Beginners Forex Education Forex Market

How Is COVID-19 Impacting the Forex Market?

I’m not here today to talk about algorithmic trading or systems or tools. I’d like to tell you something that is in the focus of traders in recent days and especially because it is an important issue because it affects the lives of many people. As you know, if it affects people’s lives it affects the economy and, of course, the currency market. But how does the forex market react in this environment? We’ll tell you…

I’m sure you’ve heard of Covid, but just in case, let’s discuss. It is a virus that we can catch through the mouth, ears, nose, and even the eyes and affects the respiratory system. Symptoms are dry throat, cough, sneezing, muscle cramps, breathing problems, high fever and can be as fatal as kidney failure leading to death.

It seems that there is a consensus and that the virus started in Wuhan (China) in about December 2019 last month and has traveled through Japan, Thailand, and now America. There are several hundred people infected and he has several deaths on his back.

How Coronavirus Impacts Markets

Understanding history will help us understand the reaction of markets in a similar case, bearing in mind that each circumstance is different from the previous one. The outbreak of the virus is reminiscent of the SARS pandemic in 2002 and 2003 that killed some 800 people, most of them from China and Hong Kong, according to World Health Organization data.

SARS had a significant impact on Asian currencies, in its rates and actions from the point where infections were officially identified by the World Health Organization in February 2003 to the peak of new daily infections.

How many times have we already warned that the markets least like fear and uncertainty? With this background, the investor keeps his portfolio and prefers to be out of the market before possible strong movements that affect him in a bad way. This leads to falls in global indices and greater volatility in the foreign exchange market.

Coronavirus and the Currency Market

To the point, Ruben. It is clear that because of the nature of the coronavirus the currencies that are most affected are the Asian ones. The Japanese yen (JPY) is acting as a refuge, as it usually does in times of economic uncertainty. That is why we can see in most crossings how it is being strengthened with respect to other currencies. The Chinese yuan (CNH) is looking very weak and in most pairs, we can see strong movements down the currency.

Also important is the Australian Dollar (AUD) which, due to its direct relationship with China, is being negatively affected. This is because of Australia’s trade relationship with China. Any signs of slowdown or risk directly affect AUD.

What to Do As a Trader

It is impossible to predict what happens with active x and establish clear rules for buying or selling in these situations. The ideal is as we always say to rely on cost-effective systems that have an advantage and management with connection and disconnection rules. Systems should be created by already contemplating data or market scenarios with high and low volatility. That being so, you should have no problem when events happen. Manage your systems as if you were a watch and adjust your risk so when the volatility is triggered it affects you as little as possible.

There are traders who prefer to stay out until everything happens, fully understandable as well. But remember that most of the time there’s going to be some event that’s going to create uncertainty for you.

Forex Market

COVID Crisis: USA Vs. Europen Market Recovery Battle

COVID-19 has without a doubt taken a toll on markets around the world. The United States and Europe, in particular, are battling to be among the first to recover some sense of normality. Which will prevail? Here’s what we have to say on the matter.

The US market is recovering faster than the European market. In particular, if we compare with the absolute high of mid-February, we see that the US market, measured through the SP500 index, is -16.79% below that high. On the other hand, the European market, measured through the DAX30 and Euro STOXX 50 indices, to take two examples, remains -22.02% and -24.24% below the maximum, respectively.

This divergence in the response of the US index to European indices is, in principle, unexpected. Without entering into data that the reader should already know in detail, it is known that in the European countries most affected by COVID-19, including Italy, Spain, Germany, and France, the curves of cases and deaths per day have already shown, at the time of writing this article, a clear setback.

The response of the US index to European indices is, in principle, unexpected.

While countries such as Italy and Spain are accused of having delayed and failed in their response to the virus, the truth is that the curves of new infections have stopped growing, entering a phase of recession, product of the strong measures of social isolation promoted in these countries.

This is not the case in the USA, where many analysts believe that the government’s response was even worse, and where both the new cases and the number of daily deaths, have taken much longer to give in, and continue still, albeit more slowly, to rise.

