Get certified

Ultimate Guide To Learning Financial Markets

6 mins - Introduction img

Financial Markets have become prevalent in today’s world. They act as platforms that allow various transactions to occur, such as the purchase or sale of stocks, assets, bonds, and various goods and services. The need for financial markets has emerged greatly in today’s world where everything relies based on conducting trade. They are, therefore, practical solutions in a world where the demand for various goods and services is growing at a faster pace. Financial Markets allow the transaction of various goods to take place in an efficient manner whereby two or more parties are equally satisfied. It assists individuals, companies, as well as the government to raise money quickly.

Financial Markets have grown large, and that too pretty quickly, since it has become more convenient for other people to gain access to them. Rather than entertaining major banks, finance houses, and rich people, they have expanded to everyone, even people earning average wages.

Types of Financial Markets

Traders all around the Globe are open to the concept of financial markets. Here are some of the most prominent types of financial markets in the World.

Indices

Indices allow different traders around the world to trade collective stocks like they are individual stocks. Since traders can purchase or sell these collective stocks, it allows them to predict the price changes amongst companies with the biggest market shares within a specific market. Take the US 500 as an example of an index that is traded around the world more commonly.

Currencies

Currency markets are important in that they allow various banks and participants within a market to trade various currencies one after the other. Different currencies are known as ‘currencies pair’ where two different currencies have an established relationship with one another. For instance, the GBP/USD displays the relationship between the US dollar and the pound. Three letters indicate currencies all around the world. Since currencies operate at a global level, you can carry out trade with them at any time of the day.

Equities

Equities consist of various renowned companies all over the world along with the price of their shares. They are an example of a share market. Anyone can purchase or sell these shares if need be. For instance, Apple and Microsoft are well-known Companies that have market shares present.

Goods and Services

Goods and Services consist of the basic commodities that are typically purchased and sold by all consumers. Decent examples would include an energy source, such as oil, gas, etc. Other than that, your commodities would include ‘soft goods’ like wheat, beans, barley, or even various minerals, such as gold, copper, etc.

Bonds

Bonds act like instruments of debt. Bonds are issued by the Government whereby interest is given to various investors. You can also trade bonds. Some famous markets for bonds include the UK and the US.

Interest Rates

Interest rates indicate the cost of borrowing amongst two participants. The central bank is responsible for setting an interest rate whereby people lend or issue money to other parties or individuals. They tend to fluctuate considering the nature of the market. The UK and USA’s interest rates are exchanged a lot.

Factors Affecting Financial Markets

The equilibrium driven out of the aggregate demand and supply is what determines the price of a certain commodity. However, several other factors can push the prices of various goods and services up or down.

Political Reasons

Many people participating in financial markets keep tracking the news regarding those markets. For instance, several political issues could instigate changes of price within companies, causing changes in the market values as well. Speculation is, therefore, a vital aspect of the financial market.

Central Banks

Central banks are responsible for setting various policies, which include setting an interest rate, etc. These policies directly control the circulation of money and therefore, affect the market greatly.

The performance of companies

The results of various companies that are listed within the stock market act as an indication for market participants to buy or sell a share.

The release of Data by the Government

The information released by the government is vital for markets to function since it determines macro-economic principles such as inflation and employment.

How do financial markets function?

You can trade in financial markets in two ways: on-exchange trading and over the counter trading. On-exchange trading has been a historical form of trading whereby people used to visit actual buildings to purchase or sell stocks with commodities such as corn, wheat, etc. Nowadays, the exchange of stocks takes place over the internet, with participants from all around the world. Over the counter trading is the most common type where two parties are involved in the transactional process.

Who is involved in Financial Markets?

The participants of financial markets range from individuals to big companies. Here are the participants of the financial market.

Banks

Banks play a vital role in the financial markets as they provide funding to various companies and act as brokers. Along with that, banks are also involved in trading themselves. However, now their role in the transactional aspect has decreased significantly.

Investors

Various types of investors are involved in Financial Markets; for instance, pension funds or mutual fund providers are an integral part of the financial market. Retail investors are part of the market by investing in the funds or purchasing various shares. They are also an active part of the trading process.

Brokers

Brokers are a vital part of the financial market. They are responsible as they are the ones conducting the trading process for their clients.

Market owners

It is the duty of a few institutions for the sale of shares as well as bonds within a market. It is their job to ensure that their clients get to purchase or sell bonds and shares with ideal price levels.

Financial Markets have become an important part of our lives. Individuals along with major companies operate under the principles of financial markets without which a decent way of conducting transactions cannot take place.

Basics 11 items — 79 mins
2
4 mins — Basics

What are Financial Markets?

