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Top Financial Markets To Trade In 2020

Reading time: 40 minutes

020 is set to be an historic year for financial markets with Brexit and a US presidential election taking centre stage. Whether you are planning to trade the 24-hours a day, five days a week Forex market, buy and sell stocks and shares from 15 of the largest stock exchanges in the world or speculate on commodity markets like gold, silver and oil - 2020 is the year to get started.

In this article, you will learn all about the different types of financial markets available to trade on, how they've changed over the years and which ones could be worthwhile focusing on in 2020. You will also learn how to get started in financial markets trading completely risk-free - in just three simple steps - and a cutting-edge online trading strategy you can start using straight away.

Financial Markets Explained

The financial market is a marketplace where financial securities are traded on both a national and global level. Traders buy and sell those securities to gain potential profits while trying to keep their risk limited.

Many traders tend to focus on one financial market, for example, trading stocks or CFDs, but it is important to have an overview of all the financial markets available to trade on because they can impact each other. This section reviews the most important financial markets and explains their global role.

What are the financial markets?

The financial market is, at its core, not much different to other markets, where goods and produce are bought and sold. But rather than the exchange of vegetables, clothing, or computers for the local or national currency, the financial markets are focused on the buying, selling and holding of financial securities, products and instruments. The financial market has expanded exponentially over the past few decades and now offers many types of financial instruments.

The different types of financial markets

  • Forex - also known as the Foreign Exchange market or FX.
  • Capital markets - such as stocks and bonds markets.
  • Derivatives markets - such as CFDs (Contracts for Difference).
  • Commodity markets - such as gold, silver and oil.
  • Money markets - such as short-term debt.
  • Cryptocurrency markets - which include Bitcoin and altcoins.
  • Mortgage market - which offers long-term loans.
  • Insurance market - which transfers risk for a premium.

Some of these financial markets are by their own nature more long-term focused, short-term oriented, or a mixture of both. The mortgage market, for instance, is where many long-term loans take place, whereas money markets are focused on the short-term. Forex, stocks, commodities and CFDs can be traded both short and long-term. Professional traders can decide to engage in investments or trading, depending on their own approach and trading style.

If you would like to improve your knowledge of financial market analysis and financial markets trading then register - for FREE - for the Zero to Hero online course which will help you learn to trade the Forex and CFD market, from set-up to execution, in just 21 days. Click the banner below to register for FREE!

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The role of financial markets

The financial markets serve an important purpose for the economy and offer six basic functions:

  • Price determination
  • Liquidity
  • Efficiency (costs like transaction costs)
  • Traditional borrowing and lending
  • Information about the flow of funds
  • Risk sharing

Financial institutions help to facilitate the flow and movement of funds within the global markets and the overall financial system. These institutions include commercial banks, investment banks, central banks, insurance firms, brokers and even non-banking financial institutions (such as credit unions).

The role of the financial markets has remained the same throughout history. With the advent of technology, however, international financial markets have become more intertwined. This has helped the global financial markets system to grow and expand throughout history.

Financial Markets Today

Generally speaking, the financial markets has helped to support international trade and the overall global economy for the past 100 years. Especially in the last 25 years, wherein the financial markets has become even more complex, sophisticated, and important.

At the start of the 21st century, global financial markets became more dynamic and changed rapidly. Nowadays there are fewer exchange controls, capital controls, more global financial transactions, and more payment systems in general.

There is also rapid movement in terms of international capital flows, the development of new financial instruments (such as cryptos), and new digital technologies. Overall, this is leading societies to more open, advanced financial markets and methods.

Although the above trends are valid for the financial markets in general, each financial market has its own separate trend. We will discuss a few trends for the Forex and stock markets.

The Forex market

The Forex market has become very popular over the past few decades and has seen an enormous growth of volume in the last 30 years. Here is the trend explored in greater detail:

  • 1977 - $5 billion
  • 1987 - $600 billion
  • 1992 - $1 trillion
  • 2001 - $1.5 trillion
  • 2007 - $3 trillion
  • 2010 - $4 trillion
  • 2013 - $5.3 trillion
  • 2017 - $5.5 trillion

As you can see, the Forex volume has increased by a factor of 1000 within 40 years. It has also increased by 267% between 2001 and 2017, and by 40% between 2010 and 2017. These impressive growth figures show just how important the foreign exchange market has become.

