This Blog is created to aware you about financial market so that you can leverage that information to make money from that. Here I’m going to inroduce types of financial market in the world and brief about it. After that I’ll talk about each one seperately and also provide techniques to earn money through that knowledge.
TYPES OF FINANCIAL MARKET
4 types of Financial Market :
1. Share Market
2. Crypto Market
3. NFT Market
4. Forex Market
Before you start your career in market for making money, there is one rule you should always keep in mind:
1. Stock Market
The Financial Market of the country where Companies are listed for the purpose of raising money by issuing a percentage of ownership of their company (in terms of share ) is known as the Share Market. Share Market is not a term that is just used for Indian Market, it’s being used worldwide.
The financial market of the country itself is divided according to the financial transaction that happens inside that like :
1. Share Market: Where shares of the listed companies are being traded.
2. Bond Market: Where Gov./companies issues bond to raise money from the Retailer/investor by providing them fix yearly return.
The purpose of the company to issue bonds is to accomplish financial needs, it might be to raise money for a future project or other financial purposes.
3. Currency Market: Where the currency of the country is being traded-in pair with international currency. ( Open only for limited hours in a day, depending on the country)
4. Commodity Market: Where commodities like Aluminium, Gold, Silver, Cotton, Natural Gas, etc. are being traded. You can find a list of all the commodities traded in a particular country on the exchange’s websites or on the broker’s platform.
2. Forex Market
The Global Foreign Exchange Market known as Forex represents the platform by which currency from one country can be exchanged with the currency of another country. Forex market size is close to $6 trillion, making it to largest financial market operating in the world. Around $1.5 trillion volume is traded by retail traders.
The main difference between forex and the stock market is :
The forex market is 24hr market, No matter what the time of the day or night, you can trade around the clock owing to the global nature of the forex market.
- High Liquidity
- High Leverage
- Identifiable trends
- Easy access to market news
3. CryptoCurrency Market
There are only 2 markets that people were trading before cryptocurrency came into existence. By reading crypto millionaires’ stories and news, everyone moved toward that. Even people are thinking crypto market as a ” getting rich quick scheme” but the difference is that people are seeing just one side of the coin. Thousands of people have lost their entire life savings & some made fortune.
It’s not as dangerous as I’m showing you if you thoroughly understand the concepts & techniques to earn money from that market. But before you start trading in this market, please make sure you have learned enough about risk management, otherwise, it’s a matter of seconds and your account will be blown. Because of its high volatility, it’s risky as compared to other financial markets.
Global cryptocurrency market is about $1.29 Trillion, and It is changing frequently day by day due to the very high volatility of the market.
There’s a lot more to talk about the cryptocurrency market in depth but I’ll cover it in later parts where I’ll provide you some insight about how can you earn money from crypto with less risk.
4. NFT Market
NFT full form is a Non-fungible token. I don’t want to make it complecated, so I’m simplifying all the things here from my perspective.
NFT market is not any new things came into existent. Now some of you’re thinking why am I telling this, but yes, it’s not that anything new.
Before the NFT market came into existence, you guys might know that rich people used to buy paint from famous artists around the world and they keep it in their homes.
Some of the paintings are worth Crores also. They are paying this much money, not for just the painting but the fame of the artist and vision he had put into his painting. that painting is also one copy, which once someone buys, it can be transferred (in terms of ownership but) can’t be re-created because it’s a unique and ownership transfer to the new owner. Because of its uniqueness, someone has paid crores for that painting. Payment of this much money is the value that a painting holds considered as a Store of Value.
Same in the case of NFT, it’s just a digital form of painting. Because of its uniqueness and it can’t be exchangeable.
Let’s Understand the word fungible so you get to know the concept of non-fungible automatically :
Being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity. if you borrow a $100 note from your friend, you need to pay him back with the exact same value, but not necessarily the exact same note. You can pay him two $50 notes or ten $10 notes.
Commodities, common shares, options, and dollar bills are examples of fungible goods.
What is meant by “It can’t be exchangeable “?
If you borrow your friend’s car, you cannot return him some other car. So, a car counts as a collectible and it’s unique, which is why it is non-fungible. Non-fungibility is the property of the uniqueness of an asset.
Assets like diamonds, land, or baseball cards are not fungible because each unit has unique qualities that add or subtract value.
So in technical language: NFTs are an innovation in the blockchain space that enables you to track ownership of a particular asset. Non-fungible simply means something which is unique and can’t be exchanged for another item.
NFTs are like real-world items of some value.
They are kind of digital assets that can be bought and sold online, frequently with cryptocurrency. NFTs represent a whole entity and cannot be sub-divided into multiple pieces.
The concept of NFT is based on blockchain technology, particularly the Ethereum blockchain. NFTs are basically units of data stored on the blockchain that certify digital assets to be unique. And they can be used for a wide range of digital commodities such as photos, audio, video, and other digital files.