This temporary divergence in impact and response to COVID-19 would lead to the conclusion that the same should have happened with the impact on equity markets, that is, Europe should have anticipated its recovery to the United States. However, the opposite occurred, as can be seen in the chart below (in green the S&P 500 index).

“This temporal divergence in the impact and response to COVID-19 would lead to thinking that the same should have happened with the impact on equity markets… However, the opposite happened.”

Of course, the explanation for this is far from unique, and it would be a mistake to pretend to give an explanation by ignoring the interconnection that exists between the world’s financial markets today, which does not make it possible to study one case in isolation from others.

Even so, we believe that the lower impact and faster recovery of the US stock market vis-à-vis Europe is basically due to the different response of its central banks. In particular, the EDF took drastic monetary policy measures very early on, while the response of the European Central Bank (ECB) was later and more modest. But let’s look at it in detail. We believe that the lower impact and faster recovery of the US stock market vis-à-vis Europe is basically due to the different response of its central banks.

Everything must start from seeing the differences with which the ECB and the Fed faced the crisis for COVID-19. In the case of the ECB, the benchmark interest rate was set at 0.25% since 2016, its historic low. In particular, after the crisis of 2007-09, the ECB had to continue to cut its reference rate several more times in subsequent years, among other cases, to assist countries such as Spain, Portugal, and Greece, as well as countless other problems it had to face.

Let us remember that German bond yields, as well as those of many other Eurozone countries, have been negative for years. This meant that, by February 2020, in the face of the COVID-19 surge, the ECB had very limited room for maneuvering in its monetary policy.

Different was the case in the United States, where although the financial crisis of 2007-09 forced the Fed to cut its rate to historic lows, from 2016 to 2019 the rate could be increased successively. This fact, let us also recall, had inspired innumerable criticisms from Donald Trump towards Jerome Powell and the Fed, indicating that the Fed had made bad decisions by not cutting its rate, as while other countries in the world could place their debt (sell their bonds) at negative rates, a positive rate was still payable in the United States.

This difference between the starting position of both central banks ended up being decisive in our opinion, as it allowed the Fed to take drastic measures in the face of the COVID-19 crisis and the ECB could not do so.

“Different was the case in the United States, where although the financial crisis of 2007-09 forced the Fed to cut its rate to historic lows, from 2016 to 2019 the rate could be increased successively.”

As we know, very early on in March, the Fed was able to cut its benchmark rate by 50 basis points in the face of the sharp decline in equity markets. This move, while failing to contain the falls, was a sign that the Fed was ready to act.

-On March 15, again as an exceptional measure outside the FOMC meeting schedule, the Fed cut its rate again, this time directly to zero.

-On March 23, in addition to the previous measures, the Fed committed to an asset purchase plan to expand its balance sheet (quantitative easing) by a total amount, in principle, unlimited funds, an unprecedented measure.

Closer in time, on Apr 9, the Fed announced a new plan to inject up to $2.3 billion into the economy, including the purchase of state or municipal bonds. As is clear, the Fed’s monetary policy response was swift and drastic and adds to the fiscal policy that was also conducted in the United States with the same characteristics.

The Fed’s monetary policy response was swift and drastic and adds to fiscal policy. The ECB’s starting position was very different, with its interest rate almost at zero, it had no room for further cuts. All the ECB’s actions with regard to the crisis caused by the COVID-19 were limited to a single intervention, on 18 March, with the announcement of an asset purchase plan (quantitative easing) for 750 billion euros, substantially lower (one third) the one announced by the United States. The lack of further action by the ECB has been strongly questioned by analysts.

“The ECB’s starting position was very different, with its interest rate almost at zero, it had no room for further cuts.”

We believe that the criticisms are adequate, but it is often omitted to consider that the starting situation with which both central banks faced the COVID-19 crisis was clearly different. If we look at the positive side, there is indeed one thing to be recognised about the ECB’s only intervention, it seems to have been with timing or decision of the right time. The starting situation with which both central banks faced the COVID-19 crisis was clearly different.

As we know, the intervention is 18-Mar, which practically coincides with the minimum of the stock markets. In other words, we see that the ECB had far fewer tools at its disposal than the Fed, but it used them with better judgment, at least in the decision of the moment.