The stock market

Another trend could be found in global stock markets, where the US stock markets have arguably become much more important compared with other parts of the world. The US stock market was a major winner in the 20th century, according to the book Triumph of the Optimists (2002), written by Elroy Dimson, Paul Marsh, and Mike Staunton. Their research indicates that three important changes have occurred within the last 100 years:

  • The US has achieved market dominance.
  • The exchanges were consolidated.
  • Secular (market activities occurring over the long term) sector rotation occurred.

Here are some graphs that display information pertaining to the world's stock markets in both 1899 and 2016:

Financial Market: World Financial Stock Market

Source: Yahoo Finance 27 November 2019


These graphs show how the US stock market grew from 15% at the end of 1899 to 53.2% at the end of 2016. Their share more than tripled.

The UK dropped from 25% to 6.2% and even Germany dropped from 13% to 3.1%. Some countries disappeared from the list, whereas others entered the list for the very first time.

Canada was not on the list in 1899 but had a 2.9% share in 2016. However, most notably Japan was not on the list either but rose to 8.4% by the end of 2016.

The stock market's industry sectors

Business sectors changed substantially between 1900 and 2017. Sectors that were very strong in 1900, such as railroads, lost substantial market share one century later.

Financial Markets: Industry weightings Source: Yahoo Finance 27 November 2019

In the United States, railroads dominated the US stock market with an industry weighting of more than 50%. In 2017, this weighting fell to just a few percentage points. However, other industries such as banks, finance and health rose significantly while some sectors that were large in 1900 did not have any market share in 2017.

The trends of the past century do not have to be the trends of this century. Luckily traders do not need to know what the future will look like 100 years from now. They can choose to simply trade on a shorter time scale. Ultimately, it is simpler to understand what the financial markets might be doing in the short-term rather than in the long-term, especially when analysing an entire century.

Did you know that with Admiral Markets you can trade CFDs on publicly listed companies from a wide range of sectors such as banking stocks, technology stocks or energy stocks? In fact, with the MetaTrader 5 trading platform, you can also view different timeframes of share prices from 1-minute charts to monthly charts, helping you to trade both short-term and long-term.

We will go through how to start trading financial markets and how to place a trade on the MetaTrader 5 trading platform provided by Admiral Markets in a later section. However, you can start your free download now so you are well prepared to follow through the examples. To do this, simply click on the banner below:

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The table below shows how the US stock market sector weightings have changed over the years:

U.S. Sector Weightings - 1900

Sectors

1900

2000

Difference

Railroads

62.8%

0.2%

-62.6%

Banks and Finance

6.7%

12.9%

6.2%

Mining

0.0%

0.0%

0.0%

Textiles

0.7%

0.2%

-0.5%

Iron, Coal, Steel

5.2%

0.3%

-4.9%

Breweries and Distilleries

0.3%

0.4%

0.1%

Utilities

4.8%

3.8%

-1.0%

Telegraph and Telephone

3.9%

5.6%

1.7%

Insurance

0.0%

4.9%

4.9%

Other Transport

3.7%

0.5%

-3.2%

Chemicals

0.5%

1.2%

0.7%

Food Manufacturing

2.5%

1.2%

-1.3%

Retailers

01.%

5.6%

5.5%

Tobacco

4.0%

0.8%

-3.2%

Sectors Small In 1900

4.8%

62.4%

57.6%

Total

100.0%

100.0%


Source: Investopedia - ''Triumph of the Optimists - Dimson, et al.''

U.S. Sector Weightings - 2000

Sectors

2000

1900

Difference

Information Technology

23.1%

0.0%

23.1%

Banks and Finance

12.9%

6.7%

6.2%

Pharmaceuticals

11.2%

0.0%

6.2%

Telecommunications

5.6%

3.9%

1.7%

Retailers

5.6%

0.1%

5.5%

Oil and Gas

5.2%

0.0%

5.2%

Diversified Industrials

5.1%

0.0%

5.1%

Insurance

4.9%

0.0%

4.9%

Utilities

3.8%

4.8%

-1.0%

Media and Photography

2.5%

0.0%

2.5%

Breweries and Distilleries

0.4%

0.3%

0.1%

Mining

0.0%

0.0%

0.0%

Sectors Small In 2000

19.7%

84.2%

-64.5%

Total

100.0%

100.0%


Similar sectors in base year of 2000 and 1900

Source: Investopedia - ''Triumph of the Optimists - Dimson, et al.''

