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Which Markets can be Day Traded?

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There are many different markets available for day trading, including futures, options, currencies, and stock markets. Most people are aware of the stock markets, but few non traders are aware of the many other markets that are available to day traders, many of which are much more popular than the stock markets.

Popular markets

Some of the most popular markets include the following:

  • Futures based on currencies (Euro, British Pound, Swiss Franc)
  • Futures based on stock indexes (DAX, Nasdaq)
  • Futures based on commodities (oil, gold, wheat)
  • Options on futures
  • Currencies (Euro to US Dollar, Euro to British Pound)

Note that there are no stock markets listed in the above list. This is because the SEC (the US securities and exchange commission) has placed restrictions on the day trading of US stocks. Details of these restrictions can be found in the day trading glossary.

Exchanges and Brokerages

All of the day trading markets are provided via exchanges such as the following:

  • CME (Chicago Mercantile Exchange) in the US
  • CBOT (Chicago Board of Trade) in the US
  • DTB (Deutsche Boerse) in Europe
  • MONEP (Euronext Paris) in Europe

The exchanges set the contract specifications for the markets, and process all of the trades on their markets. The exchanges can be accessed directly, but day traders usually use direct access brokerages, which allow the day trader to access all of the different exchanges directly but via the same trading interface. Some popular direct access brokerages are Interactive Brokers, and Transact Futures.

Choosing a Market

Which markets you choose to trade will depend upon several factors, including your initial financial state, your trading system, your personality, and your geographical location. Some markets are better suited to new day traders, and some markets are better suited to experienced day traders. As a beginning day trader, you will want to start with a market that has low margin requirements, a low tick value, and moves at a medium pace. The article Choosing a Market will detail the most popular markets, and help you choose the market that is right for you.

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