In conclusion, US equity markets have suffered smaller declines than Europeans and have recovered faster, although behind this is greater Fed intervention (at a higher cost of resources for that central bank).

The ECB was more modest, with only one intervention, but more precise at the time of making it, which implies a much lower cost of resources for that central bank. What seems very clear is that investors believe that the US economy has a greater capacity and potential to face this extreme event compared to Europe, which, while hit by the pandemic at first, The next few weeks will be dramatic for America.

The United States starts from a better baseline, good employment indicators, and modest but acceptable growth, and has the institutional capacity to react more quickly to problems. On the other hand, the Eurozone is based on a vulnerable situation, a stagnant economy and high levels of unemployment for the level of development, The same institutional complexity that has not allowed it to re-emerge from this macroeconomic situation is what leads to a lack of responsiveness.

“The United States starts from a better baseline, good employment indicators, and modest but acceptable growth, and has the institutional capacity to react more quickly to problems.”

Only the ECB was able to carry out measures, because of its independence, but with little room for maneuvering. On the other hand, the main European leaders have not coordinated powerful measures to get out of this extreme situation. For all these reasons, once again the North American stock market is better positioned to recover in relation to its European counterpart and this has been reflected by the market, unless once and for all the Eurozone wakes up.

Forex Assets

Coronavirus: What are the Best Pairs to Trade Heading into 2021?

At the moment of writing this article, we see a lot of turbulence involving the COVID-19 mixed in with the dramatic US elections aftermath. The pandemic presents a unique environment, one which cannot be categorized into a recession cycle or anything we have experienced before. We see the first large scale pandemic in modern history. Does this mean some assets are going to be better performing?

It is hard to predict future movements, you can ask any serious investor such a question. They are bombarded with them and what most say is that they do not know. But they can rely on some data that points to some expectations. It’s logical to see certain commodities and precious metals tied to economic activity level, still, it is not known exactly when oil is going to spike with the activity coming back to normal. Nor we may expect the same spike will happen with metals related to industrial activity. Entering any reversal trade based on a hunch is a great way to lose, but we can stay in certain safe heavens until it is time to slowly go into risk-off assets after clear indications the worst is over. 

Let’s see what happened since March, once the pandemic went viral and global. We will first analyze risk-off currencies such as NZD, CAD, AUD, then the neutrals, GBP, EUR, and lastly safe heavens USD, JPY, and CHF.  The NZD did not endure any special selloff. According to the picture below which represents the NZD basket against other major pairs, we see the exact opposite. Is this because New Zealand fared well in the fight against the pandemic than other countries? Unlikely. The correlation between the COVID-19 patient numbers and the currency directions is random in most countries, therefore trading based on these statistics is a bad idea.

The AUD followed a strong positive correlation with the equities or indexes. It is almost copied price action. The vertical red line marks the March pandemic breakout. Before the breakout, AUD was in a downtrend that looks like it just amplified a bit before it went long again. This price action seems it does not care about the pandemic at all. If we want to pick a currency to trade in 2021, COVID-19 impact on a single economy should not be our criteria. However, some other assets as mentioned above are directly affected. 

Canadian Dollar is considered correlated to oil. Most of the informed traders know about the oil price shock once the pandemic forced lockdowns in most of the world, especially developed economies, except China. From the CAD basket chart below, we see extreme whipsaws and price action that spells trouble for trend followers. We cannot say this chart is positively correlated to oil, we also do not see a small correction as with oil. How price action is going to look like in 2021 based on this info is completely unknown. At this point, CAD seems to be the worst currency to trade unless you have some special range-effective strategy.

So what we see in risk-on currencies is that AUD and NZD do not care about COVID-19 but are somewhat in-line with indexes. NZD is not the same copy, although it tends to move like the AUD. New Zealand was one of the best countries to cope with the pandemic, but this is not the criteria you should rely on. One should know Australasia currencies are very tied to China’s economy, a country that seems to know how to control the spread of this virus. However, China relies on export and inevitably depends on importers such as the USA and EU. 