The Different Types of Financial Markets

This section will provide an overview of the different types of financial markets that were mentioned earlier.

The Forex market

As mentioned before, the growth of the Forex market and its volume has been impressive in the last 40 years, starting from $5 billion in 1977 to more than $5 trillion in 2017. There are some key factors that are contributing to this trend:

  • Advanced computers.
  • More price volatility.
  • Better access to financial markets via brokers.
  • More trading tools and access to information.

Forex is a type of market that is popular with traders who are looking for short and medium-term trading opportunities as it is opened 24 hours a day, 5 days a week. You can learn more about trading the Forex market in the Forex 101 online trading course offered by Admiral Markets. Click the banner below to register for FREE!

Forex 101 - Free Online Forex Trading Course

The derivatives market

Derivatives are securities that are connected to an underlying asset and are sometimes used as a hedge against price changes. Options, futures and CFDs are all examples of derivatives. Speculators can use these instruments to hedge against risk, or to take on risk in order to potentially make a financial gain.

The commodity market

The commodity market comprises of hard commodities such as gold, oil, and soft commodities such as agricultural and livestock products. Investors and traders can take part indirectly in a commodity by purchasing stocks or directly by buying an option, future or a CFD.

Capital markets

Capital markets include the stock and bond markets (both private and public sector bonds). There is a primary market, where companies and governments issue new securities, and a secondary market, where previously issued stocks and bonds are traded.

Insurance and mortgage markets

Mortgage markets revolve around long-term loans that are provided for buying a property. These loans can be traded on secondary mortgage markets. Insurance markets involve the insurer and the insured, where the risk is transferred for a premium. Insurance companies have substantial cash reserves which they invest in stocks, bonds, and derivatives markets.

Money markets

Money markets are focused on very short-term debt, and involve local banks and central banks. Banks loan to each other for short-term liquidity purposes. The central bank often acts as the lender of last resort.

The cryptocurrency market

Although it is a new market, Bitcoin and other Altcoins captured the headlines at the end of 2017 when strong price volatility caused a surge in prices. The blockchain technology and mining system caused an increased interest in the cryptocurrency market.

How this market will continue, how it will shape the financial markets in general, and whether it can create more value for consumers and the financial system or not is still something that will be determined in the next few years.

Let's take a look at how some of these markets are shaping up for 2020.

Top Financial Market Trends in 2020

Across the 3,000 plus markets Admiral Markets has to offer, there are plenty of important financial market trends for traders to keep an eye out on. Below, you will find a list of just some of these markets, broken down into the following categories:

  1. The Forex market
  2. The stock market
  3. European markets
  4. Asian markets
  5. US markets

It is important to note that successful trading is not just about spotting the best market trend. After all, trends can change. Risk management is a key ingredient for long-term trading success. You can learn more about this in the Risk Management for Forex and CFD Trading article.



The Top Forex Market Trend For 2020

#1 Should currency traders get ready for a big move in the US dollar? JP Morgan's Global FX Volatility Index suggests so

In the middle of 2019, a rarely known index which measures currency volatility warned of an imminent explosion in the US dollar. Over the past 25 years, the JP Morgan Global FX Volatility Index has only created three troughs with the US dollar exploding at least 10% each time (sometimes up and sometimes down).

The same volatility index is now trading at its lowest level in five years, making a new trough and sounding the alarm bells once again. The index created by JP Morgan is simple. Its aim is to measure the volatility of Forex options across a basket of major and emerging currencies. As it sits at a five-year low it means the volatility of the currency market is historically quite low.

Even a similar index tracked by Deutsche Bank is sitting at its lowest level in five years. Low-interest rates across the world has ramped up demand for equities which has helped lift global stock markets higher but push down currency market volatility. So why is this important?

