Markets & symbol types, explained

The exchange rate between two currencies — you buy one currency and sell the other in a single trade. The largest, most liquid market in the world, open 24/5.

How it's traded: Retail traders almost always trade forex as a CFD or spot-margin product through a broker, or inside a forex prop-firm account. Costs come from the spread, commission (on raw accounts) and overnight swap fees.

Main risk: Leverage. Forex moves in fractions of a percent, so brokers offer high leverage (up to 1:500 offshore) — which turns small moves into large gains and losses. Overnight swaps also quietly eat swing positions.

A basket of stocks measured as one number — the S&P 500 tracks 500 large US companies, the NASDAQ-100 tracks the biggest tech names. You trade the index level itself, not individual shares.

How it's traded: Two main routes: index futures (ES, NQ — what futures prop firms trade) or index CFDs (US500, US100 — what CFD brokers offer). Same underlying market, different contract, costs and hours.

Main risk: Index moves compound fast around news (CPI, Fed) and session opens. Gaps over weekends and between sessions can jump past your stop — position sizing matters more than stop placement.

Physical commodities traded as financial contracts: precious metals like gold and silver, and energies like crude oil and natural gas. Gold doubles as a risk-off asset; oil is a news-driven market of its own.

How it's traded: As spot/CFD symbols at brokers (XAUUSD, USOIL) or as futures contracts (GC, CL) at futures prop firms. Contract sizes differ a lot — one gold future (GC) is 100oz, far larger than a typical CFD position.

Main risk: Volatility spikes on macro news and supply events. Oil especially can move violently on inventory data and geopolitics. Check margin requirements — commodity margins jump when volatility rises.

A standardized, exchange-traded contract (CME and others) to buy or sell an underlying — an index, oil, gold — at a set date. Centrally cleared, with transparent pricing and volume data.

How it's traded: Through futures brokers and futures prop firms, on platforms like Tradovate, NinjaTrader, TradingView and Quantower. Contracts expire and roll; each tick has a fixed dollar value (e.g. ES = $12.50/tick).

Main risk: Fixed tick values cut both ways: one ES point is $50 per contract, so oversizing is punished instantly. Real-time futures data usually costs extra, and contracts must be rolled before expiry.

An over-the-counter contract with your broker that pays the difference between entry and exit price. You never own the underlying — it is a pure price bet, available on forex, indices, metals, stocks and crypto.

How it's traded: Through CFD brokers (most retail brokers outside the US). Flexible position sizes, no expiry, and one account covers many markets. Your counterparty is the broker itself — which is why regulation matters so much.

Main risk: Counterparty and cost risk: you depend on the broker's solvency, execution and pricing. Overnight financing charges add up on held positions, and high leverage is the classic account-killer. CFDs are banned for US retail traders.

Ownership shares in companies, and ETFs — funds that trade like a single share and track an index or theme. The classic long-term investing vehicle, also traded short-term as CFDs.

How it's traded: Real shares through stock brokers (ownership, dividends, voting) or share CFDs through CFD brokers (price exposure only, leverage available, no ownership). Know which one you actually hold.

Main risk: Single-company risk: earnings, guidance and gaps. A stock can gap 10%+ overnight past any stop. With share CFDs you add leverage and financing costs on top of the company risk.

Digital assets trading 24/7 on exchanges. You can own the actual coins (spot) or trade price exposure via CFDs, futures and perpetuals. Ownership brings a unique question the other markets do not have: custody.

How it's traded: Spot on exchanges (then stored in a wallet — custodial or self-custody), or as derivatives at brokers and crypto exchanges. If you hold real coins, where they are stored matters as much as the price you paid.

Main risk: Extreme volatility plus custody risk. Exchange failures have wiped out balances (not just prices). For meaningful holdings, self-custody with a hardware wallet is the standard answer — with the seed-phrase responsibility that comes with it.