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The Eurozone Crisis: How World Markets Rally against the Odds


Photo by Jovan Milosevic

While the decline of the eurozone can hardly be considered as new or breaking news, its continually worsening state is certainly justification for front page headlines. This week it was announced that Europe’s levels of unemployment had hit a record high, with an estimated 25.5 million EU citizens currently out of work and unable to provide financial support for their families.

In addition to this, ongoing talks between the Troika (the European Union, International Monetary Fund and the European Central bank) and stricken Greece have hit a new obstacle, as approximately 2 billion Euros out of a proposed 13.5 billion Euro package is now being disputed. With the nation also facing up to the prospect of a further recession, the crisis shows signs of abating any time soon.

Forex Trading and the Eurozone Crisis: How are Investors Beating the Odds

Another striking and altogether more surprising aspect of the eurozone crisis is its failure to significantly impact financial trading, as global markets continue to rally against external economic hardship. This has largely been the case throughout the summer, as even the Euro managed to recover from its two year low against the dollar to record noticeable growth. So despite obvious and understandable market caution, it appears as though forex traders in particular are still able to profit while the eurozone crisis rumbles on.

It should also be remembered that despite the continuing fallout from the eurozone crisis, the Omni-present hope presented by potential bail out packages for Spain and Greece have helped to sustain market optimism. This has helped to keep forex trading levels high, although investors have obviously experienced a reduced appetite for risk and instead sought to consolidate their assets. Even with global forecasts for economic growth decidedly low, the volatile nature of the markets and wider economy will continue to provide hope and opportunities for investors.

Forex Trading in 2012: React to the Market not the Economy

Forex traders have numerous advantages over those who invest in other markets, and this also allows them to profit despite the worsening economic climate. For example, as a marginal trading method forex enables investors to minimise the amount of capital that the commit to each individual transaction, without significantly compromising their capacity to make a sizable and lucrative profit. This at least offsets any additional risk posed by the eurozone crisis, and ensures that traders can stay active despite prolonged market uncertainty.

Additionally, the right trading philosophy as can also reap significant rewards in the forex market, especially for those who have enough confidence in their abilities as an investor. Already accustomed to a volatile and constantly evolving market place, forex traders should focus on the rigid laws that govern change rather assessing a particular individual financial crisis as it unfolds. This means that instead of attempting to evaluate the potential impact that each eurozone development will have on your trading activity, you should utilise your market knowledge and make decisions that are dictated by fact rather than uncontrollable variables.


Any change for Forex Traders in Q3-4 2012?

As any experienced trader will testify, the forex market is unique in terms of the level of flexibility that it offers to investors. After all, in addition to being margin based and extremely well supported by online brokers and trading platforms, forex trading also provides investors with an opportunity to profit regardless of the wider market conditions.

It is this unique combination of factors that has empowered forex traders to rally despite the deepening economic gloom that continues to envelop the eurozone, and this in turn goes along way to explaining the huge global appeal of the foreign exchange. So long as you place faith in your intuitive understanding of forex and pay more attention to daily market updates than the specific developments of the eurozone as they unfold, then there is ample opportunity to achieve financial gains.

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ARB Team
Arbitrage Magazine
Business News with BITE.

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