To say that this year ushered in the unpredictable could be considered an understatement. From close calls with war to shocking natural disasters, and finally, the 2019 coronavirus (COVID-19), it was clear from the get-go that nothing would be normal about this year.
International trade and conventional practices in both the business and financial industries took a major hit due to enforced lockdowns by governments worldwide, as the struggle to contain the virus charged on.
Challenging Times For Economies Across the Globe
Travel and tourism came to a screeching halt, causing waves of panic to ripple through the global economy. When one considers the fact that major European countries and other international players rely on tourism to aid their respective economies, the dim reality brought in by the pandemic becomes clearer.
On a local scale, regular day-to-day transactions were forced to take on a new normal. Most citizens could not go out to perform their financial obligations, the way they would before, because of COVID-19 safety measures.
A report from Regal Core Markets found that restrictions in movement and the subsequent decline in business hours heavily impacted the forex market as well.
“Medium and small establishments were forced to close or even declare bankruptcy,” the report further stated. “Work-from-home became the sudden norm, and physical trades were significantly decreased to a minimum.”
The whole business world felt the effect of these swift, sudden changes, with scores of companies being forced to lay off employees and even shut down. Reports from CGTN indicated that mass unemployment and a decline in spending capacity are among the key factors that contributed to the market’s instability and the possibility of a global recession.
Understanding the Pandemic’s Effect on Forex Trading
“Traders are now more inclined to hold on to their money and conduct low-risk investments,” Regal Core Markets reported. “Focusing more on the necessity of in-depth monitoring tools and analysis reports.”
This is important to focus on as it shows that the sudden instability of the markets did not bring trading to a halt. Instead, it simply shifted the motivating factors behind trader decisions. The novel work from home situation, and lack of access to physical trading spaces, resulted in larger volumes of traders depending on online methods to complete their transactions.
The pandemic may have left a number of industries worse off, but it appears that the forex markets could be in a better position. But there are necessary steps that need to be taken for this to be solidified. Namely: security.
Developers are under pressure to ensure that forex trade security is guaranteed, in order to accommodate the waves of new traders. In addition to this, it is important that current and interested traders pay attention to the subsequent trend studies that will come out in the coming months and the upcoming new year.
So, Where Do We Go From Here?
Questions regarding the future of forex markets tend to focus on the wrong perspective. Instead of wondering when it will be “safe” enough to trade, serious investors may want to focus on what they can do to successfully trade in this period instead. The truth is that the pandemic is still a core part of all decisions being made today and trying to wait for this to stop could incur major losses on any investor’s side.
This also won’t be the last time the market will experience such volatility. If there is one thing this year has shown the world, it is that anything can happen at any time. So, trying to wait for an “ideal” or “safe” time to trade is not realistic.
Instead, consider that traditional and core FX strategies do not depend on how volatile the market is. Reputable trading platforms come with monitoring tools that allow any trader to sufficiently study the market before making a decision. What is different now is that traders will need to adopt new ways of thinking, in order to accommodate the new normal.
Alternatively, interested traders should also reach out to reputable forex advisors who can help them implement secure and successful trading strategies. In unpredictable times as the ones we find ourselves in now, it is important to lean into the companies and leaders who are knowledgeably equipped for times such as this.