Trading strategy during the coronavirus, what has changed?
There are numerous trading strategies that have been used for decades in the Forex or stock markets.
But there comes a time when many classic strategies stop working, especially during periods when the global economy is affected by unusual factors.
One such factor, currently, is the COVID-19 coronavirus, whose impact on the global economy is enormous.
This has led to some well-known stock trading strategies ceasing to work, while previously profitable advisors are now trading at a loss.
So, how can we determine which strategies will work and which ones can be abandoned for a while until the situation stabilizes?
The longer the forecast based on technical analysis, the lower the probability of its success.
Why does this happen?
It's quite simple. Imagine that your indicator shows market oversold and a high probability of price growth.
But at this time, the government of the country whose currency you bought introduces quarantine measures, thereby spurring the decline of the national currency, and the exchange rate begins to decline again, despite the fact that the market had previously been in a state of oversold, breaking through all previously established levels.
Therefore, in this situation, I still recommend using more fundamental analysis in your trading. Technical analysis is only justified when trading on the shortest timeframes using pipsing or scalping .
Furthermore, you should pay special attention to the performance of advisors designed for trading on medium or long timeframes. Their error rate may increase, leading to losses.
A period of instability in global markets is an excellent opportunity to make good money, but only if you trade cautiously. Open trades based on signals received from the news or data obtained after conducting a fundamental analysis of current trends.
If you closely monitor the news and analyze price levels, now is the time to maximize profits due to record market volatility .
