Commodity futures markets have long been popular among producers of various raw materials that need to hedge price risk to protect business but due to huge improvements in accessibility many investor are now utilizing these markets to enhance capital gains. This sector is largely affected by growth, especially from China and emerging economies, and on the whole commodities outperformed equities during 2009 to 2011 period. Similar to equities they are considered risk assets performing well in growth environments but assets such as gold and silver can also receive safe haven demand meaning they can do well during uncertainty and investor fear making the sector very interesting and potentially profitable. The study of price action is very useful to determine future price movements along with global economic data and decisions by the Federal Reserve in the US on monetary policy.
There was a time when dealing in currencies was just for large organisations looking to hedge against currency risk but now due to lower capital requirements the markets have been opened up to the average investor. Price action analysis works very well in this sector but be aware big moves can occur from news regarding interest rates, employment and GDP from the respective country. Any pair involving the USD is can be very active given the attention surrounding quantitative easing at present.
A stock index is a weighted average of a group of company share prices. If you are an investor more inclined to digest macro-economic data rather than individual stock news then trading stock indices may be the product for you. Sometimes good news about a specific stock can be overshadowed by events on a broader scale therefore during these times it can be very beneficial to trade indices instead. Similar to commodities a stock index future price movement can be anticipated via price action analysis, assessment of economic data, market sentiment and earnings results from major corporations within the index.
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