Top Financial Markets To Trade In 2024
If you're interested in learning about the best markets to trade in 2024 then look no further. In this article, we cover the top types of financial markets online and the best way to trade them.
2024 is set to be another record-breaking year for traders and investors alike with U.S. and UK elections taking centre stage. 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 this year 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
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.
Different Types of Financial Markets
Below is a quick list of financial markets. The different types of financial markets include:
- Forex Market
- Stock Market
- Derivatives Market
- Commodity Market
- 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.
If you would like to improve your knowledge of trading the financial markets then why not register for our Zero to Hero online course? This free online course will teach you how to trade the financial markets online, from set-up to execution, in just 21 days.
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 more than $6 trillion! Compare that to less than $1.5 trillion a day in 2001. Some key factors 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 open 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 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 transaction 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 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. 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 a 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.
Financial Market Trends for 2024
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 or Fall on the US Federal Reserve Interest Rate Decisions?
Interest rates have a huge impact on the direction of a currency market. When interest rates are rising, capital tends to flow into the economy and therefore the currency. When interest rates are falling, capital tends to leave the economy and therefore the currency. During the pandemic, most central banks around the world cut interest rates to record lows to stimulate economic growth.
Since the beginning of 2022, most central banks have begun to increase interest rates once again. The US Federal Reserve (the Fed), in particular, aggressively increased rates from 0.25% to 0.50% at the start of 2022 to the range of 5.25% to 5.50% by the end of 2023. It is no coincidence that the US dollar index rallied nearly 30% higher from 2021 to the middle-end of 2022 and declined half of those gains throughout 2023.
At the start of 2024, the US dollar index continues to trade in a range. As most central banks are now keeping rates on hold, few currencies are stronger or weaker than the others - causing a range in the forex market. However, central banks are ready to act to get inflation under control. Traders are now keeping a keen eye on the Federal Reserve's interest rate decisions this year.
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 a new record high in December 2023. At the start of 2024, the S&P 500 stock market index also created a new record high.
The US stock market has experienced a historic surge since the lows of the pandemic in 2020. In just three years, they are now trading at new all-time highs. This is even after a bear market in 2022 due to the impact of rising interest rates. The direction of interest rates will be an important influencing factor for the direction of the US stock market and just how far the trend can continue.
2024 is also a U.S. election year. The policies of whichever president is elected will also play an important role in the direction of the stock market.
How To Start Trading Financial Markets
You can begin trading the financial markets in just four steps:
- Open an account with Admirals.
- Click on Trade on one of your live or demo trading accounts to open the web platform.
- Search for your symbol/market at the top of the search window.
- Click Create New Order in the bottom window to open a trading ticket to input your trade size, stop loss and take profit level.
Did you know you can tune into the Admirals live trading webinars for free? Learn more about financial markets and how to trade by registering for your free spot below.
Conclusion
There are many different options when trading the world's financial markets. Having access to multiple markets can be useful in helping to trade global economic themes that develop in the world. Whether that is a rising currency due to higher interest rates, the growth in AI technology or declining oil prices, using a multi-asset class broker is essential. However, educating yourself on how to trade the financial market safely is even more important. Be sure to visit the Admirals Education section which is full of trading articles, take the online trading courses and visit the live webinars to help you in your education.
Continue Reading:
- Learn How to Trade Online
- The CFD Trading Guide
- How to Trade Forex
- How to Find the Best Forex Trading Course
- How to Trade the US Stock Market Online
- Zero to Hero Trading Course
FAQs on Financial Markets
What is the best financial market to trade?
There are a wide variety of financial markets available to trade. This includes forex, stocks, commodities, indices, derivatives, cryptocurrencies and more.
What is the most traded financial market in the world?
The forex market is the largest financial market in the world with a daily turnover of nearly $7 trillion.
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:
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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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