Asset classes overview
Map asset classes to trading characteristics.
Lesson path
Market Foundations + Forex Mechanics
The Basics
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Map asset classes to trading characteristics.
Markets are not all the same
An asset class is a family of tradable instruments. Forex, stocks, ETFs, indices, futures, options, and crypto can all show candles on a chart, but they do not behave the same. Each has different hours, volatility, leverage, costs, rules, and beginner traps.
Forex trades 24/5, offers leverage, and is heavily regulated in places like the U.S. and EU. Stocks are shares in companies, with earnings risk and fundamentals that are easier to research. In the U.S., stocks moved to T+1 settlement in May 2024, meaning regular-way trades generally settle one business day after trade date.
ETFs are baskets of assets, often with lower single-company risk. Indices track groups like the S&P 500, NASDAQ, or FTSE and are usually traded through futures, ETFs, or CFDs where allowed. Futures are leveraged exchange contracts that expire and roll. Options use calls and puts, with defined risk structures but complex pricing. Crypto trades 24/7, has no single central exchange, and can be highly volatile.
Recap: every asset class has trade-offs. Start with one market whose hours, costs, volatility, and rules fit your account before trying to trade everything.
Knowledge check
Answer before moving on.
1. Which asset class is usually described as trading 24/5?
2. What is wrong with saying all asset classes settle T+1?
3. What is the best beginner approach across asset classes?
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