There are many markets to invest in. We have chosen to introduce you to the most popular ones among retail traders in order to better understand how they work, their advantages but also their disadvantages, so that you can choose the one that suits you.

The CFD market

CFD (contract for difference) trading is one of the most popular markets for beginners and has the characteristic of being able to buy and sell assets without owning them, i.e. intervening on an underlying asset.

Indeed, CFDs are derivatives that allow you to buy a large number of assets such as currency pairs on Forex, stocks, commodities or indices without owning the assets directly, i.e. you hold the underlying assets. So, for example, when you buy a CFD on a stock, you do not directly own the stock itself (which means you cannot claim its dividend if it offers one) but you agree to trade the difference in price of that stock between when you buy it and when you sell it.

So when you trade a CFD, you are simply betting on the probability that the price of the underlying asset will rise or fall. In stock market jargon, this is called a short position for buying and a long position for selling.

It should be noted that CFDs also allow the use of leverage, also known as margin trading. A distinction is made between the margin that is needed to open your position for buying or selling and the margin that is needed to cover potential losses in your position. Today, most CFD brokers offer guaranteed protection against negative balances, which used to happen to a lot of traders who did not use leverage properly and could end up having to pay back money to their broker, a practice that no longer exists.

In terms of fees, there are two types of fees: the spread and the commissions. The spread is the difference between the buy and sell price of the CFD you are buying or selling. The amount of the spread can be radically different from one broker to another, which is why it is always worth comparing brokers’ pricing policies to get an idea.

As far as commissions are concerned, they are only applicable for equities, and consist of commissions parallel to the spreads. Again, the price differences between brokers can be significant, so always compare their price lines to get an overall idea.
Many traders use CFDs strategically to hedge their purchases or sales of physically held stocks, to offset any losses they may have incurred directly through a CFD trade.

Due to the presence of leverage which can be high, this type of market is not really recommended for beginners.

Forex, or the currency market

Forex, also known as the foreign exchange market, is the market that organises the exchange of different currencies on a global level. Forex is undoubtedly the market where it is possible to find the best liquidity with extremely large amounts invested.

The way Forex works is simple, as it is based on the exchange rates of the different currency pairs, indicating the value of one currency in relation to another. To give you an idea of the immensity of the trade that takes place on Forex, the turnover generated per day from transactions amounts to over five trillion dollars. It should also be said that this liquidity is made possible by the fact that the currency market is open 24 hours a day, 7 days a week.

As for how it works, when you buy or sell a currency pair, you are betting on whether the price of one currency will rise or fall against another. So, if you buy EUR/USD, you are betting that the value of the euro will rise against the value of the dollar and, conversely, that the value of the dollar will fall against the euro.

The volatility of the currency market is quite high, which is why this type of market is not recommended for novice traders but for traders who already have some experience. There are many factors that can cause the price of one currency to fluctuate against another. Whether it is geopolitics, climatic events or simply the economic results of certain countries, the factors can be numerous and above all very unpredictable.

This explains the volatility of prices; it is sometimes difficult to understand the ins and outs of the evolution of one currency in relation to another if one does not take into account many factors that are difficult for beginners to grasp.

Nevertheless, Forex trading is still quite interesting for the opportunities it offers, starting with the ability to trade using leverage, but also the high levels of liquidity which also means that trading fees are often very competitive with brokers. Also, for traders who like to be reactive, it is important to know that prices in the Forex market are very reactive to economic, geopolitical and general news data. Finally, as mentioned above, Forex is tradable throughout the year without interruption.

On the downside, volatility obviously implies a higher risk, especially if you use leverage. There is also a concrete risk of liquidation of your account, so it is important to start by using a demo account and put in place a whole learning process in order to master the elements of this market.

The Stock Market

Choosing what to invest in the stock market is not always easy, especially when you are a beginner. If you are just starting your trading career, it is advisable to trade traditional markets such as equities. This is one of the most popular investment areas. To find out more, here is some information about the stock market.

What is a stock ?

By definition, a stock is a stock of the capital of a company that is listed on the stock market (or not). To put it more simply, it is a fragment of the larger whole that is a company. Thus, any person who owns a stock is in a way a co-owner of the company to which the stock belongs. He is therefore considered a « stockholder ».

How to invest in the stock market ?

To invest on the stock market, you need to follow the following procedure :

1. Choose a good stock broker.
2. Register with the broker
3. Deposit money
4. Buy a stock

This is the standard procedure for investing in company stocks. However, pay particular attention to the choice of broker. It should be legal, flexible in terms of fees, and suitable for your novice level.

