In short
- A market is simply a place, physical or electronic, where buyers and sellers agree a price.
- Forex trades currencies around the clock on weekdays; stocks trade on exchanges during set hours; crypto never closes.
- Most retail traders access forex, gold and indices through derivatives such as CFDs rather than owning the asset.
- Every market carries the risk of loss, and leverage makes that risk larger.
What a financial market actually is
A financial market is any arrangement that lets buyers and sellers agree a price for an asset. Some markets are central exchanges with a single order book, like the New York Stock Exchange. Others are networks of banks and dealers quoting prices to each other, like the foreign exchange market. Crypto markets are split across hundreds of separate exchanges, each with its own prices.
What all of them share is that the price at any moment is simply the last level at which a buyer and a seller were both willing to trade. Nothing guarantees that price will hold. That is the source of both the opportunity and the risk.
The four markets beginners meet first
| Market | What is traded | How it is organised | Trading hours |
|---|---|---|---|
| Forex | Currencies, always in pairs such as EUR/USD | Decentralised network of banks, dealers and brokers | 24 hours, Sunday evening to Friday evening (GMT) |
| Stocks | Shares of ownership in companies | Central exchanges such as NYSE, Nasdaq, LSE | Set sessions, usually around 6.5 to 8.5 hours a day |
| Commodities | Oil, gold, metals, grains and other raw materials | Futures exchanges plus spot and dealer markets | Varies by product; many close for an hour a day |
| Crypto | Bitcoin, Ether, stablecoins and other tokens | Hundreds of separate exchanges and on-chain venues | 24 hours a day, 7 days a week |
Forex
The foreign exchange market is the largest financial market in the world. The Bank for International Settlements' 2022 Triennial Survey put average turnover at about $7.5 trillion a day. Most of that is banks, companies and funds exchanging currency for trade, investment and hedging; retail speculation is a small slice. Prices move on interest rate expectations, economic data, trade flows and risk sentiment. Our forex guide covers the details.
Stocks
A share is a small piece of ownership in a company. Share prices rise and fall with expectations about the company's future profits, interest rates and the mood of the wider market. Stock markets are where most people's long-term savings end up, often through funds that track an index. See how the stock market works.
Commodities
Commodities are physical goods: energy, metals and agricultural products. Most commodity trading happens through futures contracts, which are agreements to buy or sell a set quantity at a set price on a future date. Gold is treated almost like a currency and is quoted against the US dollar as XAU/USD. Read how commodity markets work and our gold guide.
Crypto
Cryptocurrencies are digital tokens recorded on a blockchain. They trade around the clock and are far more volatile than major currencies or large company shares: daily moves of 5% or more are common for Bitcoin, and much larger for smaller coins. Consumer protections are also weaker in many countries. Start with our crypto guide.
Owning an asset versus trading its price
A crucial distinction that is often blurred in advertising: you can either own an asset or hold a contract that pays out based on its price.
- Owning means you hold the shares, the coins in your wallet or the physical gold. You can lose what you paid, but not more.
- Derivatives such as CFDs, futures and options let you profit or lose from price moves without owning anything. They usually involve leverage, which means a small deposit controls a much larger position, and losses can exceed what you expected.
Most retail forex, gold and index trading is done with derivatives. That is why understanding margin and risk management matters so much before you start.
Who is on the other side of your trade
In a central exchange, your order is matched with another participant's order. With many retail forex and CFD providers, the provider itself may be your counterparty, meaning it takes the other side of your trade. Neither model is automatically bad, but they create different conflicts of interest, which is one reason regulators set rules on how providers must treat clients. Our guide to choosing a broker safely explains what to check.
When markets are open
Liquidity, meaning how easily you can buy or sell without moving the price, is highest when the most participants are active. For forex this is the overlap between the London and New York sessions. For stocks it is usually the first and last hour of the exchange day. Thin, quiet periods tend to bring wider spreads and sharper jumps.
Frequently asked questions
Which market is best for beginners?
There is no single best market. What matters more is understanding the one you choose, starting small and avoiding leverage until you understand how losses are calculated. Many people begin with long-term investing in broad stock index funds because it does not require active trading.
Is forex bigger than the stock market?
By daily trading volume, yes. The BIS estimated forex turnover at about $7.5 trillion a day in 2022, far more than daily stock trading. By total value of assets held, global stock markets are larger.
Can I trade all these markets from one account?
Some providers offer forex, indices, commodities and crypto from a single account, usually as CFDs. Whether that is suitable depends on your country's rules and your experience. Always check the provider is authorised by your local regulator.
Sources
- BIS Triennial Central Bank Survey 2022