Financial markets are places where people and companies come to buy and sell assets like stocks, bonds (debt), commodities and other products. People have traded on financial markets for hundreds of years and they grew out of a very real practical need – to help people buy and sell things more efficiently, and to help companies that needed money to raise it more quickly.

co.uk
3
9 mins — Basics

Introduction to the Financial Markets

In this video we will take a general look at Financial trading. After going through the origins of trading, we will see the difference between several types of financial markets such as the Forex Market, the Equity Market, the Commodities Market and the Derivatives Market.

youtube.com
4
12 mins — Basics

The History of Financial Markets

We look at the history of charting the financial markets and how we reached the point we are at now. Including stock ticker tape, line charts, bar charts, candlestick charts, renko and more. This video allows us to look at how investors and traders became more technical with their work, which will lead us on to the modernisation of the markets.

youtube.com
5
12 mins — Basics

Principles for Financial Market Infrastructures

An FMI should have a well-founded, clear, transparent, and enforceable legal basis for each material aspect of its activities in all relevant jurisdictions. That’s the first principle, read more about the other 23 financial market principles.

thomasmurray.com
6
7 mins — Basics

Types of Financial Markets

There are so many financial markets, every country is home to at least one, though they vary in size. Some are small while some others are internationally known, such as the New York Stock Exchange (NYSE) that trades trillions of dollars on a daily basis. Here are some types of financial markets.

corporatefinanceinstitute.com
7
8 mins — Basics

Functions of Financial Markets

Financial Markets perform various functions in any country which gives an opportunity to the companies and traders for buying and selling the different financial instruments and the financial securities. It plays a crucial role in the allocation of the limited resources available in the economy of any country. It acts as an intermediary between savers and the investors by mobilizing the funds between them and helps in the determination of the prices of securities.

wallstreetmojo.com
8
4 mins — Basics

Importance of Financial Markets

Financial markets provide for the efficient allocation of resources within the economy. Through organized and regulated exchanges, financial markets provide participants with some assurance that they will be treated fairly and honestly. The financial markets provide businesses and governmental entities access to capital. They also provide employment to many thousands of individuals who work in the financial industry.

sapling.com
9
5 mins — Basics

How Does the Stock Market Work?

In the 1600s, the Dutch East India Company employed hundreds of ships to trade goods around the globe. In order to fund their voyages, the company turned to private citizens to invest money to support trips in exchange for a share of the profits. In doing so, they unknowingly invented the world’s first stock market. So how do companies and investors use the market today? Oliver Elfenbaum explains.

youtube.com
10
6 mins — Basics

What Is the Bond Market and How Does it Work?

The bond market moves when expectations change about economic growth and inflation. Unlike stocks, whose future earnings are anyone’s guess, bonds make fixed payments for a certain period of time. Investors decide how much to pay for a given bond (that is, for a stream of fixed payments of a certain length) based on how much they expect inflation to erode the value of those fixed payments.

thestreet.com
11
5 mins — Basics

What is a Commodity Market?

The commodity market is a market where traders buy and sell commodities. Commodities are raw materials or primary agricultural products. In other words, things that farmers, mining companies, and oil and gas companies produce or extract. The commodity market is similar to the equity market. However, in the equity market, people buy and sell shares.

marketbusinessnews.com
12
7 mins — Basics

Derivatives Trading Explained

Derivative markets serve important roles in the global financial system. While derivatives can be complex, they represent the modern day versions of practices that have been around for thousands of years, when individuals would place bets with one another or farmers would agree to sell their crops in advance as a form of insurance.

For individual traders, derivatives trading has opened up a wide array of markets for them, allowing them to speculate when the price of something will rise or fall.

ig.com
Advanced 10 items — 72 mins
13
2 mins — Advanced

Investment Cycle Phases

Investment decisions are not one off decisions.  Public and private actors repeatedly or continuously make choices that shape investments and have impacts on higher development goals. The cycle is a way to conceptualize different phases of investment decision making. Taking this step-by-step approach is proposed to improve the quality and enhance the results of ongoing and future investment operations.

fao.org
14
4 mins — Advanced

Fundamental Investing Principles

There are fundamental investing principles that apply to each of us whether we are seasoned portfolio managers or a novice investor. It never hurts to take time to periodically review these important principles and improve the foundations upon which we make investment decisions. Here are 10 investing principles fundamental to successful outcomes.

arborinvestmentplanner.com
15
7 mins — Advanced

Investing Styles: Which Style Fits You?

There is no right or wrong investing style to pursue. The one that works best for you ultimately depends on your risk tolerance, time horizon for investing, age and investment goals. Remember that your investing style isn’t set in stone either. As you grow older and your investment objectives change, so may your preferred investment approach.

thebalance.com
16
3 mins — Advanced

Ways to Analyze Stock

Investors depend on stock analysis to find potentially profitable stocks. Common ways to analyze stock include technical and fundamental analysis. Several components fall under fundamental analysis, including examination of a company’s price-to-earnings ratio, earnings per share, book value and return on equity. Many investors also use the recommendations of financial analysts to analyze a stock. The type of stock analysis you implement is based on personal preference. Understand the different ways to analyze a stock to find the method that best fits your financial objectives.

zacks.com
17
10 mins — Advanced

Fundamental Stock Analysis

In this 10-minute video, you’ll learn how to analyze stocks using Fundamental Analysis.

youtube.com
18
28 mins — Advanced

Technical Stock Analysis

In this 28-minute video, you’ll learn how to analyze stocks using Technical Analysis.

youtube.com
19
4 mins — Advanced

What is Inflation and How Should it Affect my Investing?