Great Britain Pound has a lot of major fundamentals affecting its economy. Brexit, internal political struggles, COVID-19, and discouraging economic indications. GBP price action chart shows a strong bearish move than almost as strong pullback after the pandemic had started getting global. Chart analysts will easily spot three strong support points after the initial shock. Similarly to the CAD, GBP is extremely unpredictable by any means, probably only partially good for range-bound trading strategies. 

Euro and GBP seem to be in the same boat. EU countries took catastrophic hits to their economy and health systems. Has this affected the EUR? It is, but not in a negative way. By looking at the price action below, we see a strong uptrend after the pandemic start and then calm consolidation that lasts for months. Is the EUR the best currency to trade with? Depending on your strategy, range-bound reversals with channel indicators are probably the best way to go here, pairing the EUR with another ranging currency such as the GBP. In 2021 it is hard to predict what will happen to the Eurozone, but for now, it seems not much can shake this market. 

Swissy is copying the EUR. According to the price action below it is not behaving as the safe-haven currency, more like the EUR clone. Does it mean it lost its reputation? Unlikely, it just means it is not a safe haven in situations when the whole world shuts down. Similar to the above range-bound currencies, it is not a good pick for trend following strategies. 

JPY is not regarded as a safe haven apparently once COVID-19 went global and serious. It is just more volatile than the CHF but after the 2020 US elections and the recent vaccine announcement, it is testing its major support level before the pandemic. It is yet to see if this is just another spike before the real economic downturn is about to start.

Finally, the USD went sharply up but investors soon realized the US economy does not have that safe haven characteristic, what’s more, the pandemic has a strong impact on the ideals of this country, pushing the USD down more than any other currency. 

All this can provide us with some results which are the best pairs to trade until now during the COVID-19 since March 2020. The biggest difference index or pairs that moved the most are AUD/USD, NZD/USD, AUD/JPY, NZD/JPY, and to a lesser extent EUR/USD and GBP/AUD. Therefore, these pairs are the best for trend followers. Range bound strategies would probably like EUR/CHF, EUR/CAD, CAD/CHF, and AUD/NZD. Is the same going to continue in 2021? If vaccines prove to be effective we can probably see risk on sentiment again, however, the pandemic might have pushed the economic cycle off the cliff, causing another economic crisis on steroids.

Recently, after the US elections, we have witnessed interesting events. Pfizer and its partner, BioNTech announced the vaccine after the US elections, spiking equities up. Gold went sharply down back to the pandemic showup rally support. Gold futures experienced a single day decline not seen in seven years. However, some assets enjoy a real safe-haven personality – cryptocurrencies. Bitcoin is back to $15k levels at the moment of writing of this article, resembling the famous rally from 2017. So, gold is not really going to be a pick for 2021 unless we are into recession, Bitcoin on the other hand is on a good track to be both, pandemic safe heaven and also a recession safe haven.

Cryptocurrencies are volatile and require adapted strategies to trade. They are still considered risky assets and should be only traded with also good risk management. If we had to pick an asset to trade, it would not be currencies unless we see the end of the pandemic. In that case, going back to risk-on currencies seems a reasonable choice. If an economic downturn is about later, it is going to be global so precious metals and crypto could be the right choice.

Forex Market Analysis

How Elliott Wave View of NASDAQ Anticipates Trump’s Coronavirus Outcome


The NASDAQ 100 Index fell 2.2 percent on Friday’s trading session on the news of the US President Donald Trump’s positive coronavirus test. Still, the price action unveiled the wave B completion, suggests further declines for the US technologic benchmark in the following trading sessions.

Market Sentiment Overview

During the last trading week, the NASDAQ 100 volatility has been driven by market participants’ expectations facing the first presidential debate between US President Donald Trump and former Vice President Joe Biden.

The advance experienced by the technology index was boosted by the expectation of new economic stimulus, driving the NASDAQ 100 to raise over 4%. However, its gains were lowered after the announcement of President Trump’s positive Coronavirus test, leading it to ease up to 2.74% on Friday’s trading session.