According to data compiled by Bloomberg, each time the JP Morgan Global FX Volatility Index has been trading close to where it is now, the US dollar (specifically the US Dollar Index Futures Contract), has exploded around 10% over the next six months. However, this is simply a measure of volatility - not direction! It seems it's worth exploring the US dollar index in more detail.

How to trade the US dollar index

The US dollar index measures the value of the US dollar against a basket of foreign currencies and is widely watched and traded on by traders and fund managers. You can learn more about it in the How To Trade The US Dollar Index article.

Since 2017, the US dollar has been on a steady rise higher thanks to accommodative policy actions from the US Federal Reserve (a.k.a the Fed). As the Fed increased interest rates, the US dollar became very attractive for domestic and international buyers, as the monthly chart of the US dollar index shows below:

Financial Market: USDX Z9 Monthly chart

Source: Admiral Markets MetaTrader 5 Supreme Edition - USDX_Z9, Monthly Chart - Data range from 1 May 2008 to 28 November 2019, accessed on 28 November 2019 at 11:47 am GMT. Please note: Past performance is not a reliable indicator of future results.


However, throughout 2019 the Fed embarked on a series of interest rate cuts after becoming concerned about US President Donald Trump's trade war with China. In 2019, the US dollar index tried to break through the $98.78 price level on six different weeks with no luck closing above it and carrying on pushing higher. In effect, it created a level of horizontal resistance (shown by the horizontal black line in the weekly chart below). This is a type of trading indicator used by many traders.

You can learn more about this in the Support and Resistance Indicators article.

Financial Market: USDX Z9 Weekly Chart

Source: Admiral Markets MetaTrader 5 Supreme Edition - USDX_Z9, Weekly Chart - Data range from 28 January 2018 to 28 November 2019, accessed on 28 November 2019 at 12:47 pm GMT. Please note: Past performance is not a reliable indicator of future results.


So far, the US dollar index hasn't moved 10% as has happened in the past when the JP Morgan Global FX Volatility Index has been at its current, historically low level. If the global economy starts to improve there may be accommodative policy actions from other major central banks. However, the US Federal Reserve may be limited on what they can do with interest rates due to the 2020 US presidential election.

From a technical analysis perspective, traders will be looking for confirmation of a trend when price breaks through the ascending triangle chart pattern which has formed on the weekly chart, as shown below:

Financial Marke newst: USDX Z9 Weekly Chart

Source: Admiral Markets MetaTrader 5 Supreme Edition - USDX_Z9, Weekly Chart - Data range from 28 January 2018 to 28 November 2019, accessed on 28 November 2019 at 12:59 pm GMT. Please note: Past performance is not a reliable indicator of future results.


A break and hold above the horizontal resistance line could suggest buyers are more willing to step in and potentially lift the index towards its 17-year high of $103.80 made on the 1st of January 2017, representing a +5% move higher.

However, a break and hold below the lower support line of the ascending triangle formation could attract more sellers into the market, pressuring the price back down to the lows of early 2018. A move back to this level would amount to a near 10% drop in price.

With a technical, fundamental and political convergence for the US dollar in 2020, it could be a very interesting year for currency traders. How will you be trading it?

One to get started is by practicing your trading skills, or testing your ideas and theories in a risk-free trading environment. Admiral Markets provides you with the ability to open a FREE demo trading account so you can practice, test and improve your trading skills in a completely risk-free environment.

Click on the banner below to open your free demo trading account today!

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The Top European Financial Market Trend For 2020

#1 Will the DAX 30 continue its multi-year rally higher?

It was only in 2018 that Germany's DAX 30 stock market index snapped a six-year winning streak and entered into a bear market. The index declined over 20% since its record high on 23 January 2018. However, in 2019 the German economic powerhouse roared back into life sending the DAX 30 stock market index nearly 30% higher in 2019.

Is the index on track to create a multi-year rally higher throughout 2020? Some analysts believe so with Barclays rebalancing its stock market focus away from the US and towards Europe for 2020. As Emmanuel Cau, Barclays' head of European equity strategy, wrote in a recent strategy report: "We find current European equity valuations attractive compared to the US."

