Author: Keith Cotterill
Over the years Keith went on to create bespoke trading software to successfully trade commodities like Gold, Oil and Wheat, individual stocks, indices like the FTSE 100 and DOW as well as Forex.
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What are the financial markets?
The financial markets are a global business. Each day traders and investors buy and sell millions of different financial instruments around the world worth tril- lions of dollars.
What is traded in these markets?
Many different instruments are traded in the financial markets, the most popu- lar and common ones are as follows.
• Stocks – equities
• Bonds – government and corporate
Where are they traded?
Financial instruments are traded at designated exchanges around the world. The most famous being Wall Street. See the links section of tesstrader.com for a detailed list of all the major traded exchanges.
Who trades in these markets?
Market makers, financial institutions, banks, governments, professional specu- lators, hedge funds, floor traders, and pension funds trade in these exchanges. You will have seen the exchanges on many occasions on the TV. Floor traders are the ones wearing the bright coloured jackets.
There are two types of floor trader. The first trades his own account and is known as a local. The second is a floor broker, who executes trades on behalf of institutions and other brokerage firms. These floor brokers are the ones who fill off floor traders orders such as ours.
Two different approaches to trading
There are two primary ways to analyse and trade the financial markets. The first of these is known as fundamental analysis. The second approach is by using price charts, known as technical analysis.