How do you become an expert in financial markets?

How do you become an expert in financial markets?

Are you an aspiring trader who wants to boost their income but don’t know the first thing about various financial markets or trading techniques?

Unlike popular belief, trading is no rocket science. While different financial markets might look the same to you initially, a little hard work and research can help you gain sufficient expertise on the subject. There is a wealth of online and offline resources that can help you become an experienced trader.

Read ahead to learn why you should learn more about financial markets and how to go about the process.

Why should you learn about financial markets?

Most people use the terms ‘stock market’ and ‘financial markets’ in the same context. In reality, stock markets only make up a small portion of the global financial markets.

Different financial markets are integral to trading as they create the liquidity required for businesses to grow and raise capital. As such, gaining an in-depth knowledge about different financial markets is the first step for establishing a successful trading practice.

Expertise in financial markets can help you evaluate each trade’s risks and benefits and help you make the right investment decisions.

What are the different types of financial markets?

Here are the primary international financial markets that shape the global trading domain.

  •         Stock markets: Stocks are ownership shares of a public organisation sold to investors or the public to raise capital. Therefore, the global stock markets are used by large corporations to raise huge amounts of capital for new ventures. A flourishing stock market can help the economy of a country to grow.
  •         Bond markets: Different governments extend bonds to companies in exchange for fixed assets. Bonds are a type of large government loans given to organisations. There are a number of different types of bonds including treasury, corporate or municipal bonds. In most cases, the value of bond markets goes down when stock prices rise.
  •         Commodities markets: Companies rely on commodities markets to balance the financial risks while buying or selling commodities like oil, corn or gold. Since these prices are volatile, commodities markets can help businesses lock in the price for a specific period.

Other common types of financial markets include the derivatives markets and the foreign exchange (forex) markets.

What does it take for understanding financial markets?

It can sometimes take years to become a full-fledged expert in different financial markets. But patience and persistence, coupled with the following steps, can bring you a long way.

  1.   Be disciplined about your trades

The trading discipline is one of the strongest assets of a financial market expert. You should develop a trading schedule and be disciplined about following it. You should also follow your pre-set trading strategies and avoid the temptation to invest in quick money-making schemes.

Trading discipline also involves recording each trade you make in detail and ensuring your trades align with your long-term investment plans.

Want to develop effective trading habits right to kickstart your career? IBAT College Dublin offers an Introduction to Financial Markets and Trading programme to help you with that.

IBAT offers this course in partnership with the London Academy of Trading (LAT). This one-week programme offers several expert tutors who can teach you everything you need for an introduction to financial markets and trading. You also get one-on-one mentoring sessions which can help you develop financial trading skills.

The programme also gives you access to an interactive trading platform to practice your trades and live sessions with real traders to refine your skills. At the end of the course, you will know how to perform a fundamental or technical analysis of markets and evaluate different macro-economic data.

Click here to learn more about the financial market management programme.

  1.   Filter out financial markets’ news that’s not important to you

While digital media has opened up several news and information sources, it has also led a lot of unreliable content. Be careful looking at  “expert opinions” on market information and making a trade, as lot of the information out there isn’t as reliable as one may think.

To become a financial market expert, you must develop the ability to identify what’s relevant among a horde of news outlets. Filtering out the news that doesn’t concern your trading market can help you stick to relevant information.

  1.   Take up a finance or trading course

There are tonnes of online and offline trading courses offered by reputed trading schools and universities that can help you learn more about financial markets. These courses will enable you to conduct a technical or fundamental analysis of different markets and understand how market events affect your trades.

Sign up for courses that allow you to interact with experienced traders and get enough practice or mock trades. Reputed trading schools also offer a chance to expand your network among the international trading community.

Invest in a suitable trading course today to master the various financial markets and become an established trader.

This article is written by Sweha Hazari.