Trading during the global crisis is extremely dangerous. You cannot make the right decisions when your emotions are raging. If you are feeling panicked and unsure about your trading decisions, it may be best to take a break. Remember that tomorrow there will be another great opportunity. In the meantime, you should adjust your trading strategy to take advantage of high volatility and take a break. Here are some tips to help you trade during the global crisis.
Do not trade unknown assets
During financial crises, trading in unknown assets should be avoided. Instead, look for Forex trading opportunities and focus on currency pairs. It is recommended to diversify your portfolio so that you can trade any market. It is always better to minimize risk than to ignore it.
Follow financial news
When trading, keep in mind that news shocks may be a good entry signal. A recent example is the cable (EUR/USD) during the Greek crisis. The ECB’s main policy tool to combat rising prices in Europe is raising interest rates. If the euro is about to increase in value, you might want to buy it in anticipation of an increase in rates. The same principle applies to interest rates. Interest rates can also be used to augment your carry strategy.
Learn from experts
One of the best ways to trade in the Forex market during a crisis is to join a webinar hosted by an expert. These webinars offer daily news updates and trading tips from professionals. They’re the best way to ensure your success in trading during a crisis. There is no way to guarantee that the market will rise again if you’re not prepared. If you follow the rules, it will be less painful.
Trade small amounts
Remember that currency trading is a 24-hour market, seven days a week. Therefore, it is essential to keep your stop losses tight and trade small. Moreover, it’s best to avoid looking at support and resistance levels in this type of market. In most cases, these levels will be overridden by strong sentiment and a lack of liquidity. That’s why it is best to keep your stop losses tight and focus on the markets.
In fact, one of the most successful strategies in Forex is the carry trade. In August 2007, the first wave of the subprime crisis hit the foreign exchange market, with losses in fixed income and equity portfolios spilling over into the forex market. In response, many portfolio managers deleveraged their winning positions and liquidated their losing ones.