January 6, 2014

Forex Strategies: Market Plummet Strategies

Forex Strategies

The forex market is not always an investor’s market. Investor fear exists for a reason, which is due to the times when confidence in economic, political, or world stability is in question. You will need to have forex strategies to avoid great losses when the market is in a plummeting state. In 2013 it seemed like this plummeting market would hinder fourth quarter growth, but as it continues things are holding steadier than politicians and some experts believe. It is a good market example and lesson to take to heart in order to understand what your reactions should be in this type of situation.

Forex Strategies for Government Shutdowns

There are three things you can do when the market is in turmoil. They do not need to apply only when there is a government shutdown, but you should definitely consider them during such a politically and economically charged time.

They are as follows:
· Check all financial markets and choose which one is faring better (i.e. stock, forex, commodities, mutual funds, or a different market around the world).
· Invest in safe havens like Swiss franc, Japanese yen, gold, crude, or bonds.
· Pull all your money from any investment. Leave it in the account, but make sure it is not trading on any shares, currency pairs or other financial asset.

The degree of risk you trade with determines which of these forex strategies you might choose from. A person with low risk intentions is going to pull their money out of any investment. It is safer in the deposit account without being traded during times of great economic and political turmoil. There is a potential to lose everything invested when the market is suffering from significant losses. You can always invest in safe havens and wait for the market to return as many experts do the same. You might lose, but eventually it bounces back. You can always play the market for the opportunity too; however, this last of the forex strategies is dangerous if you make a wrong move.

A government shutdown is nothing to be complacent about. There is every chance that like October 2013 investors will keep trading and not even run for safe havens. They figure the USA is not going to be stupid enough to let the entire country default on its obligations. The market has reacted to the shutdown, but rather than significant losses most are using forex strategies to enter into currency pairs for profit like buying EUR, AUD, GBP and JPY and selling USD.

The Longer Lasting Affect and Forex Strategies

The longer a government shutdown lasts the more it will begin to affect the currency markets around the world. There are potential recession worries for the USA because of the shutdown. There are also worries the globe will suffer economically the longer the situation lasts. For those who choose forex strategies where you buy in, wait and watch, and reap some profits you need to be hands on during the day. You have to watch for special reports that could tank your position quickly.



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