The German stock market could also be helped by a supportive European Central Bank who announced the start of another round of quantitative easing in September 2019. This involves the bank buying up 20 billion euros worth of assets every single month to help stimulate the ailing Eurozone economy.

It's the same policy action global central banks took after the 2008 financial crisis but hasn't gone down well with many of the Eurozone countries' finance ministers. Nonetheless, the long-term chart of the DAX 30 shows a clear uptrend with buyers firmly in control:

Financial Market: DAX30 Monthly Chart

Source: Admiral Markets MetaTrader 5 Supreme Edition - DAX30, Monthly Chart - Data range from 1 June 2005 to 28 November 2019, accessed on 28 November 2019 at 3:45 pm GMT. Please note: Past performance is not a reliable indicator of future results.


In the chart above, it is evident that the price of the DAX 30 index has been trading inside a long-term chart pattern called a trend channel (shown by the ascending blue lines). Traders will often use these levels as support and resistance. As price rejected and bounced higher from the lower trend channel in early 2019, traders will be looking for price to travel towards the top of the trend channel.

While the price of the DAX 30 index may not travel there in one straight line, there is a strong fundamental and technical to suggest 2020 could be the year the index breaks to new all-time high price levels. How will you be trading it?

Asia Financial Market Trends For 2020

#1 Is the Hong Kong stock market too cheap to ignore?

Once dubbed the 'gateway to China' and Asia's top financial markets hub, Hong Kong entered its first recession in 2019 for more than a decade. Violent protests in reaction to the government passing a bill that would allow suspects to be extradited to mainland China has sent the country's tourism industry into disarray.

In August 2019, arrivals to the city hit their worst level since the 2003 SARS crisis. Luxury fashion chain Burberry said its sales in the country have fallen more than 10%. Official figures show the economy shrank 3.2% in the July to September period, entering the technical definition of a recession (economic contraction for two quarters in a row).

Some economists such as Iris Pang from investment bank ING has forecasted the economy could shrink in all four quarters of 2020. However, there are some analysts who believe that Hong Kong is still the best place for international business due to four important factors:

  1. Its ease of doing business.
  2. Its unique role as the link between China and the rest of the world.
  3. The rule of law.
  4. The lack of any viable alternatives.

In fact, Hong Kong gained a massive boost after Alibaba listed shares on the Hong Kong Stock Exchange raising $11 billion in equity. For a city whose stock market is worth 12 times its gross domestic product, a happy financial hub is very important.

The weekly chart of the Hang Seng 50 index shows a long-term consolidation but a stock market that is highly undervalued considering US stock markets made record highs in 2019 with European stock markets not too far behind.

Financial Market: HSI50 Weekly ChartSource: Admiral Markets MetaTrader 5 Supreme Edition - HSI50, Weekly Chart - Data range from 11 September 2016 to 28 November 2019, accessed on 28 November 2019 at 4:45 pm GMT. Please note: Past performance is not a reliable indicator of future results.


As the price of the Hang Seng 50 index is trading very close to the lower support line of the long-term consolidation chart pattern, traders will be very keen to see how buyers and sellers react at this point.

Inevitably, there will be some longer-term, value-based investors looking to snap up some Hong Kong shares at very low prices. However, there is also the risk the price could break below this lower support line and continue to sell-off, especially if China does not find a way to calm things down and improve the political situation in Hong Kong.

While fortune may favour the brave, it's a market that requires patience and the combination of a change in the political and fundamental situation which may take time. Nonetheless, the Hang Seng 50 index is a compelling Asian financial market to focus on for 2020. Does it make it your watchlist?

US Financial Markets Trends For 2020

#1 Could central banks fuel a Gold-rush in 2020?

Since 2010, world central banks turned from being net sellers of gold to net buyers of gold. In fact, the World Gold Council (WGC), has shown that demand for gold in the first quarter of 2018 was up 42% year on year. This helped fuel a gold-rush in the second half of 2018 which continued in 2019. Will it continue in 2020?

There are many fundamental reasons to suggest that gold prices could push higher this year, such as the escalating tensions from the ongoing trade dispute between the US and China, the 2020 US presidential elections and continued worries about economic growth in a time central banks have run out of new measures to stimulate global growth.

