The Right Market

The table below outlines the five primary markets available to the part-time trader.

Market	High Volume Timeframe	Cash/Spot	Futures	Options
Equities	9:30-4:00 ET for US exchanges and similar local times for other global markets	Primary	Yes (Single Stock Futures)	Yes (cash)
Indices	8:20-4:00 ET for US exchanges and similar local times for other global markets	Yes (Exchange Traded Funds, SPDRs, QQQ, etc.)	Primary	Yes (cash and futures)
Fixed Income	8:20-3:00 ET for US exchanges and similar local times for other global markets	Yes (But not usually traded actively by individuals)	Primary	Yes (futures)
Forex	24-Hour (best overall volume during NY/London overlap)	Primary	Yes	Yes (futures via exchange, but spot as well)
Commodities	Varies by market	Not for traders	Primary	Yes (futures)

The question of which market is the best to trade (and we do advise the part-time trader to choose only one as their focus) brings in a number of different considerations. Both knowledge of the market selected, and comfort with that market is certainly near the top of the list of important considerations. It is always easiest to trade in a market where there is a firm understanding of the operations and the instruments in question. In such a circumstance the trader can then focus on other things. On the other hand, the trader looking to work in a new market must first and foremost overcome the learning curve.

Picking up the basics of any given market (and the primary instruments used to trade it) is generally fairly easy. There are many resources to that end. Getting comfortable in that market, however, is often more a question of experience and observation. That takes a bit more time.

Beyond market knowledge is the requirement of picking a market which fits with one’s trading timeframe. That primarily means having the ability to enter and exit positions and adjust orders easily when your schedule allows.

Foreign exchange (forex) is still the one true 24-hour market in which you can actually trade any time of day or night without delay. However, several others have begun to close the gap. Even in forex, though, there are times of day, especially in certain currency pairs, when trading is thin.

The longer-term traders might not concern themselves with this sort of thing, but it is vital that shorter-term participants are aware of these sorts of liquidity and volatility considerations when choosing a market for trading.

We will delve much more deeply in to the question of which market is best for the part-time trader in a future chapter. We have our own opinion on the subject, which we will present at that time. For now, there are some other considerations to be worked out before getting to that stage.

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