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How to Choose a Trading Instrument for a Novice Trader

The world of financial markets offers numerous opportunities and instruments for those looking to earn through trading. For novice traders, making the right choice is crucial to avoid unnecessary risks and achieve success.

Key criteria for selection: liquidity, volatility, accessibility, and education

  1. Liquidity – the ability to quickly buy or sell an asset without significantly affecting its price. For novice traders, it’s important to choose instruments with high liquidity as they ensure more reliable execution of trades and narrower spreads between buying and selling prices.
  2. Volatility – a measure of an asset’s price variability, indicating how much and how frequently the price can fluctuate in short periods. High volatility signifies significant and rapid price fluctuations, while low volatility is characterized by more stable and gradual price movements. To start with, it’s better to choose instruments with moderate volatility to avoid sharp price swings and losses. Over time and with experience, you can consider more volatile assets, such as cryptocurrencies, for the potential of substantial profits.
  3. Accessibility – it’s important that the instruments you choose are available through your broker or platform. Ensure you have access to the necessary markets and assets. You can check your broker’s website or contact their support team. Additionally, assess the responsiveness of the broker’s customer support. Professional and customer-oriented support is a reliable resource at every stage of trading, especially for novice traders.
  4. Education – understanding the fundamentals of the market, analysis, and trading strategies will help you make informed decisions and manage risks. Start by studying the chosen instruments and their characteristics.

Today, we will explore several trading instruments that are ideal for novice traders and explain why they deserve your attention.

Currency Pairs in the Forex Market

The Forex market, or the currency market, is often recommended to novice traders as an excellent starting point. There are several compelling reasons for this:

  1. High liquidity – Forex is the largest financial market in the world with enormous daily trading volume. This means you can easily buy and sell currency pairs at current market prices without significant price fluctuations. High liquidity ensures quick trade execution and narrower spreads, which is especially important for beginners.
  2. Accessibility – you don’t need a large capital to start trading Forex. AMarkets provides the opportunity to trade with a minimum deposit of $100, making the market accessible to a wide audience.
  3. Education – you can find numerous useful materials in our blog that will help you understand Forex trading. Additionally, various courses and webinars on the basics of the currency market and trading strategies are available online.

Suitable Currency Pairs for Beginners

When choosing currency pairs for Forex trading, novice traders are advised to focus on the most popular and liquid ones. For example:

  • EUR/USD (Euro/US Dollar) – this pair is considered one of the most popular in the Forex market. It has high liquidity and moderate volatility, making it an excellent choice for beginners.
  • USD/JPY (US Dollar/Japanese Yen) – this pair is also highly popular among traders due to its high liquidity, volatility, and the influence of economic and geopolitical events on its exchange rate. It also has sufficient historical data for technical analysis.
  • GBP/USD (British Pound/US Dollar) – this pair often exhibits high volatility, offering opportunities for profitable trades.

Shares of Large Companies

For novice traders, shares of large companies present an excellent opportunity to embark on their trading journey. Here are a few reasons why:

  1. Ease of Understanding: Shares represent ownership stakes in companies. Conceptually, it’s straightforward, and most people have an idea of what large companies do. This makes shares easily comprehensible and relatable for beginner traders.
  2. Short-Term Trading: You can buy and sell shares within short timeframes, reacting to current market changes, news, and influencer statements without the need for long-term investments.

Suitable Starting Shares

Novice traders are recommended to consider shares of popular and well-known companies at the outset:

  1. Apple Inc. (AAPL): Apple is one of the largest and most recognized technology companies globally.
  2. Tesla, Inc. (TSLA): An innovative company in electric vehicles and solar energy. Its shares often attract traders due to their high volatility and profit potential.
  3. Inc. (AMZN): Amazon is a leader in e-commerce and cloud computing. Its shares are appealing to traders because of their high profit potential.

Market Indices

Indices are instruments that allow you to assess the overall state of the market or a specific industry by consolidating information about stock or other asset prices. They help traders identify which companies or sectors are performing well or poorly.

Suitable Starting Indices

When choosing indices, novice traders should pay attention to those that are highly popular and widely tracked in global financial markets:

  • S&P 500: This index comprises the 500 largest U.S. companies and is one of the most widely used indices, serving as an indicator of the overall state of the American economy.
  • Dow Jones Industrial Average (DJIA): One of the oldest indices globally, it includes the 30 largest American companies and is often used to assess the industrial sector.
  • NASDAQ Composite: This index includes numerous technology companies and is considered one of the most volatile indices, reflecting changes in the high-tech sector.


Commodities (or raw materials) are natural resources such as oil, gold, silver, natural gas, agricultural products (e.g., wheat, coffee, sugar), metals (e.g., copper, aluminum), and other materials used in production or as basic ingredients in manufacturing processes.

Suitable Starting Commodities

  • West Texas Intermediate (WTI): This type of oil is often used as a key price indicator in the global hydrocarbon market. Changes in WTI prices often reflect in the global economy.
  • Gold: One of the most popular precious metals and typically considered a safe-haven asset during periods of instability.
  • Silver: An alternative to gold, traders may include silver in their portfolios as a diversification and risk management tool.

We have discussed several popular trading instruments to start your journey in the world of trading:

  • Currency pairs in the Forex market offer wide trading opportunities due to high liquidity and accessibility.
  • Shares of large companies are easy to understand and manage, allowing for both short-term and long-term strategies.
  • Market indices provide insights into the economy and consolidate multiple stocks into one instrument.
  • Commodities are of interest to traders seeking diversification and protection during periods of instability.

The choice of instrument depends on your goals, preferences, and experience. Remember that trading involves risks, so we recommend thoroughly researching your chosen market and developing your own strategy before starting. Additionally, successful trading requires discipline, risk management, and continuous learning.

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