How To Ride The Forex Wave During Turmoil In The Economy

If you have one or a number of Forex investments, the chances are that a few of the things that have happened recently across the world will have had an effect on their pricing and made you significantly uncomfortable about their future. Big news like Brexit had ripple effects that were felt not only across the globe – but also across global economies. While it isn’t ideal to be trading in something like Forex at a time like this where anything can happen, there are still a few things you can do to keep your investments safe. In a market where a lot of people are losing their cool and making impulsive decisions, being calm and doing your research can help you out a lot.

Know the markets

If you are going to continue to trade Forex during a time of economical and political turmoil, then you need to know the markets you are trading in really well. You have to remember that one countries economy can greatly effect another one – so there is no point in trading in something new you don’t know about like Japanese Yen if there is something like an election going on in the countries that you mainly trade in. Likewise, look up the news of a country if you are potentially going to go in and start trading their currency. For whatever currency you are trading, even if it is Bitcoin, do your research and become knowledgeable. one of the best ways to keep up to date is to set up a news alert in your chosen search engine so that you are notified every time something happens in your chosen market or economy.

Make the use of stop losses

If you sign up to a reputable online trading company, like CMC markets, then you will be able to utilise stop losses. Although it can be heartbreaking to see a price plummet that you thought was going to do really well, that still does not warrant losing money consistently because you have a gut feeling things will pick up. Ensure you set a stop loss at something reasonable, and then if there are things in the news or political changes that you feel will make the currency you are trading in become weak, re-evaluate them. Do not fall foul to thinking things will bounce back because trading experts say they will, because you could stand to lose a lot of money personally. Setting up stop losses is simple, and most people are able to do it on a smartphone. this is also good because you can get push notifications with market news straight to your mobile, so if you do this can set up your stop loss or amend it as soon as it comes through.

Look more long term

If something has sent the markets absolutely crazy, then looking at the hour by hour charts isn’t going to be much good. When there is a bit of economic turmoil, turn to the longer term analytics and go by them. There has likely to have been some turbulence in your chosen trade in the past, so try and find this in the information that is publicly available and find out how long it took to correct itself. This is also a good strategy if you are looking to make a new investment and use any drops in price to your advantage. Price charts from the previous year or so should be able to tell you how long you can expect to wait before you get a return on your investment. If you are going to do this, you also need to be realistic with your capital. If you are playing the long game, you can either invest a lump sum, or spread your risk by investing monthly over time. When you sit down and look at your investments into Forex, try and correlate the previous information with the information you have now and see if this is matching trend. All investments will have different peaks and troughs through different times of the year, so they should match up slightly, but if they are wildly different from last year then alarm bells should ring.