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Choosing the Right Financial Instrument to Trade


For any trader about to enter the markets, a crucial part of the process is deciding on a suitable financial instrument to trade on. Choosing the right market can help traders significantly increase their trading potential. The financial market is made up of many hundreds of instruments across several asset classes. Each different type offers traders the opportunity to take advantage of price movements and to potentially make a profit on their investment. Before selecting a financial instrument to trade on, there are many factors a trader should consider, including liquidity, volatility, transaction costs, and the information available.

What is a Financial Instrument?

In simple terms, a financial instrument is an asset or capital package that can be traded. It represents monetary contracts between parties, which can be created, traded, modified, and settled. There are two main types of financial instruments: cash instruments and derivative instruments.
Cash Instruments

Derivative Instruments

Tips on Selecting a Financial Instrument

When it comes to choosing a financial instrument to trade, there is such a wide choice, meaning it can seem a tricky task, especially when first starting out in the world of trading. However, we have put together a few tips and factors to consider when selecting financial instruments, to help with what is an important decision.
Liquidity

Volatility

Costs

Information

Financial Instruments Available with IronFX

IronFX offers traders access to more than 300 tradable instruments across 6 asset classes, including forex, metals, indices, commodities, futures, and shares. It is possible to trade the world’s largest markets with the deepest liquidity pool, along with hundreds of CFD assets. Forex

Metals

Indices

Commodities

Futures

Shares

#source


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