The following 8-hour chart of NASDAQ 100 reflects the 90 days high and low range. In the figure, we distinguish that the price halted its advance towards the extreme bullish sentiment zone, closing the trading week in the bullish market sentiment area and under the weighted 200-day moving average. This market context leads us to weight a neutral market sentiment.

On the other hand, the 12-hour chart corresponding to the NASDAQ 100 Volatility Index shows the 90 days high and low range where we distinguish a sideways movement consolidating above the 200-period weighted moving average. This volatility context of the NASDAQ 100 index, added to the new test of the upper-line of the consolidation structure, leads us to expect an increase in volatility within the coming trading sessions.

Summarizing, NASDAQ 100’s market sentiment unveils that this index and its volatility figures will be driven by the news on the upcoming presidential elections on Tuesday, November 03. In particular, NASDAQ 100 could turn bearish in the following trading sessions.

Elliott Wave Outlook

The overview of NASDAQ 100 shows the full development of a five-wave bullish sequence, which began on June 15, when the price found fresh buyers at 9,383.6 pts pushing the price towards new record highs September 02 at 12,466.6 pts. Once reached the all-time high, the technological index began to perform a bearish corrective movement, which remains in progress.

The following chart shows the NASDAQ 100 in its 4-hour timeframe, where we distinguish that the price has completed a five-wave impulsive structure of Minor degree labeled green. At the same time, we can confirm that the Elliott wave theory rule, stating that there must be only one extended wave. In this case, the NASDAQ 100 index developed a fifth extended wave that ended on September 02 when the price found resistance at 12,466.6 pts. Once the fifth wave of Minor degree concluded, the NASDAQ 100 began performing a corrective sequence, which remains in progress.

In particular, the completion of the wave ((c)) of Minute degree identified in black, which completed the wave B of Minor degree, coincided with the news media release concerning the US President Trump’s positive test, activating the beginning of the wave C, labeled in green.

The following hourly chart of NASDAQ 100 illustrates the first bearish movement’s internal structure corresponding to its wave (i) of the Minuette degree identified in blue. This first downward wave reveals a drop in five moves of Subminuette degree identified in green in its internal formation. Once this second move has been completed, the technological benchmark should resume its declines.

Finally, considering that wave (i) of Minuette degree completed its descending move at 11,220.8 pts on Friday 02nd, the price could retrace, forming its second wave of the same degree. In terms of the Dow Theory, this retrace could be between 33% and 66%, or between the 11,352.3 pts and 11,483.7 pts, where NASDAQ 100 might start to develop a new decline, corresponding to wave (iii) in blue.

Crypto Daily Topic

Why the United States Senate is Mulling over Digitizing the Dollar

About two years ago, the concept of central bank digital currencies (CBDCs), particularly in the United States, seemed far away in the future. Sure, there have been several studies exploring the implementation and use cases of CBDCs, but to the average person, the concept was still unclear. Fast forward two years, the Senate Banking Committee tabled a bill known as “Banking For all Act” that seeks to digitize the U.S.U.S. dollar. 

Led by Senator Sherrod Brown, the bill came at the height of a global pandemic – the Coronavirus outbreak – which has prompted the U.S.U.S. government to offer taxpayers a stimulus check to help them weather the economic recession caused by the epidemic. In a press release, Senator Brown laid out the details of this bill by saying that if implemented, the legislation would allow Americans to access their stimulus funds without relying on expensive check cashers. Unfortunately, the proposed legislation didn’t make the final draft of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As a result, the distribution of the first $1200 stimulus check was riddled with issuance glitches since the existing infrastructure doesn’t support the nationwide disbursement of funds. In fact, it is reported that more than 35 million Americans are yet to receive their first stimulus check. 

The digital dollar debate Gets a second chance.

Under the current system, Americans have to wait for direct cash deposits or physical checks from the U.S. Treasury Department. As such, those without a bank account filed with the Internet Revenue Service (IRS) cannot receive the stimulus check. At the same time, with respect to the spread of Coronavirus, physical cash/checks can increase the spread of the disease, countering the government’s efforts of flattening the curve. This created a new momentum for the reintroduction of the digital dollar proposal as an efficient way of distributing funds. 

