Mulling Over Politics and Forex Volatility…
The Current Wild Forex Volatility On Political Fronts.
The definition of Forex Volatility is as follows:
Volatility (in Forex trading) refers to the amount of uncertainty or risk involved with the size of changes in a currency exchange rate. A higher volatility means that an exchange rate can potentially be spread out over a larger range of values.
Professional traders and economists know that politics is increasingly affecting currency movements all around the world, with elections, government policies and central reserve banks decisions causing major fluctuation in currencies and commodities. For examples: If you have been following the financial news, and media, then you will have noted how the Turkey’s lira slumped to a record last week as police took opposition leaders into custody, then the current policies in South Africa from the unpopular president and his targeting of the Finance minster Gordhan has made the ZAR extremely unpredictable, and of course everyone knows how the Trump Clinton elections are making investors extremely skittish…
Its all reminiscent of Brexit when the British pound weakened more than any other major currency, against the Dollar and many other major currencies besides, and of course more is to come when Article 50 is triggered soon and negotiations begin for an exit from the European Union. It’s not all bad though, because if you watch the news carefully, some very profitable trading strategies can be planned using politics and forex volatility just like clever economists, and expert brokers predict. Its uop to you to decide whether sitting on the sidelines and waiting is prudent or you want to take a chance and ride the waves!
Forex Volatility in your Favor?
Spikes in currencies can net in huge profits if you time the trades just right, and this is where binary options trading becomes your trading friend considering you can make quick trades that last from a minute to a few minutes just as policies are made and political decisions cemented in place. You need to be watching like a hawk, constantly reading up the news, and being smart with your trades. Don’t always listen to the economists, brokers, and professional traders because they have been seriously wrong in past predictions, during many major political events. We all know exactly how brexit pulled the wool over many of them, but no one can always be right so sometimes just use this information as guidelines.
Not only forex volatility comes into play during major political events, but also supply and demand of commodities that investors seek as safe havens the likes of precious metals Gold and platinum for examples, are also affected either way. Use online forex volatility calculators which can be found using a simple search in Google for that term, to set profitable trades, but keep your finger on the pulse, especially now while there are political upheavals in developing countries, and of course in the major players in world.
Heed the Broker Forex Volatility Warnings.
Whether you are trading the conventional way or with binary options trading platforms heed the warnings from brokers and professional traders. Right now you will be watching trading charts showing wild fluctuations during the US elections similar to what occurred during the Brexit vote in June 2016. Some clients suffered from severe losses while others gained handsomely by ignoring naysayers and probabilities predictions from economists.
Sometimes your strategy during times of forex volatility can be set on your own gut feel, and digging your heels in may allow you to enjoy huge profits. Sometimes the dinner table conversations of the layman can come true, and whatever was predicted by economists, professional brokers and large corporations all goes out the window. Alternatively sit back hold on to your investment and play it the safe way until forex volatility and commodity fluctuations in sympathy, all finally settle down again.