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4 of the biggest trading trends helping young investors build their fortunes

By LLM Reporters  |  September 6, 2021
Trading pair DOGE USDT at Binance mobile app running at smartphone screen with a trading page at background
Image Credit: Iryna Budanova/Bigstock.com

Once upon a time, it would have taken many years of gaining experience and overcoming obstacle after obstacle to amass £1 billion, but today’s billionaires are younger and more switched onto trading and investment opportunities than ever before.

It had previously been widely reported that millennials had resisted investing, instead favouring lower-risk alternatives such as savings accounts and ISAs instead – but now, it seems that there is a new wave of younger and savvier traders taking the global markets by storm.

Take Sam Bankman-Fried, for example – who at the age of just 29, has amassed an eye-watering $8.7 billion cryptocurrency fortune after starting his trading journey early on in life. Having since gone on to launch trading firm Alameda Research, which manages $2.5 billion in assets, as well as crypto-derivative trading platform FTX, he is proof that age is unrelated when it comes to seeing financial success – and as those signing up to trading platforms get younger and savvier, it’s likely we haven’t seen it all just yet.

The mechanisms this new generation of investors are using to grow their wealth and build their fortunes are many, but a few are enjoying a particular increase in popularity amongst the young. From Forex to crypto, these are the biggest trends amongst millennial and Generation Z traders, and ones of which we should all be taking note.

Forex

Stock market graph and business financial data on LED

The Forex – a foreign exchange through which currencies are traded – facilitates the purchase of goods and services both locally and globally. Foreign trade and business depend heavily on it in order to function.

Trading on the foreign currency exchange is enjoying a surge in popularity amongst millennial and Generation Y and Z investors at present, and with convenient market hours, high liquidity and the ability to trade on margin, it’s easy to see why.

Based on selling one currency to acquire another based on current exchange rates, those who act quickly according to world fluctuations can make a considerable profit over time, and experienced traders are often able to predict how the market is likely to move and turn it to their advantage.

With the Forex market open 24 hours a day, five days a week, it’s one that rarely sleeps. Opening hours run from 9pm on a Sunday evening through until 5pm on a Friday to allow parties maximum time to complete direct transactions with one another from anywhere in the world. As these are not done through an intermediary exchange, the extra hours allow for time differences across the globe, with transactions completed electronically and over-the-counter.

Cryptocurrency

Two gold bitcoin coins lie on the tablet screen, which shows indicators of changes in cryptocurrency rates

Cryptocurrency has been making waves in the investment world for some years now, and none are more enthusiastic about its potential for growth than millennial and Gen-Z investors. Amongst the former, Bitcoin – which was the first digital currency to the table and remains the most disruptive to date – created numerous overnight millionaires back in 2010 when its value skyrocketed, and with its value continuing to head skywards ever since, give or take a few fluctuations, it remains hot property.

Peaking at an eye-watering value of $64,863 in April of this year, it hasn’t all been smooth sailing, and today it stands as $51,773 – but market experts are predicting that it will not just return to its previous heights over the coming months, but exceed them.

Cryptocurrency investment isn’t for everyone; it requires a high tolerance for market volatility, for one thing. But for those who are willing to take the risk, the potential is huge.

Contract for Differences (CFD)

Contract for difference trading

CFD (contract for difference trading) allows users to speculate on the future market movements of an underlying asset, but what sets it apart from other similar kinds of trading is that traders are not required to own or take physical delivery of the asset – they simply profit from correctly predicting fluctuations and making trades that align with their expectations.

CFDs are available for a range of underlying assets, such as shares, commodities, and foreign exchange. Essentially a contract between a buyer and a seller stipulating that the buyer must pay the difference between the current and final value at the end of the contract, it’s a low investment option that makes CFDs a great place for budding young traders to start. With access to the underlying asset at a lower price when compared with purchasing the asset outright, the ability to go long or short, and a smooth and seamless process, it’s easy to see why CFDs have been experiencing such a surge in popularity over the past decade.

Binary options

Binary options trading

Binary options trading is becoming a growing trend amongst a new generation of younger and savvier investors, making for an intriguing alternative to cryptocurrencies and Forex. But what exactly are they?

Binary options are essentially financial options that come with one of two payoff options: either a fixed amount, or nothing at all. Traders place trades based on whether they believe an underlying asset will be above a certain price at a certain time or not, making for a simple ‘yes’ or ‘no’ proposition in the context of what is essentially one of the simplest financial assets to trade.

It is perhaps this simplicity that has made it a popular starting point amongst young traders and investors, and a springboard into the more complex opportunities available to take advantage of today.

The key to success? Finding a trusted broker through which to facilitate your trades, and arming yourself with the knowledge and information needed to devise a steadfast strategy – check out trusted-broker-reviews.com/binary-options-strategy/ for all you need to know to get started.

Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.