Top 5 best performing stocks

Here are the best performing stocks in terms of market capitalisation :

• Apple : Global producer and distributor of software and electronics.
• Amazon : World leader in online shopping
• Google : World’s largest technology services company
• Netflix : Number 1 in global streaming
• Tesla : One of the world’s leading producers of innovative electric vehicles

In conclusion, remember that a stock represents a part of a company’s capital. It can be bought in real terms or traded via stock market instruments. Above you have a list of some of the best stocks to invest in. All you need to do is find the right broker to get started.

The Cryptocurrency Market

Since their advent, crypto-currencies have grown in importance very quickly. Today, the crypto currency market is one of the most sought after by investors. Want to invest in this asset class? Here is some useful information to get started.

What is a crypto-currency ?

Crypto-currency is defined as any digital currency. It is an intangible currency generated from a system called blockchain, which is itself contained on the internet. What is special about crypto-currency is that it is not dependent on any financial or governmental body. Unlike fiat currencies, it is managed in a decentralised way by the users themselves.

It is important to note that crypto-currency is usually traded on the stock exchange. This allows anyone to invest in its value.

How to invest in crypto-currencies ?

Here is the procedure to follow to invest in crypto-currencies :

• Choose a broker that offers digital currencies
• Register with the broker
• Make a deposit with the broker
• Open a buy order on the crypto of your choice

Top 5 best performing crypto-currencies

Check out the top crypto-currencies in terms of popularity in recent times :

• Bitcoin : The very first crypto-currency and more importantly one of the most successful.
• Ethereum : The crypto-currency from which smart contracts are derived.
• Ripple (XRP) : One of the crypto-currencies to have gained the support of mainstream banking institutions
• Tron : One of the cryptos whose blockchain allows the creation of decentralised applications.
• Dogecoin : The project that wants to further democratise the crypto-currency sphere.

So these are some of the crypto currencies you can look into to get started in crypto trading. The most important thing is to find a secure and beginner-friendly broker. As soon as you do, you can start trading digital coins.

Commodity markets

Getting started in stock market trading is not an easy initiative, especially when you don’t know which market to invest in. If you are in this situation, it is recommended to start your career with classic stock market assets such as commodities. To help you get started, here is some summary information about this market.

Commodities: what are they ?

The raw materials market is the set of inputs (basic elements) transformed by industries to produce finished products. This market is represented on the stock market; making it an asset you can invest in.

The commodity class is divided into two groups which are :

• The Hard part : This contains all the raw inputs such as oil, gold, silver, natural gas, and many others
• The Soft range : This focuses on industrial resources of agricultural origin such as wheat, Malta, cocoa, coffee, etc.

How to invest in commodities on the stock market ?

To invest in commodities in the stock market, here is the procedure to follow :

• Find a reliable broker that offers the commodities market.
• Create an account with the broker of your choice
• Transfer money into your account
• Place an order to buy a commodity

NB : You usually have to use derivatives such as warrants if you want to invest in this market. It is almost impossible to buy physical commodities unless you are a large banking or government institution.

Top 5 best commodities

Here are some inputs you can buy to get started in the stock market :

• Crude oil
• Gold
• Silver
• Platinum
• Cocoa

Now that you know what the commodities market is in practice, you can start trading this market. However, choose the right broker, as a mediocre broker will only make it harder for you.

The futures market

Buying stocks on the stock market does not only mean owning the asset in question. It is also possible to trade through simple speculation. To do this, you can use derivatives such as futures. If you don’t know what these are, you will learn more about this form of investment in this guide.

Futures: What are they ?

The term « futures » refers to what is known as « futures contracts » in French. It is actually a contract that a broker and a trader make about the delivery of a specific asset according to predefined terms. The two parties (seller and buyer) agree on the price of the asset to be delivered, and the duration of the contract.

When the agreement expires, one of the parties collects or disburses the difference between the price at the beginning of the contract and the price at the end of the agreement.

It is therefore a form of investment that allows the investor to anticipate future movements in an asset. Thus, when his predictions are correct, he can earn a profit from the contract.

How to invest in the stock market via futures ?

Here is the procedure to follow to invest in assets in the stock market with futures contracts :

• Find a legal and efficient broker that accepts futures
• Register with the chosen broker
• Deposit money
• Trade a future on the asset of your choice

NB : Futures are not a market. Rather, they are a form of investment. In stock market jargon, futures are classified as financial instruments, also known as stock market products. The same is true for CFDs, warrants and the like.

On what assets can you invest via futures ?

It is possible to trade futures on the following markets :

• Equities
• Indices
• Commodities
• Crypto-currencies
• Bonds
• Forex
• etc.

Ultimately, futures are compatible with almost all stock market assets. However, their availability varies depending on the brokers. This is why you need to choose a quality broker to trade futures.