Building on this momentum, congresswomen Rashida Tlaib (D-Mich.) and Pramila Jayapal (D-Wash.) introduced a proposal to have the federal government issue a $2,000 stimulus check through the Automatic BOOST to Communities Act (ABC Act). Under this act, Congress will authorize the Federal Reserve to create ‘FedsAccounts,’ which are, basically, digital dollar account wallets. This way, U.S. residents and businesses will be able to access funds through an app on their phone. 

Following up on ABC Act, the Senate Banking Committee recently held a virtual meeting to discuss the digitization of the dollar, chaired by Senator Mike Crapo. In attendance were four ‘witnesses,’ among them being the former chairman of the U.S. Commodity Futures Trading Commission (CFTC), Christopher Giancarlo. He is also the brainchild of a non-profit think tank known as the Digital Dollar Foundation (DDF), which seeks to advance the cause of government-issued digital currency. Recently, the foundation partnered with Accenture – a global leader in CBDC advancement – to form the Digital Dollar Project. Under this merger, a whitepaper was released explaining a “Champion Model” for what should be the essential technical designs of a digital dollar. 

The Champion Model 

As outlined in the whitepaper, the digital dollar doesn’t seek to replace its fiat counterpart, but rather act as a third form of the national currency. As such, the Federal Reserve will maintain its control over the monetary policy and distribution of the digital dollar. 

The only difference between the proposed digital dollar and the fiat currency is that the former will be distributed in the form of tokens instead of an account-based model used by the latter. Through tokenization, all transactions will be managed by a digital ledger that records and authenticates digital dollar tokens to ensure that they are genuine and not double spent. 

To kick-start, the distribution of the digital dollar, commercial banks, and payment processors will exchange their fiat currency reserves for digital dollars, and subsequently distribute them to customers via apps or debit cards. 

Pros and cons of a digital dollar 

The main advantage of a federal issued digital dollar is that it will enhance financial inclusion. This is especially important with the ongoing issuance of stimulus checks whereby the unbanked population missed out on the first disbursement due to a lack of access to financial services. Even for the banked population, the current payment processors are inherently slow and costly to send money. However, the blockchain architecture supporting the digital dollar can facilitate efficient transactions at a more affordable rate than the existing infrastructure. 

Besides the advantages, there are various concerns about the use of tokenized dollars. Most of these concerns are centered around the privacy and centralization of users’ data. The CBDC will be issued by the Federal Reserve, meaning that the government will gain absolute control of users’ financial data. Also, with the government’s reputation for running mass surveillance programs, the incoming digital dollar may be a new system of monitoring the masses. 

Beyond payments

The digital dollar proposal is yet to get a green light from Congress. But, having sparked the attention of legislators, it conveys an overwhelming sense of urgency that the government should work on a CBDC sooner than later. Moreover, the Digital Dollar Project whitepaper emphasizes the need for digitizing the dollar by laying out that other national governments have already started pilot programs for their native CBDC. 

China, in particular, is testing its native digital currency, which will be included in payment systems of various multinational companies such as Starbucks and McDonald. Of particular concern is China’s potential to push its digital Yuan in emerging markets and international trade. If successful, the digital Yuan has the potential to unseat the U.S. dollar as the ideal reserve currency. 

Facebook’s plan to launch its digital currency – Libra – has also had a hand in spiking the government’s interest in designing a digital dollar. Even more recently, the Libra association modified its whitepaper to include a series of fiat-pegged stablecoins rather than just one multi-currency backed token as initially planned. 


It remains unclear how soon the digital dollar will come into existence. However, given the economic pressure from the Coronavirus outbreak as well as competition from China’s digital Yuan, the digital dollar debate will continue to linger in the minds of policymakers for long. Ultimately, it is great to see legislative attention on digitizing the dollar using blockchain technology, as this promotes the acceptance of cryptocurrencies. 

Forex Videos

Forex! How To Make Money During The Coronavirus At Home


How to earn a living during the Coronavirus while stuck in isolation

There is no shying away from the fact that we are currently living in unprecedented times. With governments across the world instructing businesses to close their doors, forcing people out of their jobs, as well as being ordered into self-isolation, which will leave many people facing huge debts, and many will go broke with some people losing their businesses and even their homes.

