It goes without saying that one of the main areas that are affected by the COVID-19 pandemic is the economy – local, national, and global. In short, every business, be it run by a company or an individual, is now suffering losses like never before.
Naturally, as the economy gets more and more hurt, investors are doing their best to get their funds back, as well as to withdraw from projects they are a part of. As a result, the trading exchange has become one of the most affected areas of the economy, as stock exchanges crash, currency markets are more than just volatile, and so on.
Let’s take a closer look at how trading looks during the pandemic that we’re all going through at the moment!
The Forex Market
Let’s start with one of the more famous trading markets – namely, the Forex one.
Currency exchange is probably the most populated trading option in the last years, namely due to the addition of cryptocurrencies and other several minor currencies. The latter aspect allowed people from all over the world to engage in trading on the Forex market.
As for its status, if we take a look at some insights on FortFS, for example, we notice that quite a lot of the world’s currencies are at the moment in a decline, while only a couple of the major ones are able to keep their value.
Among the resilient currencies, we have the Swiss Franc, the Japanese Yen, as well as the dollar, which has probably seen the best evolution in terms of currencies so far.
The Stock Market
Next, we’ll move to the market that makes companies move and, one way or another, gives them value.
Needless to say, the stock market began to see drastic changes as soon as the simple outbreak was declared a fully-fledged pandemic. At that very moment, a lot of traders started to sell their stocks as they didn’t know what to expect from the future of the stock market.
Now, given that people were selling stocks at a very fast rate, the stock supply increased to a point where their value began to drastically decrease. As such, most global companies saw very low stock values – values that were not fixed by the many company shutdowns and layoffs of employees.
As statistics show, just like the Forex market, the stocks saw a significant plunge at the moment when the outbreak became a pandemic. From there on, traders tried to find the best course of action and, for many, selling was the only thing they could do.
The Bottom Line
Overall, trading is now very volatile and it is not advised that you engage in some wild trading schemes, even if you think you may make a profit – expect the unexpected, as they say!
Instead, pro traders recommend that their peers apply risk management tactics, keep track of any open positions on the market and their evolution, and engage in other practices that are meant to minimize loss.
This is because, at the moment and for the following couple of months, the world economy basically won’t know what to do in terms of stock and currency values. Rather than trading, it is better to keep a close eye on the trading exchange and monitor its evolution!
