How Technology Can Help Drive Trading Strategies As "Business As Usual" Kicks off Again

How Technology Can Help Drive Trading Strategies As "Business As Usual" Kicks off Again

We are in strange times. The COVID-19 pandemic is an unprecedented event and the world trade is anticipated to fall between 13% and 32% in 2020. The bad news is, the health crisis timeline is fuzzy, and it is almost impossible to define when the world will get back to normalcy. The global trade slump could be worse than what we witnessed in the 2008-09 crisis and when the world economy will recover is unpredictable.

With businesses slowing down, economies stalling, and financial security being endangered, the conventional sectors including stocks and real-estate have now taken a back-seat and more and more individual investors and traders are now looking at Forex trading. Investors are opting to rely on US dollars and other strong international currencies to maintain and grow their portfolio.

Forex trading is decentralized, over-the-counter, and the largest market in the world by trading volume. But with erratic market trends, determining the right investment strategy seems difficult.

The Forex Market: In and After COVID-19

Like every other market, the Forex trading market also saw huge fluctuation with the advent of the COVID-19. The US dollar continued to appreciate against all of the G10 currencies (excluding the Japanese Yen and the Swiss Franc) and saw a small dip over the last weekend of April. And while the GBP saw a dip initially, it is now displaying stability amidst the national lockdown. Spot matching reached over 100 billion USD within one day which makes it evident that even in these super volatile environments, markets seek to move expeditiously. As most investors pull out their investments from emerging markets and look for ‘safe havens’ such as the US dollar, it is uncertain to say what the future will be after the COVID-19. The pandemic curve is yet to flatten and a lot depends on when and how it will stop impacting the global markets.

What is reassuring in these difficult times is that with Forex trading, traders have the assurance backed by stringent FX Global Codes Of Conduct. This means that Forex businesses have to adhere to size, scale, type, and complexity of the business and have to provide a plan for business continuity during uncertain times. The FX market continuity makes Forex trading safer during the times of pandemic.

Many experts expect the market to thrive after the lockdown ends, thanks to the positive sentiment but in reality, only time can tell. In these bizarre times, seeking help from technology to create trading strategies seems like a wise choice.

Technology for Defining Trading Strategies

Forex trading is “always-on” considering overlapping global time zones. This means that Forex trading can happen continuously, for most of the days. Traders today are enabled with mobile technology powered internet connectivity to trade from the comfort of their home. Furthermore, the rapid adoption of mobile devices has accelerated the development and availability of mobile apps for Forex trading, replacing the stagnant PCs

To begin with, for investors who are just starting out with Forex trading, automated trading platforms can help in getting started with ease. Also, the investors can choose the sophistication level offered by these platforms and invest the bare minimum until they are confident with the way trades work themselves out.

Forex trading no longer requires the physical monitoring of market movement, thanks to automation. Automation helps in monitoring of the market with the help of AI-powered trading bots that perform prompt technical analysis, track opportunities, and automate buying or selling without manual intervention

AI-powered predictive analytics engines analyze huge data volumes with the help of intelligent and self-learning algorithms (AI) and recommending fail-safe and profitable investments to traders.

Also, since the automated trading platforms do not feed on sentiments, the decisions are made purely based on data and stats.

With AI-powered charting tech, investors can expect speed and consistency in real-time data processing, helping them to drive strategies for trading. Big data tools can further help in the visualization, before taking any trading decisions.

Since the times are uncertain, there might be more than one strategy that the investors want to test out. With automated trading platforms, investors can experiment with different strategies, trade using multiple accounts, and diversify their investments, thus reducing the risk.

What Can Trading Houses Do To Solve These Issues?

As uncertainty in day-to-day life prevails, global trading markets are volatile, making it difficult to zero in on the right investment choices. And while it will take time for things to fall back into place and business to bounce back to normalcy, the HNIs, traders, and investors can turn to technology to create a robust Forex trading strategy that will help to weather the storm in relative safety.