FOREX

Did COVID-19 Save the Forex Industry? – Finance Magnates


It’s no secret that the forex industry has had its share of struggle these past few years; a lot of ups and downs, and as of late, more downs than ups. 

Starting from the 2008 financial crisis and continuing with a 10-year recovery, the forex industry became all the more difficult to operate in. Finding clients turned into a hassle; getting them to trade is a whole other story. 

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But that’s not the case today. In this time and age, a new virus breed has come to save the forex industry; ironic isn’t it? COVID-19 came in like a natural disaster, wreaking economic havoc across the world in almost every sector, with some industries having to halt their operations. But as they say, with chaos comes opportunity… and so it did. 

You see, these past few years have seen both volatility and trading volume in forex markets wane; as volatility decreased, so did the opportunities to capitalize on, and hence the consequential decline in trading volumes. It’s been tough and to be bluntly honest, a little boring in the markets. 

The coronavirus came in to turn things upside down and inside out for the industry. If we were to look at the yearly trend of the search term ‘online forex trading’, we’d see a significant spike in the number of searches starting around the time COVID-19 hit the world, and not just China.

So what exactly happened here? Well, the bottom line is that due to self-isolation through forced lockdowns and major lay-offs across many industries, people found themselves house-bound with limited options to try and generate an income or at the very least keep themselves mentally stimulated.

Some sought solitude in Netflix binges whilst the more savvy ones decided to take matters into their own hands and educate themselves in the forex market. 

Forex trading as a means to make up for the lost source of income has proven quite useful, not only potentially benefiting the trader but also the forex brokers and the industry as a whole with this very noticeable up-tick in retail client trader numbers. 

However, in the famous words of Uncle Ben ‘with great chaos, comes great opportunity!’. What the former Fed Reserve Chief meant by this timeless one-liner was that when uncertainty grips the masses, shifts in fundamental influences occur, creating greater market volatility for traders to take advantage of.

So why is volatility such an important factor in the resurgence of the forex industry? For starters, almost everyone – whether young or old – hates boring; boring is this chain that won’t break.

Volatility is seen as the breaker of chains, here to remove the shackles that bind investors, shake things up, and of course, bring along a whole set of new opportunities.

This recent volatility has managed to entice even the hardest to please investors out from under the woodwork ready to begin hunting for new opportunities.

An immense benefit to the forex industry, as more volatility means more trading volume – something we’ve been starving for, for quite some time.

Here at Royal, we’ve seen this first hand as many of our traders have seen this as a sign that they need to get back into the market.

Royal

It’s been a tough few years for the forex industry, that much is true, but it seems that COVID-19 has brought back the spark.

Let’s be clear though, in no way am I undermining the repercussions of this virus and its untold damage to people and their economies; not to mention that we haven’t seen the end of it yet.

But to look at things with a silver lining, given life tends to give as it takes, animals are happy and the air we breathe is cleaner; NASA satellites have documented significant reduction in air pollution, in major cities across the world  – 20-30% in many cases. 

There’s also the fact that the forex industry is great again. 

Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.

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