPY typically have very tight spreads, which means lower costs per trade. Over time, reducing transaction costs can significantly improve your returns.

On the other hand., trading in lower liquidity markets often means higher spreads and slippage. For this reason, focusing on highly liquid markets not only reduces risk but also helps keep your costs low.

No Directional Bias

Another advantage of trading in the forex market is the lack of directional bias. Because forex trading involves currency pairs, you're always buying one currency while selling another. 

This creates opportunities for both long and short positions, with no bullish or bearish bias. This makes forex a more balanced market, particularly compared to equities, which often have an upward bias over the long term.

A bullish bias limits the number of opportunities, as traders may avoid short opportunities due to higher risk. In forex, you can take advantage of both rising and falling markets equally.

Recommended Markets to Get Started

Based on the previous factors, here are some markets we recommend getting started with:

Forex Pairs:

• EUR/USD
• USD/JPY
• AUD/USD
• GBP/USD
• USD/CAD

Major Index and Commodities:

• S&P 500
• West Texas Intermediate (Oil)
• Gold

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