This is not fear-mongering; this is an absolute fact. The world is facing a global recession and a financial meltdown. And things will not improve until such time as the virus has been beaten and vaccines are made available. And because of the unknown nature of the virus and the fact that vaccines can take many months to bring to the market, the dilemma that faces the world is that this is too much of an unknown to be able to say when things will return to normal.
However people are adaptable and will search for opportunities to make a living, and the old adage “invention is the mother of necessity” springs to mind, and where people will reinvent themselves with new business opportunities and where because they will mostly be in isolation those opportunities can only arise online.
Therefore, isn’t it about time that you considered working in the forex industry? Because no matter what happens, the money markets continue to operate even during crises such as we are faced with at the moment.

The benefits of working in the forex industry are that you can set up a business quickly and with very little setup costs. Indeed, all you need is a decent computer and internet connection and then choose a broker who to trade currencies with, and whereby your initial outlay can be as little as $200 in order to start trading, although ideally, you would need to put up at least $1000 in order to be able to realistically begin to make a decent living.

The forex market is the largest financial market in the world and is open 24-hours a day five days a week and where anybody can participate. Even during this crisis many institutions and professional traders, all the way down to retail traders, make money by using chart patterns they see on their computer screens to tell them when currencies – which are always traded in pairs – are too high or too low against their counterparts and therefore may be ready to rise or fall. Traders simply bet on the rise or the fall in currency pairs in order to make a profit. Effective tools can be implemented to minimize losses.

The forex market is a global market and is not centralized, and therefore nobody owns it. Transaction costs are low, and here at Forex Academy, we have an abundance of educational material where you can learn all about trading in the forex market, and we can even show you how to open a risk free demo account to practice what you learn with us before you risk your money for real.

The many articles, posts, and videos have been written by professional financial traders who trade the markets even during these difficult times, and want to share their success with you so that you can have an opportunity during these dark times to learn how to successfully trade forex.

Forex Videos

A Black Swan Event, No, It’s A Flock! – How To Trade During The Crisis!

A Black Swan Event, No, It’s A Flock

We are undoubtedly in the worst economic crash the global economy has seen since WW2, and the financial impact may be even more far-reaching. With the financial markets in turmoil and no end in sight, maybe we should pause and take a look at what’s happened over the last few weeks and see if it can give any pointers to future direction, especially within the forex space.
In January, in our video on How to guard your financial assets against the Coronavirus outbreak, we warned that stock indices across the globe would come under continued selling pressure. Although the virus was mostly contained to China, it wasn’t possible, at that time, to predict the terrible crash that we have seen. It was only really when the virus took hold of Italy and broke out in Hong Kong and South Korea, that market jitters forced investors to see the potential of this deadly outbreak and begin selling stocks. Nonetheless, anybody who heeded our advice may well have reduced their exposure to stocks and been financially better off as a result.

Example A

In our February video about How to trade the Australian Dollar and The Convid-19 Pandemic Black Swan Event, again, we called it correctly. With Australia heavily exposed in China, it was highly likely that the Aussie dollar came under extreme selling pressure against the Dollar and that is exactly what happened and where we have seen highs of 0.70 in AUDUSD to a sharp decline to 0.54

Example B

We also warned that New Zealand, whose GDP is heavily dependent on their exports into China, may find that their currencies come under selling pressure too. It has also seen a huge decline against the Dollar from 0.6750 to a low of 0.5490.

Example C

We warned that countries such as Japan and Switzerland would find that their currencies grew stronger due to their safe-haven status. And where USDJPY declined from 112.20 to a low of 101.00 initially, before reversing due to concerns about the virus on the GDP of Japan.

Example D

We saw USDCHF tumble from 0.9855 to a low of 0.9160 and warned that the Swiss National Bank would likely intervene in the markets to drive the value of their currency lower for export purposes. That is exactly what happened.
We also warned that all of this could only mean one thing for the US dollar: it’s directional bias will be to the upside. Again, that’s exactly what happened with the Dollar index at highs around the 102.00 level against the Forex Majors.

