Top Financial Markets To Trade In 2023
If you're interested in learning about the best markets to trade in 2023 then look no further. In this article, we cover the top types of financial markets online and the best way to trade them.
2023 is set to be another record-breaking year for traders and investors alike. Staying up to date with the best trading markets and tools is essential in navigating financial markets volatility and risks.
Not only will you learn about the top financial markets to trade in 2023 but you will also learn how you can get started today through a live or demo trading account and how to access advanced trading tools to aid in your trading performance.
Table of Contents
The Financial Markets Explained
The financial market is a marketplace where financial securities are traded on both a national and global level. Traders buy and sell those securities to gain potential profits while trying to limit their risks.
Many traders tend to focus on one particular financial market, for example, trading stocks or Forex, but it is important to have an overview of all the different markets available to trade on because they can all impact each other. This section reviews the most important financial markets and explains their global role.
The financial market is, at its core, not much different to other markets, where goods and produce are bought and sold. But rather than the exchange of vegetables, clothing, or computers for the local or national currency, the financial markets are focused on the buying, selling and holding of financial securities, products and instruments.
The financial market has expanded exponentially over the past few decades and now offers many types of financial instruments.
The Different Types of Financial Markets
Below is a quick list of financial markets. The different types of financial markets include:
- The Forex Market
- The Stock Market
- The Derivatives Market
- The Commodity Market
- The Cryptocurrency Market
- Insurance & Mortgage Markets
- Capital Markets
- Money Markets
Some of these financial markets are by their own nature more long-term focused, short-term oriented or a mixture of both. The mortgage market, for instance, is where many long-term loans take place, whereas money markets are focused on the short-term.
Forex, stocks and commodities can be traded both short and long-term. Professional traders can decide to engage in investments or trading, depending on their own approach and trading style.
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1. The Forex Market
The growth of the Forex market has been enormous in recent years, as it cements its status as the most heavily traded financial market in the world. In 2019, the daily turnover in the Forex market averaged in excess of $6 trillion! Compare that to less than $1.5 trillion a day in 2001. There are some key factors that have contributed to this trend:
- The growth in international trade
- Advanced computers
- Easier access to financial markets via online brokers
- More trading tools and better access to information
Forex is a type of market that is popular with traders who are looking for short and medium-term trading opportunities, who can take advantage of it being opened 24 hours a day, 5 days a week.
2. The Stock Market
Like the rapid growth of the Forex market, another such trend could be found in global stock markets, where the US stock markets have arguably become much more important compared with other parts of the world. Three important changes have occurred within the last 100 years:
- The US has achieved market dominance.
- The exchanges were consolidated.
- Secular (market activities occurring over the long term) sector rotation occurred.
The stock market is perhaps the most well-known type of financial market to trade and invest in. The stock market is where public companies such as Apple, Amazon, Disney, HSBC, Shell and Volkswagen list their shares for investors to buy and sell.
Stock Market's Industry Sectors
Stock sectors changed substantially between 1900 and 2017. Sectors that were very strong in 1900, such as railroads, lost substantial market share one century later. In the United States, railroads dominated the US stock market with an industry weighting of more than 50%. In 2017, this weighting fell to just a few percentage points.
The trends of the past century do not have to be the trends of this century. Luckily traders do not need to know what the future will look like 100 years from now. They can choose to simply trade on a shorter time scale. Ultimately, it is simpler to understand what the financial markets might be doing in the short-term rather than in the long term, especially when analysing an entire century.
Did you know that with the Admirals Invest.MT5 account you can invest in stocks and exchange traded funds (ETFs) from 15 of the largest stock exchanges in the world?
Furthermore, you can invest with very competitive low fees and low minimum transactions fees which is ideal for smaller accounts. You can also access state of the art trading platforms, research and premium analytics tools.
3. The Derivatives Market
Derivatives are a class of securities whose value depends on (or is derived from) an underlying asset. Options, futures and CFDs are all examples of commonly used derivatives. Speculators can use these instruments to hedge against risk or to take on risks in order to potentially make a financial gain.
CFDs in particular have grown in popularity amongst the online trading community in recent years. As with most other derivative products, CFDs allow traders to speculate on both rising and falling markets, without ever owning the underlying asset in question, as well as:
- Trade long and short.
- No additional charges on short sales (attempting to profit from falling prices).
- Advanced risk management tools - use stop loss orders and take profit levels to minimise risk.
- Access to global financial markets such as Forex, Stock CFDs, Commodity CFDs, Index CFDs and more.
