The ongoing COVID-19 pandemic has triggered numerous challenges for traders and businesses across the globe. The lack of essential products, lockdowns, and disruption of normal operations in the supply chain has forced traders to change their trading strategies.
Today, predicting opening positions correctly, determining genuine news, and identifying the right markets to target has become challenging. As a trader, you should find a strategy to make profits regardless of the pandemic. Here are strategies to help you understand the market and trade successfully.
Sift what you Read and Watch
Not all information you get regarding Covid-19 is accurate. Still, you need to understand that different types of information amid the pandemic affect trading differently. While you may want to focus on news within your locality, markets hardly rely on geographical settings.
You may want to keep a tab on what is happening in the USA, China, the European Union, South Korea, and Japan. Various sources will influence the forex markets when releasing data on the concerns, mortality rate, and spread of Covid-19. They include
- The WHO (World Health Organization)
- Announcements from official Chinese government institutions about the negative Covid-19 situation in the country
- The CDC (Center for Disease Control)
Official pacts released by the organization of the Petroleum Exporting Countries about reduced production between its members.
Watch Economic Engines Closely
Economic engines trigger the approval of overall commercial well-being, and many experienced traders understand this fact. As a result, they will watch their commercial calendars all year round regardless of the pandemic. Still, monitoring the following indicators gives traders an edge during the ongoing pandemic.
· Oil Repository Levels
Oil is a critical ingredient in the global economy. The United States of America discloses its prevailing crude oil reserves weekly. This information is crucial, seeing that the US remains the most significant oil consumer globally, with China coming in second. When the reserves stay the same or increase, that would indicate that the US consumer and industrial machine is performing dismally. Such a situation shows a reduction in sales of oil and all other goods.
· Chinese Manufacturing Statistics
The US purchases a large percentage of goods manufactured from China. China requires resources to execute production, but they can only manufacture when the US is purchasing. While theirs is a symbiotic connection, one of them increases first.
· Employment Statistics in the USA
Employment deficiency for numerous American consumers can have a significant impact on employment. Without jobs and money, there will be fewer sales which trigger a drop in the economy.
The US government and other governments across the world are helping their citizens. However, people are still not making enough money. Once employment numbers improve, that will indicate that forex traders can focus on such news to make a profit.
The Big Markets that Demonstrate General Sentiment
Experienced investors understand these markets well. However, if you are a beginner in the forex trading industry, you want to know how to leverage the prevailing market situation to make a profit. These markets are:
· Brent Oil
Oil drives economic activity. While there are different types of oil, Brent oil is the most influential on the markets and the popularly traded oil grade across the globe. When Brent oil prices increase, that indicates global oil demand and an increase in economic activity. Such a situation has an impact on profits and sales in nearly all companies.
During an economic disaster, some countries experience increased inflation and sometimes war. Some of the largest global investors purchase gold because many people opine that the commodity is a store value. If gold prices rise, then that could be an indication of bad happenings in the forex markets.
· S&P 500 (Standard and Poor’s 500)
S&P 500 is a US stocks index that gives forex traders an opening to the well-being of some of the largest corporations across the globe. Due to the varied sectors and industries that the S&P defines, forex traders can clearly understand what is happening. This information can help them make informed forex trading decisions.
These assets give you an intuitive view of global happenings across the forex markets. They also help you understand how mega-funds and financial institutions have analyzed prevailing conditions.
To succeed as a forex trader amid the pandemic, you want to keep a tab on breaking news from reliable sources. The global economy will soon recover from the ongoing pandemic, but every trader should devise strategies to profit amid the market disruption.