Are you still looking for which market generates trading opportunities? While any market may deliver good returns, there are a number that are perennial favorites among traders. Here are three of the more popular ones traded by Chinese investors.
The EUR/USD currency pair
The two largest currencies in the world are the US dollar and the euro. This is because they are the currencies of the world’s two largest economies and trading blocs. There is so much trade flowing between Europe and the United States that corporations have a continual need to manage their exchange rate risks. At the same time, there is a large amount of speculation on the currency pair, which leads to significant volatility.
This combination of high liquidity and volatility may create great trading opportunities for forex traders. Even for those new to trading, studying the EUR/USD currency pair may be a good place to start. This is made easier by a constant flow of economic data from both the euro zone and the US – this economic data may moves markets and make it easier to spot and follow trends. As a result, EUR/USD is the most commonly traded currency pair in the world and one of the most popular markets traded in China.
Gold
Although gold has declined significantly from its highs of a few years ago, it still may provide excellent trading opportunities. Gold is sometimes used as a hedge against inflation, and considered a safe haven in bad economic times. When gold starts to rise, this is often due to significant speculation – which may drive trends for extended periods of time.
As a trader in China you may trade gold as a physical commodity or as a futures contract. These are agreements to buy or sell gold at a particular price in the future. These are typically traded on central exchanges, which may make futures trading a less risky proposition than trading commodities directly. Futures also offer superior financial leverage – by buying a futures contract, you control a large slice of a commodity without having to come up with anything near to the full purchase price.
The Hang Seng Index
If you’re looking to get exposure to the volatile Chinese market, then the Hang Seng index may be a good way of doing this. The Hang Seng is the stock market index that tracks the Hong Kong stock market, and reflects daily changes in valuations of the largest companies on the Hong Kong Stock exchange. Many of these companies are based in mainland China, or have significant presence there. For example, CNOOC – one of China’s largest offshore oil exploration companies – is a component of the Hang Seng Index, as is China Mobile. You’ll also find other leading Chinese companies – such as Lenovo, the computer manufacturer. There is also a fair sampling, however, of companies based outside of mainland China, such as Cathay Pacific Airlines and Hutchison Whampoa, both of which are based in Hong Kong. You may invest in the Hang Seng through index funds that track the overall value of the index.
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose.Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).
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