03 October 2016

Depth versus Range of Assets when Choosing a Broker

When choosing a broker the kinds of assets offered can be an issue of some importance. Typically CFD brokers offer a range covering Forex Pairs, Indices, Commodities and Shares.

In the not so distant past, before CFDs opened up commodities, shares and indices to leveraged trading, Spot Forex brokers offered a range of Forex pairs and Metals. Some of these brokers are still here and while augmenting their offering with CFD assets, may still maintain a focus on Forex and Metals.

There are brokers which offer a large number of total assets, some offer significantly less. Typically the bulk of any offering is made up of Share CFDs. This can extend the offering into thousands of assets.

Because a broker offers a lesser amount of total assets does not mean it is lacking, as traders may end up trading a small number of assets and may even focus on a few or even one. Becoming specialised in one asset may enable the trader to explore the behavior of the asset in depth and over time.

However there is some excitement in having a large range of assets to trade from and becoming specialised in one asset, the trader may move to another and repeat the process.

It can be worth considering classes of assets, as different asset classes may behave in different ways and at different times.

It is possible that familiarity with one asset class can then throw some light on the behavior of another asset class, again to the extent this may be possible. What can be interesting is seeing similarities between asset classes, shown in regularities, such as patterns and movement around big figures.

Thus the range of assets can be as important as the number of assets, since this itself can potentially point towards an understanding of the ways prices can move, across markets.