In the third quarter of 2019, gold ETFs ( Exchange Traded Funds), saw its largest inflow since the first quarter of 2016, according to the World Gold Council. While the fundamental landscape could change over the course of the year, the price chart of gold is showing some interesting characteristics, as shown below:

Source: Admiral Markets MetaTrader 5 Supreme Edition - Gold, Weekly Chart - Data range from 11 September 2016 to 28 November 2019, accessed on 28 November 2019 at 4:45 pm GMT. Please note: Past performance is not a reliable indicator of future results.


The gold market rally from 2018 continued well in 2019 until finally reaching resistance around $1,529. In the chart above, this resistance price level is shown by the top horizontal black line.

If the price of gold can break through this level, there could be significant upside back towards the all-time high price level of $1,923 made in September 2011. This situation could be a good hedge against the possibility of a falling stock market. Many analysts are bullish on stock markets throughout 2020. If they did turn lower, however, investors may flock towards safe-haven assets like gold.

Does gold make into your portfolio watchlist for 2020? If so, you can learn more by reading the How To Start Online Gold Trading article.

Another great way to learn about financial markets trading is to see professional traders analyse the markets live, in real-time. The Admiral Markets Trading Spotlight webinars run three times a week and our professional traders cover a range of topics including how to perform technical analysis and how to identify trading opportunities on different asset classes. To reserve your spot in these complimentary webinars, simply click on the banner below:

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Now you are armed with just a few of the top financial markets to trade in 2020, how do you actually get started? Let's go through a step by step guide on how to start financial markets trading today.

How To Start Financial Markets Trading

While not all types of financial markets are available to speculate on, traders with an Admiral Markets account can trade on more than 3,000 different markets across the Forex market, Stock CFDs, Commodity CFDs, Cryptocurrency CFDs, Stock Market Index CFDs and more.

Before we look at the top financial markets to trade in 2020 it will be useful to first open up an Admiral Markets account (live or demo) and download your free MetaTrader trading platform so you can view the list of top markets to trade in 2020 from your own charts.

To start trading the financial markets, follow these three simple steps:

  1. Open an Admiral Markets trading account.
  2. Download your free trading platform.
  3. Open a trading ticket and take your first trade!

How to open your Admiral Markets trading account

If you haven't done so already you can follow these steps to open a trading account with Admiral Markets. If you already have one, feel free to jump to the next section on how to download your free trading platform.

To open a live or demo trading account simply visit the Admiral Markets homepage and click on the green button labelled Create Account:

financial markets trading: Admiral Market demo account

To sign up for a live or demo trading account simply fill in the details required such as your name, email and password:

financial markets trading: demo account sign-up

Once this is done you will have instant access to the Trader's Room! From here, you can open live or demo accounts:

financial markets trading: demo account or live account

After clicking the green button labelled Open Live Account, you can select the account you wish to open. The Trade.MT5 account is one of the most popular types of trading accounts as it allows you to download the MetaTrader 5 trading platform and trade on multiple asset classes.

You can learn more about the account types in the Best CFD and Forex Trading Account article.

financial markets trading: opening a new live account

From here you can open your chosen Admiral Markets trading account after filling out an application, uploading the required documents and going through a verification process. Once this has been done, and your application has been approved, you are ready to download your MetaTrader 5 trading platform.

How to download your MetaTrader 5 trading platform

From the Trader's Room homepage, navigate to the bottom and select the MetaTrader 5 for PC or MetaTrader 5 for Mac download links:

financial markets trading: MetaTrader 5 trading platform

Simply follow your computer's prompts to complete the download of your MetaTrader 5 trading platform provided for free by Admiral Markets.

financial markets trading: MetaTrader 5 Trading platform

An example of the MetaTrader 5 trading platform provided by Admiral Markets, showing the price chart of Apple shares, the MACD and Stochastic trading indicators, a list of symbols showing the different stock market regions available and an open order ticket.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and do not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.


