Markets have changed. Time to change Strategies.

How to trade during COVID-19?

Let’s talk about what strategies will be relevant in the current global cycle, and which ones should be forgotten for now.

Periods of high volatility always follow periods of low volatility. It always has been so, no one has canceled cycles in the markets, and at the moment, we are moving into a new cycle, the cycle of high volatility.

If during periods of low volatility strategies for returning to the middle usually work, then in periods of high volatility breakers, trading strategies with the trend, and scalpers are in a big plus. That is to say, the most popular are all the strategies that follow the movement in the market, but according to which the price does not have to return to average values.

This is the time of high opportunities, the time of good movements. That’s why it is so important to work with a reliable broker company as JustForex Broker.

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Why did this happen?

In this case, as you already know, coronavirus and, as a result, a decrease in business activity all over the world are to blame. Let’s consider the example of oil: logically, the less business activity, the less oil is used, oil consumption has decreased, prices have dropped, Saudi Arabia has begun a policy of cheap oil, other countries have refused to reduce production. As a result, we have such a situation in the market now.

We are on the verge of a global crisis and, most likely, at the very beginning. We are on the threshold of a recession and a slowdown in the economy. It is also worth considering the fact that one of the leaders of the US global economy is now in 3rd place in the number of patients with coronavirus, and this directly affects the economic condition in the whole world. Since China has massively stopped production (although at the moment many enterprises have already resumed their work), it is expected that their downtime will come around somewhere in July-August and this has already influenced almost all industries. And due to such collapses in the economy, there will be sharp movements in the Forex market.

How to determine if a strategy is out of date?

How to understand, is this just a drawdown period or your strategy is outdated and needs to be changed?

When something like that happens in the world, some global change, you need to be on your guard. It is advisable to suspend all robots if you are actively using them. Markets should calm down a bit, then sharp movements on the chart will become smoother, but they will remain. There will be no quiet harbor soon.

What should traders do?

Traders can go in two ways. The first one is to adjust and optimize your current strategies. If you have a strategy, based on a calm market built on returning to the middle, then you need to change the strategy.

Pay attention to the most global news, visible to everyone, such as a decrease in oil prices, the number of COVID-19 cases, labor productivity, GDP. The more people begin to understand how much business activity has decreased, the more such movements are forthcoming.

In general, an interesting period is starting for traders now, the period of active trading.

The markets have changed, and if your strategy has stopped working, it might be worth revising and changing it. In the coming years, there will be a movement in the market, there will be an activity, and naturally, this is a huge opportunity for earnings with JustForex.