Here are some points to think about when choosing a market or markets to day trade. Use caution and always consult your accountant, lawyer or professional advisor before acting on this or any information related to a lifestyle change or your business or finances. Also known as forex, currencies are a big industry that has a volume of over $5 trillion per day. The forex market is divided into currency majors, minors, and exotics. There you have it, a complete review of the best markets for day trading. Due to the increase in algorithms in the markets over the last 15 years, market transparency has greatly diminished.
EUR/USD is a common trade for beginners because there’s usually a lot of information available online about the pair. As we roll around the 24-hour clock, we have the Asian markets opening first. Then the European markets open next with a little bit of overlap between the Asian markets closing and the European markets opening. Lastly, the American markets open and there’s quite a lot of overlap between the European markets closing and the American markets opening. Traders often email me saying that such-and-such happened at this particular time in the Emini.
Some markets are open around the clock, such as the forex market for example. On the other hand, stock and futures markets follow the open market hours of the exchanges where they’re traded, but many brokers offer trading in pre-market and post-market hours. Since day traders open a relatively large number of trades every day, trading costs is another important consideration when choosing a market to day trade.
Our products are also provided for informational purposes only and should not be construed as personalized investment advice. All data on this site is direct from the CFTC, SEC, Yahoo Finance, Google and disclosure documents by managers mentioned herein. Trend Following™ assumes all data to be accurate, but assumes no responsibility for errors, omissions or clerical errors made by sources. As we have seen, to be a good day trader you don’t need to know all the assets on the market, it’s better to focus on one or two of them and understand the mechanics.
Live Trading with DTTW™ on YouTube
However, the market follows the open market hours of the exchange where the stocks are trading, and trading on pre-market and post-market hours can be quite risky. The main day trading markets are futures, forex, and the stock market. Theoptionsmarket is also popular, although more so with swing traders . Most people are aware of the stock market; futures and forex are less well known, but can also be day traded. If you have ample capital, then stocks, forex or futures are all great day trading markets.
Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. The pair is perhaps one of the most difficult exchange rates to predict, because of the close but uncertain link between the economies. The run up to Brexit caused a highly volatile price for EUR/GBP, and as the UK heads for a deeper recession than the Eurozone, it’s likely the pound will suffer more losses against the EUR. It’s also worth bearing in mind that as oil is priced in US dollars, if the price of oil rises, it’s likely that the value of the Canadian dollar will strengthen compared to the US dollar. First, the dollar normally weakens when oil rises, because more dollars are being converted into other currencies to buy oil.
As Singapore is one of the largest financial hubs in Asia, trading the USD/SGD pair is seen as a great way to get exposure to the country’s strong economy and the entire continent. More recently, the leading factor to monitor when trading the USD/CNY pair is US-China tensions, which have flared up for a number of reasons over the years. For example, in August 2022, US House Speaker Nancy Pelosi visited Taiwan, which caused Beijing to suspend US-China climate talks and cut off high-level military communication channels. Historically, the value of the yuan has been low compared to the US dollar because the Chinese government has artificially driven down the price to keep its exports competitive on the global market. Consider the Euro and DAX if you live in the US and want to trade before your day job, or you live in Asia and want to trade after your day job.
There are 3 major trading time zones
So that’s a benefit, of learning how to trade forex, which will speed up your learning. You can trade in a much smaller amount to suit your risk profile. This does not mean every alternative will be good for every individual, but using a combination of markets or fine-tuning how we interact with those markets can have an impact on results.
The stock market is another market that is very popular among day traders. As a rule of thumb, the more liquid a market is, the less volatile its price movements as a large number of buyers and sellers compete at every price level. As a day trader, you may be familiar with several asset types.
For some individuals, this may mean they need to switch markets as their success is unlikely if they continue to do what they are doing. Many markets are available to anyone with a simple internet connection. Michael Logan is an experienced writer, producer, and editorial leader. As a journalist, he has extensively covered business and tech news in the U.S. and Asia. He has produced multimedia content that has garnered billions of views worldwide.
Some of the best ones in this regard are cryptocurrencies and some stock types. Stocks, on the other hand, are open for a small window of time. In most countries, the market is usually open for less than 10 hours per day. Therefore, at times, depending on your time zone, it may be a bit difficult to trade American equities. JumpstartTrading.com does not track the typical results of past or current customers.
This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is financial, investment, legal, tax or other advice and no reliance should be placed on it. Futures contracts are quite liquid, especially contracts on popular and highly-traded commodities and metals.
Obviously there are exceptions, like FOMC announcements that tend to be volatile, but be careful during this 4-hour window. Traders in the forex market can get started with as little as $100 with some brokers, although starting with at least $500 or $1,000 is recommended. The forex market is where one global currency is exchanged for another.
These often include the major currency pairs, that are crossed with the US dollar, such as EUR/USD, GBP/USD, USD/JPY, and USD/CHF. Volatility means that the market actually moves around quite a lot during the trading day. You don’t want to be stuck trading a dull market – you might go grab a coffee and miss the one big move of the day!
Trading access for futures market day trading is also an important consideration. Most trading platforms have specific requirements for approval of futures and options accounts, usually including a minimum balance of more than $2,000. All of this makes forex one of the best and most popular day trading markets. Although the best market to day trade depends on the trading plan and strategy of a trader, there are certain characteristics that make some markets better than others.
Certain strategies may also work better in certain markets, or at acertain time of day. Therefore, if you already have a strategy in mind —pick one market and focus on it. As a new trader it’s not suggested to flip back and forth between markets, but you may be able to trade in shifts depending on the time of day in which you plan to trade.
If so, read on, because we’ll show you which markets are best suited to your situation. Additionally, Trend Following™ in no way warrants the solvency, financial condition, or investment advisability of any security or instrument. In addition, Trend Following™ accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as a basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Our testimonials are the words of real clients received in real correspondence that have not been paid for their testimonials. Testimonials are sometimes printed under aliases to protect privacy, and edited for length.
Although there is no time limitation in 24 hours, timing is important in forex as well. The financial industry is extremely wide, with so many assets available for you to trade. Some of the most common assets are stocks, currencies, bonds, commodities, futures, and cryptocurrencies among others. The main downfall is the light regulation on Forex Brokers in terms of capital and margin requirements. One of the main reasons new traders fail is due to improper risk management and having access to huge leverage doesn’t help. If I were to ask a group of new traders what the best markets for day trading were, the majority of answers would be Penny Stocks, Forex or Cryptocurrencies.