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the market analysis process.

What Is a Good Trading Instrument?

As a trader, you can choose the product you’ll

trade from among a number of financial instruments today. Your

choice depends on your knowledge of the various vehicles and your

trading style.

This tutorial deals only with those instruments

traded on a regulated exchange or with foreign exchange contracts

traded at cash forex firms. You could also be a trader in the

over-the-counter market or some other swap or auction arrangement,

but those venues are beyond the scope of consideration for most

beginning individual investors.

In addition to being exchange-traded, here are

some characteristics good financial instruments should have in

common:

Ties to the cash market. Financial

instruments are typically replacements for transactions in the

actual cash market, so you want an instrument that has a solid