- Leverage trading. You only need a small deposit of the trade value to control a larger position.
4. The Commodity Market
The commodity market is comprised of hard commodities, such as gold and oil, and soft commodities such as agricultural and livestock products. Market participants can invest directly in commodities, by purchasing the physical asset in question, or indirectly by purchasing stocks or trading derivative products.
With Admirals, you can speculate on a wide variety of commodity markets using CFDs. This includes:
- Coffee, Cocoa, Cotton, Sugar and more.
- Brent Crude Oil, WTI Crude Oil, Natural Gas
- Gold, Silver, Copper, Platinum
5. The Cryptocurrency Market
Although a relatively new market, cryptocurrencies, particularly Bitcoin, have had their fair share of headlines in months. Towards the end of 2021, we saw an unprecedented surge in the price of several cryptocurrencies fuelling global interest in the coins, most notably from Tesla CEO Elon Musk.
What the future holds for this new form of digital currency and how the market will continue to develop remains to be seen. However, many traders and investors speculate on cryptocurrencies due to their high volatility. This can be a good thing and bad thing so make sure you educate yourself properly on the risks of the cryptocurrency market.
6. Insurance and Mortgage Markets
Mortgage markets revolve around long-term loans that are provided for buying a property. In the US, these loans can also be traded on secondary mortgage markets.
Insurance markets involve the insurer and the insured, where the risk is transferred for a premium. Insurance companies have substantial cash reserves which they invest in stocks, bonds, and derivatives markets.
7. Money Markets
Money markets are focused on very short-term debt, and involve banks lending to each other for short-term liquidity purposes.
8. The Capital Markets
Capital markets include the stock and bond markets (both private and public sector bonds). There is a primary market, where companies and governments issue new securities, and a secondary market, where previously issued stocks and bonds are traded.
Let's take a look at how some of these different types of trading markets are shaping up for 2022 and what some of the best markets to trade on could be.
Financial Market Trends
In this section, we will highlight several financial markets online trends to look out for in the markets as the year develops.
It is important to note that successful trading is not just about spotting the best market trend. After all, trends can change. Risk management is a key ingredient for long-term trading success.
1. Will the US Dollar Rise on Fed Interest Rate Hikes?
As central banks have kept interest rates at record lows for many years, economic growth is finally starting to pick up. Since last year, coronavirus restrictions have eased and consumers have been back at the shops while businesses have reopened. Many corporate companies took advantage of the historically low interest rate to fuel their growth.
As US inflation reached 7.5% in early 2022 - the highest on record since 1982 - it has been forecasted the Federal Reserve will increase interest rates six and a half times this year. Higher interest rates usually translate into a rise in the currency. The US dollar has already been one of the strongest currencies this year with many analysts forecasting more strength yet to come.
Trading Markets - The US Dollar Index
The US dollar index measures the value of the US dollar against a basket of foreign currencies and is widely watched and speculated on by traders and fund managers alike. You can learn more about it in our article ‘How To Trade The US Dollar Index’.
Source: Admirals MetaTrader 5 - USDX, Monthly. Date Range: 1 May 2005 to 18 Feb 2022, accessed on 18 Feb 2022 at 15:00 GMT. Past performance is not necessarily an indication of future performance.
The US dollar index shows the value of the US dollar against a basket of different currencies. The above monthly price chart shows a long term trading range that has developed between the two black horizontal lines around 102.00 and 88.00. The US dollar has been one of the best markets to trade since the middle of 2021 as the price has been rising higher since turning higher from the bottom of the trading range.
The market has been forecasting higher interest rates for the US dollar and has been positioning itself accordingly. Whichever way you look at things, 2022 is likely to be an interesting year for the US dollar and currency traders. How will you be trading this type of financial markets?
One of the best ways to get started to trade markets is by practicing your trading skills and testing your ideas in a risk-free environment. You can do this with a FREE demo trading account!
2. Will the US Stock Market Crash or Rally?
Not many other industries flourished in the stock market during the 2020 pandemic to the extent of the technology sector. Many US tech stocks experienced unprecedented growth over the past few years and played a major role in creating new record highs several times in 2021.
However, many of these tech stocks have experienced such rapid growth that some now appear overvalued, leading some commentators to opine that this sector is set to unravel in 2022. As global economies begin to emerge from the pandemic, investors may decide to unwind positions in tech stocks for opportunities in industries that were hampered by Covid-19 and are therefore more undervalued, such as airline stocks.