How to place a trade in the MetaTrader 5 trading platform

Open up your MetaTrader 5 trading platform provided by Admiral Markets and follow these steps to place a trade:

  1. Open the Market Watch window by selecting View from the menu at the top of the platform or by pressing Ctrl+M on your keyboard. This will open up a list of tradable symbols on the left side of your chart.
  1. Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
  1. This will then open the window shown below which details all the markets available for you to trade on. From here you can add a wide variety of markets to your Market Watch window by selecting them and clicking Show Symbol.

financial markets trading: MetaTrader 5 trading platform example

An example of the MetaTrader 5 trading platform provided by Admiral Markets showing the Symbols window.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and do not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.


After clicking the OK button in the Symbols window you can now view the different instruments in the Market Watch window. To view a price chart of a particular market, simply left-click on it in the Market Watch window and drag it onto the chart area. From here you can now open up a trading ticket:

  1. Right-click on the chart.
  2. Select Trading.
  3. Select New Order, or press F9 on your keyboard.
  4. A trading ticket will open for you to input your entry price, stop loss and take profit levels and your share trading size (volume).

financial markets trading: Selecting trading on MetaTrader 5

An example of the MetaTrader 5 trading platform provided by Admiral Markets showing a trading ticket.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and do not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.


To learn more about the MetaTrader 5 trading platform, feel free to watch the video below:

Now that you know more about the types of global financial markets available to trade on, how to access financial market data and how to view price charts and trading tickets of different markets the next step is to focus your efforts on the best possible market trends.

The Financial Markets Online Trading Secret For 2020

Having the right trading tools and products to participate in the financial markets is essential for every aspiring or seasoned trader. They can be broken down into two areas: platform and product.

Your trading platform

Whether you are a short-term or long-term trader, having the ability to view historical buying and selling activity in the markets you want to trade is essential. The charts which show this level of activity can often exhibit repeatable and predictable patterns that traders use to help in their decision making.

However, what is even more important is having the ability to trade directly off the chart so you have 'all in one access'. The MetaTrader platform is arguably one of the best trading platforms used by financial market traders.

By now you should have downloaded one of the free MetaTrader trading platforms provided by Admiral Markets listed below:

  • MetaTrader Supreme Edition (A custom plugin for MetaTrader 4 and MetaTrader 5, created by Admiral Markets and professional trading experts)

If you are looking to supercharge your trading for 2020 then consider boosting your MetaTrader trading platform to the MetaTrader Supreme Edition by downloading the free Admiral Markets custom plugin.

This will enable you to gain access to more features such as a correlation matrix, global opinion widget, a mini terminal for advanced orders and a wide range of advanced trading indicators. MetaTrader Supreme Edition users can also access automated analytics and analyst research from Trading Central, such as the Trading Central Featured Ideas™ indicator and the Trading Central Technical Insight™ indicator, completely free, as shown below:

financial markets trading: MetaTrader 5 Supreme edition

A screenshot of the MetaTrader 5 Supreme Edition trading platform provided by Admiral Markets showing the Trading Central Featured Ideas™ indicator.


To upgrade your MetaTrader trading platform to the Supreme Edition completely FREE, simply click on the banner below:

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Your trading product

Whether you are trading the Forex market or stock market, having the ability to buy and sell a particular market could be advantageous in ever-changing market conditions. Trading via CFDs (Contracts for Difference) allows traders to speculate on the rise and fall of a market - without ever owning the underlying asset.

There are also some other benefits to trading via CFDs, such as:

  • Leverage - a retail client can trade positions five times their balance. A client who is categorised as a professional-client can trade positions twenty times their balance.
  • Trade in any direction - Go long or short on any stock. No extra charges on short sales.
  • Access global financial markets such as Forex, Stock CFDs, Commodity CFDs, Index CFDs and more.

Now you are armed with some of the best tools and ideas in the business let's go through a simple to use online trading strategy for the financial markets.

Online Trading Strategies for 2020

Admiral Markets offers a huge library of trading indicators through the MetaTrader platform. With so much choice available, finding the right ones for you will require some trial and error, so give a demo account with MetaTrader a try. The important part is to keep it simple.

Below, we go through how to use a combination of different indicators in a trading strategy so you have a solid foundation to build on. Whether you are trading around market news, the stock market, the CFD market, or the Forex market, having a plan can help you structure your trading time wisely.

