You know what trading is. Now let us look at the five main markets you can trade and what makes each one unique. By the end, you will have a clearer idea of which market might suit your personality, schedule, and budget.
Stocks (Equities)
When you buy a stock, you own a tiny piece of a company. If the company does well, your shares become worth more. Some companies also pay dividends — regular cash payments to shareholders, like a share of the profits.
The main UK index is the FTSE 100 — the 100 largest companies listed on the London Stock Exchange. In the US, the big ones are the S&P 500 (500 largest US companies) and the NASDAQ (tech-heavy).
Example
You buy 50 shares of Tesco at £3.00 each (£150 total). Tesco reports strong Christmas sales. The share price rises to £3.40. Your shares are now worth £170. Additionally, Tesco pays a dividend of 4p per share, giving you another £2. Total gain: £22 on a £150 investment.
Forex (Foreign Exchange)
Forex is the trading of currency pairs. When you see GBP/USD = 1.2700, it means one British pound buys 1.27 US dollars. If you think the pound will strengthen against the dollar, you "buy" GBP/USD. If you think it will weaken, you "sell" it.
Forex uses specific terminology: a pip is the smallest standard price move (0.0001 for most pairs). A lot is the trade size — a standard lot is 100,000 units of the base currency. And leverage lets you control a large position with a small deposit (but amplifies both gains and losses).
Crypto
Cryptocurrencies are digital assets that run on blockchain technology. Bitcoin is the original and largest. Ethereum is the second largest and powers smart contracts. There are thousands of others — most of them worthless.
Crypto trades 24/7, has extreme volatility (20%+ daily moves are not uncommon), and is available through exchanges like Coinbase and Binance, or through traditional brokers offering crypto CFDs.
Warning
The FCA has warned that crypto is "high-risk and largely unregulated." Crypto exchanges have been hacked, projects have collapsed overnight (see: Luna, FTX), and scams are rampant. Only trade crypto with money you can genuinely afford to lose entirely.
Commodities
Commodities are raw materials: gold, silver, crude oil, natural gas, wheat, coffee. They are traded through futures contracts — agreements to buy or sell at a specific price on a specific date. As a retail trader, you typically trade commodity CFDs or spread bets rather than actual futures.
Indices
An index is a basket of stocks that represents a market or sector. The FTSE 100 tracks the UK's 100 largest companies. The S&P 500 tracks America's 500 largest. You cannot buy an index directly — you trade it through spread bets, CFDs, ETFs, or futures.
Comparison Table
| Market | Volatility | Hours | Min Capital | Complexity |
|---|---|---|---|---|
| Stocks | Medium | Exchange hours | £50+ | Low-Medium |
| Forex | Medium | 24/5 | £100+ | Medium |
| Crypto | Very High | 24/7 | £10+ | Medium-High |
| Commodities | Medium-High | Near 24/5 | £200+ | Medium |
| Indices | Medium | Near 24/5 | £100+ | Low-Medium |
Key Concept
There is no "best" market. Each has trade-offs. Stocks are intuitive (you understand companies). Forex offers flexibility (24/5 hours suit people with day jobs). Crypto is accessible but wild. Start with the market that interests you most — engagement matters for learning.
Risk Disclaimer: Trading financial markets involves significant risk of loss. The content on this page is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. You should not trade with money you cannot afford to lose. 70-80% of retail investor accounts lose money when trading CFDs and spread bets. Consider whether you understand how these products work and whether you can afford the high risk of losing your money.