Source: Admirals MetaTrader 5 - NQ100, Monthly. Date Range: 1 Aug 2005 to 18 Feb 2022, accessed on 18 Feb 2022 at 15:00 GMT. Past performance is not necessarily an indication of future performance.
The chart above shows the long term price action of the Nasdaq 100 stock market index. This index shows the value of the largest 100 technology stocks listed on the NASDAQ Exchange and is used as a barometer for the health of the tech sector. It's clear to see the long term growth in technology shares since 2008 which accelerated during the pandemic.
The stock market has already started to sell-off in early 2022. Investors have been concerned about sky-high valuations, as well as the Russia-Ukraine conflict and the impact of higher interest rates. As tech companies need to borrow to grow, higher interest rates lead which leads to higher borrowing costs that can impact profit margins.
With the interest rates set to rise exponentially this year, it could spell even more trouble for the Nasdaq 100 index. Currently, the price is trading very far from its 20-monthly or 50-monthly exponential moving average (shown as the blue and red lines respectively). Some traders may use products such as CFDs to short sell in an attempt to profit from a fall in price, while some investors may use the weakness to purchase shares at lower prices.
With Admirals you can access both types of accounts, helping you to capitalise across a variety of types of financial market trends.
3. Could Gold Rally to Record Highs?
Many commodities suffered gravely in 2020 as a result of the change in consumer behaviour caused by global lockdowns. However, over the past few years, many have begun to recover strongly and have continued to grow this year. This growth in the commodities market reflects investor optimism about economic recovery post-pandemic and can particularly be seen in Brent, WTI and copper, all of which are likely to benefit from the reopening of society.
However, the fear of a stock market decline and escalating tensions between Russia and Ukraine has also made gold very attractive. The yellow metal is often seen as a safe haven currency. Investors tend to flock to this market in troubling economic times. In the few years before the pandemic gold prices were rising and recorded a new record high in 2020.
Since then, the price of gold has remained range based but has now broken out of a symmetrical wedge price action pattern.
Source: Admirals MetaTrader 5 - Gold, Monthly. Date Range: 1 Jul 2005 to 18 Feb 2022, accessed on 18 Feb 2022 at 15:00 GMT. Past performance is not necessarily an indication of future performance.
In the long term chart of gold against the US dollar shown above, the recent symmetrical triangle pattern is shown by the two ascending and descending black lines. The price has now broken out of the top of the triangle pattern which is a bullish technical breakout. If buyers remain in control of the market, gold could be on towards a new record high.
With Admirals you can speculate on the price of gold in a variety of ways:
- Trade gold CFDs. This will allow you to trade long and short and potentially profit from rising and falling prices.
- Invest in gold stocks. Gold mining companies can sometimes strengthen as gold prices push higher.
- Invest in gold ETFs. Exchange traded funds are funds that track the underlying price of gold by either holding physical bullion or by purchasing gold futures contracts.
- Use the Admirals Wallet Gold Account which allows you to receive the performance of gold with zero holding costs!
You can stay up to date with all the latest developments in the financial markets through Admirals' FREE trading webinars.
How To Start Trading Financial Markets With Admirals
Now that you know the top financial markets to trade, opening either a live or demo trading account with Admirals will allow you to trade them!
While not all types of financial markets are available to speculate on, traders with Trade.MT4 or Trade.MT5 accounts from Admirals can trade CFDs across a range of different markets, including Forex, stocks, commodities and cryptocurrencies (*depending on your jurisdiction). You can also access the Admirals Invest.MT5 account if you want to invest in real stocks and ETFs.
To start trading the financial markets, follow these three steps:
- Open an Admirals trading account
- Download your free trading platform
- Create a new order and make your first trade!
Opening an Admirals Account
In order to open a trading account with Admirals, head over to the sign up page on our website and enter the details requested to open a ‘Dashboard’ account.
Once this is done you will have instant access to the Dashboard! From here, you can open either a live or demo trading account. If you are new to trading, it is recommendable for you to open a demo trading account to begin with until you get comfortable trading the best financial markets.
Opening a demo account is as simple as clicking ‘Open New Demo Account’, selecting the type of account you want, the desired amount of leverage and the amount of virtual funds you would like in the account.
In order to open a live trading account, you will need to follow these steps in order to complete an application:
- Click the ‘Open Live Account’
- Add and verify your phone number.
- Add your details over the following pages. These details will include contact information, tax identification details and your passport number.
- Read and accept the confirmation notice.
- Verify your identity by uploading the requested documents.
