What is the financial market?

• A financial market forms part of a global ecosystem and refers in general to any marketplace where financial assets are bought and sold.
  There are physical stock exchanges in major financial centres, such as London, New York, Chicago, Tokyo, Sydney, Moscow etc. The trading sessions take place within the local business hours of these cities between Monday and Friday.
  Trading can be a physical purchase of assets or through derivatives, both exchange and OTC traded, allowing traders from all over the world to buy and sell a variety of currencies and commodities via online platforms.

• Trading Sessions

  A day on the financial market is divided into global trading sessions: the opening hours of the largest stock exchanges in the world. They open during daytime hours in the respective time zone of each exchange.
  A Trading day begins with the Pacific session, then the Asian one overlaps it; the London session takes over and finally the American one.
  In the hours when sessions overlap, the quotes change particularly rapidly, due to increased volatility (i.e. more market participants).
  When the Sydney stock exchange opens at the beginning of the week, it is still early morning in Tokyo, a Sunday evening in London, and a Sunday afternoon in New York.
  Upon opening, asset quotes show a reaction to the events that occurred over the weekend. The behaviour of prices during this time is very difficult to predict.
  Therefore, it is not recommended to leave positions open over the weekend. It would be much better to close them on Friday evening if you do not want to experience an unpredictable stop out caused by the gap in pricing over the weekend.

• How to trade on the FX markets?

  The financial market is divided into categories: stock market, metals, bonds, futures etc. But the most popular is the currency market – Forex (Foreign Exchange).
  With daily volumes exceeding $5 trillion, FX is the largest and most liquid financial market, and not traded on any centralised exchange, allowing traders, brokers and banks to participate.
  Now let's take a closer look at an example to help demonstrate the principle of making trades via an online CFD trading platform.
  FX is priced and available to trade 24/5, covering all exchange opening hours. The price of national currencies on the Forex market (for example, the US Dollar) reflects how the market perceives the current and future position of the national economy.
  If positive news is published, currency quotes will generally start to rise, whereas news that is perceived to be negative, will generally cause prices to fall.
  If you manage to open a ‘‘buy’’ trade via your online platform and wait until the price increases, you can make a profit, which will be added to your balance once the trade is closed. In cases where the forecast is not right and the chart goes down, your trade will be closed in the red.