What’s the Best Way to Trade Forex during a Coronary Crisis?

Published:12 July 2021 Updated:4 January 2024

Coronavirus has changed the rules of the game in all spheres of life, including financial markets. The COVID-19-induced crisis and prolonged quarantine had an impact on the popularity of the forex market (forex and COVID-19). However, the current situation in the markets has also determined the strategies and tools that are best used to take profits during a coronation crisis. Let’s talk about that in more detail (Best Forex Strategies).

 

World indices

During the market’s struggle with the coronavirus, indices were among the most popular asset classes for trading. According to some data, index trading accounts for more than one-third of all open positions. The major major indices are constantly reacting to what is happening in the markets, which means they guarantee profit opportunities for traders. At the time of writing the main indices (DOW, S&P and Nasdaq) showed the growth of 1-2% for the last week. The rise in the indices is due to concerns about the speed of the global economic recovery amid new news about the delta variant of the coronavirus. The peculiarity of indices and at the same time advantage is the natural diversification. The corporate market often faces unpredictable events, such as the resignation of a board member or negative reporting. All of these can lead to fluctuations of tens of percent in a few hours. Such drawdowns need to be insured with other assets. Therefore, the drawdowns of one asset in the indices “overlap” with the results of other assets.

 

Gold assets

Traditionally, gold is the most important protective asset in times of financial crisis – everyone from major investors to ordinary traders turns to it. The properties of gold make it an ideal opportunity to wait out the crisis, and on the market forex It also allows you to make money. For example, at the end of last year, when the U.S. was showing record growth in coronavirus infections and the U.K. was just starting to vaccinate, gold was steadily showing growth and setting local highs. In early June, gold continued to hold at the important $1,900 per troy ounce level. Even though the price of gold is down now (at the time of writing, it was at 1.790), it provides investors with excellent earning opportunities, regardless of their trading preferences. In general, during the crisis, metal trading is more of a medium-term trade. The decision to raise interest rates may play against gold, making it less attractive. Investments in gold are most appropriate in moments of chaotic currency movements.

 

Cryptocurrencies in the short term

During the Coronary Crisis Cryptocurrencies have somewhat lost their appeal to traders and investors as an asset for the long term. However, they will be a good alternative to currencies for traders who are not afraid and prefer short-term trading. Experts and analysts agree that the correlation between the stock markets, particularly the S&P500, is growing. But this theory is only viable during a relatively short period, such as a pandemic crisis. Even the decline in cryptocurrencies when trading through Forex brokers allows you to earn, especially when using short-term strategies.

 

Choosing a broker during a coronavirus crisis in the markets

During the coronavirus period, the volume of forex trading increased several times as the attractiveness of making money online increased. And all newly arrived traders are faced with the choice of a broker to trade with. First and foremost, it is better to turn to brokers with considerable experience in the forex market. For example, a broker NPBFX (go online) exists on the market since 1996, has a license IFSC and is a member of the International Financial Commission, which guarantees an additional level of security for traders. The thing is that in case of disputable situations and decision of the commission, each client receives guaranteed payments from the compensation fund up to 20,000 euros. In addition, the broker provides access to a large number of instruments of 5 types: forex, indices, stocks and EFT, cryptocurrencies and commodities. NPBFX has developed a unique analytical portalwhere analytics and market reviews are regularly published. The portal also contains a whole collection of trading strategies with detailed descriptions and charts, including the strategies most suitable for trading on the coronaval market. The analytics portal is free for all NPBFX broker clients. It can be accessed immediately after registration.

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