Six months into a COVID-19 landscape has created much debate on a looming recession, but the economic fallout has already been well documented. The International Labour Organization has estimated that the global labor income declined by over 3.5 trillion dollars in the first three quarters of 2020 compared to last year. While this type of volatility isn’t wanted by most institutions, there are still many active traders within the financial markets who see the opportunity in the mist of chaos. Out of all these financial markets, forex still dominates as the largest marketplace with a daily trading volume of 5.1 trillion dollars. Due to the low capital requirements of forex trading, it makes sense that brokers like IronFX have reported increased trading volumes by over 300% from March to June. But with volatility giving the potential for massive profits and unnecessary losses, it becomes more crucial than ever to effectively track market trends. Does the average forex trader have enough insight into current events to trek the uncertain terrain? I reached out to Veronica, a DFW forex-trader and creator of her own apparel and art brand, the Novice Ve.
Hello Veronica, has there been any changes in your trading strategies due to COVID-19 or during high peaks of volatility?
Yes, with the markets being more volatile we are able to enter and exit the market faster with a profit or a loss. Risk management improved because of the volatility, as a trader you are a risk manager focused on being able to manage your losses in a way that you can lose more trades than you win and still be a profitable trader. Ex risking $1.00 for $10.00 with your ratio being 1:10 you can lose half of your trades and still be deep in profit compounding your account.
Through the Platform, I am also able to access multiple resources. Including current events, that help confirm the analysis of the market.
On August 18th, Morgan Stanley picked the USD as the number one safe-haven currency due to the Fed’s willingness to provide liquidity but that very same day the dollar index hit a 27 week low. Do you believe the USD will quickly rise again as the safe-haven currency or will investor strains and political uncertainties continue to hurt it?
Being able to analyze the market is most important, recognizing patterns and wave impulses. USD has been the safe-haven currency for decades, but trading currencies whether you’re scalping, day trading or swing trading- you do not have to dissect the technicals like that.
IronFX reported that developing countries in Africa, Eastern Europe, and Southeast Asia have made up 60% of new trading accounts opened between March-June 2020. Is there any reason developing countries have been so attracted to Forex trading and do you believe this momentum will continue?
Due to Covid-19 many people were left without their income, people will always find a way to make money. Anyone anywhere (unless the government restricts it) can participate in trading in any financial markets, with proper education and mentorship results are positive. The ability to make your money make you money is a skill that drastically changes your life, so momentum and popularity will probably continue to rise as so many people see success. Especially with the foreign exchange market you can enter with such a low overhead while your rate of return is greater comparatively speaking to the other marketing.
With traders flocking to larger, reliable brokers due to liquidity demands and withdrawal concerns, is there anything that smaller forex brokers can do to thrive during COVID-19?
N/A not something I have to worry about- there are a lot of US regulated brokers that are certified.
Has your marketing to interested traders changed at all during COVID-19 and is there anything you would say to a new trader in this environment?
I’d say people are now frequently asking me how I trade and how they can participate and are seeking new ways to make money from home or on the go. Covid-19 proved how unstable the traditional job field can be especially as we step further into this new digital era.
For those who have questions feel free to reach out via instagram @itsme_ve
