The Financial Market

Get an understanding of the steps involved in placing a trade, including how to protect yourself against risk and use leverage wisely.

Trade The Financial Market

Trading is the process of implementing investment decisions and other types of financial asset purchases or sales. Whereas investment tends to focus on what to do, trading is more directly concerned with how to do it. An important impetus for trading is the portfolio management process. Specific decisions in the trading process are dominated by economics—real or expected costs and benefits resulting from the trading choices made. The impact of economics has always been an important determinant in trading, and this importance has increased as the percentage of trades generated primarily to profit from trading (as opposed to investment) has grown. When a portfolio manager decides to modify a portfolio by buying or selling instruments, he or she generates an order to buy or sell. The order to buy or sell is usually passed to someone charged with managing the order through the execution process. Whether that person is the portfolio manager acting in a different role, a dedicated buy-side trader, or an agent. 

Foreign Exchange

Foreign exchange, or forex, is the conversion of one country’s currency into another. In a free economy, a country’s currency is valued according to the laws of supply and demand.

Commodities

A basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.

Index

Index trading is a type of trading of a group of stocks that make up the index. An index is a measurement of the value of a section of the stock market.

Stocks

A stock (also known as equity) is a security that represents the ownership of a fraction of a corporation.

Crypto Currencies

Cryptocurrency is a digital payment system that doesn’t rely on banks to verify transactions

Bonds

bond is an instrument of indebtedness of the bond issuer to the holders. The most common types of bonds include municipal bonds and corporate bonds.

Exchange Traded Funds

An exchange-traded fund is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges.

Real Estate

Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this item of real property.

The Financial Market Advantages with Compass Asset Management

It gives a platform for buyers and sellers to meet in order to trade in the assets. The prices for trading are determined by the market forces, i.e., demand and supply in the market. So It helps in the determination of the prices of securities.

It helps in the mobilization of the savings of the investors as the investor can put his money in the most productive uses.

For the traders, the financial market platform provides the potential buyer and seller of their securities, which helps them in saving their time and money in finding the potential buyer and seller.

In the financial market, investors can sell their securities readily and convert them into cash, thereby providing liquidity to the tradable assets. 

How To Start Investing in the Financial Market?

Create Your account

Create a new account on Compass Asset Management in less than a minute with only a registered Email needed to begin.

Fund Your account

Deposit funds into your personal wallet. Once your account is funded, you’re ready to trade.

Start Investing

Explore the industry-leading tools available at Compass Asset Management and begin Investing in financial tools like Currencies, Shares, Commodities, and More with full access to our powerful charting and trading software.

Important Points of the Financial Markets

It is the market, an arrangement, or institution which facilitates the exchange of financial instruments and financial securities.

It may have or not have a physical location. The assets can be exchanged between the parties over the phone or the internet as well.

Some of the financial markets are very small with a little amount of activity, while some of the financial markets trade trillions of amounts of securities daily. 

The Benefits of Investment Trading With Leverage

Magnified profits

This leveraged margin trade then allows you to receive higher profits if the position goes the right way. However, the risk is that if the trade is unsuccessful the losses can be magnified too.

Portfolio diversification

By margin trading the trader is not forced to put too much of their capital into one trade. It allows for the remaining capital to be diversified around other trades and markets.

Gaining from the market fall

When trading on margin, traders can profit from a falling market by opening a short position, meaning they have the intent to sell high and buy back low. 

Leverage Trading Explanation

If a trader takes a short position of 10,000 XRP on 10x leverage, and the price of Ripple falls 3% the trader will earn a profit of 300 XRP. A similar spot trade without leverage would result in only 30 XRP earned.

Disclaimer: Margin trading also comes with inherent risks if the position moves against the trade. You should never utilize 100% leverage and never invest more than you can afford to lose. 

Normal Investment

Leveraged trade with Compass Asset Management

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