Trading Moving Averages & Price Action

Traders need two things before executing a trade:

  1. An indication of the future direction of the market - a.k.a 'the trend'
  2. A signal to time a trade that provides entry, stop loss and target levels

Moving averages are a useful trading indicator to help identify the trend of the market as they show the average price of the market over a defined period of time. On the daily chart timeframe, commonly used moving average time periods are the 10, 20, 50, 100 and 200-period moving averages.

Financial Markets: MetaTrader 5 Supreme edition DJI30 Daily Chart

Source: Admiral Markets MetaTrader 5 Supreme Edition - DJI30, Daily Chart - Data range: 12 August 2016 to 29 August 2019, accessed on 29 August 2019 at 10:30 am GMT. Please note: Past performance is not a reliable indicator of future results.


The above chart of the Dow Jones 30 stock index CFD, or DJI 30, shows a ten-period moving average as shown by the blue line. When the market trends higher, price often stays above the moving average for some time. When the market trends lower, price often stays below the moving average for some time. We can create a trading rule around this:

  • If the price is above the moving average = Long trades
  • If the price is below the moving average = Short trades

Now we have the possible trend, how can a trader 'time' a trade for an entry signal? By analysing the price bars in more detail to find price action or candlestick patterns.

One of the most popular types of candlestick patterns is the pin bar reversal.

Financial Market: Bullish vs. Bearish pin bar patterns

In the bullish pin bar pattern, sellers push the market to a new low but buyers reject this and push the market back up, closing in the upper half of the bar. In the bearish pin bar pattern, buyers push the market to a new high but sellers reject this and push the market back down, closing in the lower half of the bar. Let's add these to the previous rules:

  • If the price is above the moving average AND bullish pin bar pattern = Long trades
  • If the price is below the moving average AND bearish pin bar pattern = Short trades

Going back to the chart of the DJI 30 can we recognise any of these patterns in line with the trend?

Financial Market: MetaTrader 5 Supreme edition Trading platform

Source: Admiral Markets MetaTrader 5 Supreme Edition - DJI30, Daily Chart - Data range: 22 July 2019 to 29 August 2019, accessed on 29 August 2019 at 10:55 am GMT. Please note: Past performance is not a reliable indicator of future results.


The yellow boxes in the above chart show a number of the rules defined previously: bullish pin bar patterns when the price is above the ten period moving average and bearish pin bar patterns when the price is below the ten period moving average.

One of the most useful elements of these candlestick patterns is that traders could use them to derive an entry price and stop loss level which can help in proper risk management. For example, let's take the most recent long setup on the DJI30 that set up on 11 November 2019.

The high of the bullish pin bar is 27,712. A trader could enter an order to buy one point above this at 27,713 in anticipation of higher prices. The low of the pin bar is 27,507. A trader could place a stop-loss one point below this at 27,506 to minimise the risk in case of the market falling. This would result in a 207 point risk.

Trading 1 CFD contract size would mean that if the buy entry order was triggered, and then the market turned lower and triggered the stop loss, then the total loss would be minimised to $207. In this example, the market did not trigger the stop loss and actually moved higher. The trader could have decided to exit the trade at the end of the week, taken as the close of Friday 15 November at a price of 27,993.

In this instance, the gross profit would have roughly amounted to $280 (not including any overnight funding charges).

Conclusion

Now you are armed with a better understanding of the financial markets, some of the top trends to focus on for 2020, how to access the best trading platforms and tools in the business and how to place a trade, you can begin to make 2020 your year!

If you're feeling inspired to start trading, or this article has provided some extra insight to your existing trading knowledge, you may be pleased to know that Admiral Markets provides the ability to trade with 80+ Forex pairs and a wide selection of CFDs covering stock CFDs, commodity CFDs, index CFDs and more! Not to mention, provide you with the latest market updates and technical analysis completely FREE!

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About Admiral Markets

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INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

2. Any investment decision is made by each client alone whereas Admiral Markets AS (Admiral Markets) shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.

3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.

4. The Analysis is prepared by an independent analyst (Jitan Solanki, Market Analyst, hereinafter "Author") based on the personal estimations.

5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.

6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.

7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.