Inflation is an economy-wide, sustained trend of increasing prices from one year to the next. An economic concept, the rate of inflation is important as it represents the rate at which the real value of an investment is eroded and the loss in spending or purchasing power over time. Inflation also tells investors exactly how much of a return (in percentage terms) their investments need to make for them to maintain their standard of living.

investopedia.com
20
6 mins — Advanced

Investment and Real Interest Rates

Intuition as to why high real interest rates lead to low investment and why low rates lead to high investment.

youtube.com
21
5 mins — Advanced

Investing in ETFs vs Mutual Funds

As you’re looking to invest, you’ll come across two major types of funds: mutual funds and exchange-traded funds. What are they and which is better? ETFs and mutual funds both pool investor money into a collection of securities, allowing investors to diversify without having to purchase and manage individual assets. But exchange-traded funds are the darlings of the investing world right now.

nerdwallet.com
22
3 mins — Advanced

Global Macro Strategy

A global macro strategy is an investment and trading strategy that is based on the interpretation of large macroeconomic events on the national, regional, and global scale. For the successful implementation of a global macro strategy, fund managers analyze various macroeconomic and geopolitical factors. These include interest rates, currency exchange rates, levels of international trade, political events, and international relations.

corporatefinanceinstitute.com
Expert 7 items — 62 mins
23
9 mins — Expert

How to Invest in Commodities

Beginning investors tend to start out focusing on stocks, exchange-traded funds (ETFs), and mutual funds. That’s generally a good idea, because more sophisticated asset classes can be difficult to understand fully when you’re just starting out. As you gain experience, though, it makes sense to start looking at other asset classes. Investing in commodities takes some extra learning, but it can have some real benefits for your overall returns in your portfolio.

fool.com
24
5 mins — Expert

Different Ways to Trade Forex

In this lesson, you would learn about four different ways to trade forex or currencies. They are also the most popular ways for investing in the forex market. You will learn the overall concept of Spot Forex, Currency Futures, Forex Options, and Currency ETF’s.

financeorigin.com
25
8 mins — Expert

Options vs. Futures: What’s the Difference?

Options and futures are both financial products that investors use to make money or to hedge current investments. Both are agreements to buy an investment at a specific price by a specific date.

An option gives an investor the right, but not the obligation, to buy (or sell) shares at a specific price at any time, as long as the contract is in effect.

A futures contract requires a buyer to purchase shares, and a seller to sell them, on a specific future date unless the holder’s position is closed before the expiration date.

investopedia.com
26
6 mins — Expert

Risk Management Techniques for Active Traders

Risk management helps cut down losses. It can also help protect a trader’s account from losing all of his or her money. The risk occurs when the trader suffers a loss. If it can be managed it, the trader can open him or herself up to making money in the market. It is an essential but often overlooked prerequisite to successful active trading.

investopedia.com
27
9 mins — Expert

How to Avoid Emotional Investing

You should be identifying your long-term goals and using exterior “noise” like trends and news as data for your own objective decisions. Investment decisions shouldn’t be taken lightly, and you should make sure you know what you’re doing and what you should be looking at before buying any stock. If you’re unsure, stick to index funds, or spend the next couple of weeks digging through our investing archives.

doughroller.net
28
12 mins — Expert

Investment Strategies to Learn Before Trading

Before you begin to research your investment strategy, it’s important to gather some basic information about your financial situation. Ask yourself these key questions:

What is your current financial situation?
What is your cost of living including monthly expenses and debts?
How much can you afford to invest — both initially and on an on-going basis?

You don’t need a lot of money to get started, but don’t start if you can’t afford to do so.

investopedia.com
29
13 mins — Expert

The Future of Investing

In this insightful talk, Edmund Lee discusses why investing in businesses that are not making profit may not be as crazy as it sounds. Edmund Lee has more than 8 years of experience especially in the international market, from the United States to Hong Kong and the Philippines. In his experience, the success in stocks must rely on more than just technical and fundamental analysis as well as a deep understanding of market sentiment and risk management

youtube.com
Join For Free and Follow Financial Courses
Coursera offer a wide range of financial courses from leading universities at your own pace. Sign up for free and get certified!
Free Financial Courses From Leading Universities
edX offer free financial markets courses from leading universities around the world. Learn at your own pace and get certified!
courses
6 Finance guides See all finance guides