Example E

So where to from here? Well, let’s just take a look at the 1-hour chart of the GBPUSD chart from Friday, 20th March. The Arrows show that there was extreme price action, which amounted to over 1400 Pip swings in this pair for this one-day period. This is almost unprecedented in financial trading. It can only tell us that the markets are thinning in volume and leverage and that institutional traders will be largely standing on the sidelines because as the crisis deepens the UK government, just like other western governments, are closing down, albeit temporarily, businesses that produce gross domestic product income revenues. All of that income has suddenly evaporated and gone out of the window. We are now in a situation where governments are financially bailing out business sectors, and they are doing that through borrowing. The burden of the debt that will grow and grow, month after month, as the crisis continues, cannot be predicted, and in fact, the repercussions will be the basis of a secondary crisis which will emerge at the end of the epidemic, due to overburdening debt caused by a virus, while countries and their workforces get back to normal in order to reimburse governments’ coffers in the form of taxation.

And nobody can predict when this virus will be contained enough for the markets to steady themselves. It will only happen when good news emerges, and this does not look at all possible or likely in the short term.
Therefore as institutional and professional traders are waiting on the sidelines and reducing leverage, we would advise retail forex traders to also exert extreme caution in trading these markets while the current crisis persists.

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Protect Your Assets During The Coronavirus outbreak – Whats About To Happen In Forex & Crypto

How to guard your financial assets against the Coronavirus outbreak

The ink is still dry on the United States and China phase one trade deal agreement, and already China’s commitment to purchase goods has been very unexpectedly hampered by the Coronavirus outbreak.

With 56 million people under lockdown in China, because isolation and quarantine is the best way to try and prevent the spread of the deadly virus, it poses difficulties for China to import and export goods, so long as their country is in a stranglehold situation.

Similar to the SARS virus, which also started in China and lasted from November 2002 to July 2003 and which caused 800 deaths while reaching over 30 countries, the Coronavirus is an unknown entity in terms of its potential mortality rate and therefore nobody knows how long this new contagion will continue to grow and accelerate in China. It is possible that it could cause a pandemic across the world. But at this stage, it is difficult to say how it will impact on global economics in the medium term. Certainly, the longer he goes on, the more of an impact it will have on the gross domestic product of China and all of the countries that it does business with.

It is important to say at this point, that the thoughts and prayers all of us here at Forex Academy go out to all of those people who are and will be affected by the virus. And the thought of trying to take advantage of this terrible situation and make money when people are suffering and dying is absolutely crass. However, those of you who are currently in trades that could be affected by this outbreak have a right to know how to protect yourself while this awful situation continues.
Firstly, as mentioned earlier, this will likely affect the gross domestic product of those countries who do business with China and, of course, China itself. Therefore we might expect that stock indices across the globe may come under continued selling pressure. Recent record highs of some are already well off their highs. And those countries which are heavily reliant on exporting goods and services to China will also be affected by their currency rates falling. But not in all cases!
So let’s take a look at what might happen the longer that this goes on. This is considered to be a Risk-off event, where investors will diversify from risky assets and move to ‘A’ rated bonds and Treasuries, gold, cash, and other safe-haven assets.

For example, Australia and New Zealand, whose GDP is heavily dependent on their exports into China, may find that their currencies come under selling pressure. While countries such as Japan and Switzerland find that their currencies’ grow stronger due to their safe-haven status, and although bitcoin is off its recent highs and is considered to be in a slight downward channel at the moment, investors might be sitting on the sidelines waiting for opportunities to buy this asset.

With the United Kingdom due to leave the European Union this week we might see the pound find volatile ground due to the uncertainty pertaining to the pressures of completing a trade deal within the next 10-months with the European Union or face the possibility of crashing out of the euro area with no deal after the transition period ends in December 2020. The virus situation could cause pressure on the pound as the market looks at the overall risk sentiment.

The Euro has also come under selling pressure recently mostly due to bad economic data and a dovish stance taken by Ms. Christine Legarde, president of the European Central Bank, whose recent comments put the Euro on the back foot.

All of this can only mean one thing for the US dollar: its directional bias will be to the upside.