Once you have completed these steps, Admirals will review your application after which you will be contacted by email with the results. If your application is successful, you will receive your account details by email. Now you need a trading platform in order to start taking positions in the financial markets!
How to Download the MetaTrader 5 Trading Platform
From the Dashboard homepage, select ‘Trading Platforms’ from the left hand side of your screen, before clicking on the relevant download button for MetaTrader 5 (Admirals also offers the use of the MetaTrader 4 trading platform).
Mac users may want to read our guide ‘How to Install MetaTrader 5 For Mac’, as the process varies depending on which MacOs you have installed (we also have a similar article for MetaTrader 4).
Once downloaded, open your trading platform and log in using your Admirals account details.
How to Place a Trade in MetaTrader 5
In order to place your first trade in the MetaTrader 5 trading platform, follow thse steps:
- Open the Market Watch window by selecting View from the menu at the top of the platform or by pressing Ctrl+M on your keyboard. This will open up a list of tradable symbols on the left side of your chart.
- Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
- This will then open the window shown below which details all the markets available for you to trade on. From here you can add a wide variety of markets to your Market Watch window by selecting them and clicking Show Symbol.
Source: Admirals MetaTrader 5 - Symbols
After clicking the OK button in the Symbols window you can now view the different instruments in the Market Watch window. To view a price chart of a particular market, simply left-click on it in the Market Watch window and drag it onto the chart area. From here you can now open up a trading ticket:
- Right-click on the chart.
- Select Trading.
- Select New Order, or press F9 on your keyboard.
- A trading ticket will open for you to input your entry price, stop loss and take profit levels and volume of your trade.
Source: Admirals MetaTrader 5 - New Order GBPUSD.
How to Find the Best Financial Markets to Trade
Having the right trading tools and products at your disposal is essential to any trader seeking success in the financial markets. In the following sections, we will look at a few tools and products which can help you on your trading journey.
Trade Markets Using the Admirals MetaTrader Supreme Edition
Whether you are a short-term or long-term trader, having the ability to view historical buying and selling activity in the markets you want to trade is essential. The charts which show this level of activity can often exhibit repeatable and predictable patterns that traders use to help in their decision making.
However, what is even more important is having the ability to trade directly off the chart so you have 'all in one access'. The MetaTrader platform is arguably one of the best trading platforms used by financial market participants.
By now you should have downloaded one of the free MetaTrader trading platforms provided by Admirals listed below:
If you are looking to supercharge your financial markets trading experience for 2022 then you should also consider enhancing your MetaTrader trading platform by downloading the MetaTrader Supreme Edition, a free plugin provided by Admirals.
This will enable you to gain access to more features such as a correlation matrix, global opinion widget, a mini terminal for advanced orders and a wide range of advanced trading indicators. MetaTrader Supreme Edition users can also access automated analytics and analyst research from Trading Central.
Trade Markets Using Premium Analytics From Admirals
Something which is essential for all traders, regardless of style, preferred financial market or trading experience, is that they make their trading decisions based on the latest market information available.
With this in mind, allow us to introduce Premium Analytics! This is a new, state of the art tool, provided exclusively by Admirals, which displays a range of essential market information in one, easily accessible location.
The best part about this platform is that it is absolutely free for anyone who has a live trading account with Admirals!
Source: Admirals Premium Analytics. 18 February 2022.
As seen in the image above, the tool is broken into four different sections, which can be personalised for specific trading instruments selected from the left hand side of the screen. Each section can be enlarged to provide even more information. Let’s look at each of these four sections briefly.
Source: Admirals Premium Analytics - News. 18 February 2022.
Finally, we have the Technical Insight tool to help traders conduct their technical analysis of the financial markets. In this section, traders can see all the recent technical developments in their chosen instrument which are highlighted on a price chart and categorised as either bullish or bearish.
These can be filtered for short-term, immediate-term and long-term outlook, with each outlook also categorised as either bullish or bearish.
Source: Admirals Premium Analytics - Technical Insight. 18 February 2022.
The Technical Insight tool is not only a great way for beginner traders to get more familiar with technical analysis but also for more experienced traders to easily access a vast amount of analysis instantly.
Conclusion - Top Financial Markets to Trade
Now you are armed with a better understanding of the financial markets online, some of the top financial market trends to focus on for 2022 and how to access state of the art trading tools to help you in your decision making, you can now begin to make 2022 your year!
Open a trading account and see all of the features for yourself first hand.
Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
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- The Analysis is prepared by an independent analyst Jitan Solanki, Analyst, (hereinafter "Author") based on personal estimations.
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- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.