4 Reasons Why Forex Trading Is a Recession-Proof Activity
You’ve probably heard it all before– Forex trading is risky, the Forex market is too volatile, you’ll lose all your money in the long run and so on.
Yes, it is true that trading the Forex market is risky business but it can also be the investment that can save your finances during a recession. What do we mean by that? Here are our top 4 reasons as to why we believe Forex trading is the best money-making activity to try during economic downturns.
You Earn Money In a Bear Market
Most people are familiar with how the stock market works. If a company does well, it goes up in value. If you happen to own stocks of that certain company, you earn when the price per share goes up. This is called taking profit in a bull market. However, things are a little different downtrends or bear markets. In bear markets, you won’t be able to make money in stocks. Whenever the market is poised to make a downward reversal, then you should exit your trade so you won’t suffer losses.
Forex trading is a much different animal compared to stocks. In Forex trading, you are trading a currency pair. This means that you are expecting one economy to be better than the other. If your expectation is correct, you will earn money.
For example, the past few days have shown that the USD has been slowly weakening after achieving a safe haven status. That’s why many people have been shorting or selling the dollar. Conversely, the JPY has been pretty stable which is why the USD/JPY became a pretty good opportunity to trade. In this situation, traders will be shorting USD/JPY because the US is in a bearish state and Japan is pretty sturdy.
With that in mind, you can make money even if an economy is not doing well.
It Cannot Be Brought Down By Disasters
One of the most appealing things about the Forex Market is that it cannot be brought down by disasters. One of the best examples is the Coronavirus pandemic which is happening right now.
Because of the spread of the Coronavirus, many people have lost money in the stock market, many businesses had to close shop due to the worldwide lockdowns, and many employees had to be laid off because their employers couldn’t sustain operations. Despite all of this, the Forex Market is still very much alive and kicking. In fact, it’s moving even faster than normal.
So even if stocks, businesses, and employment all stop, you can still make money in the Forex Market as long as you know how.
Movements Are More Volatile
On a normal day, the Forex market is already very volatile. What more during pandemics and disasters? Granted, this kind of volatile movement poses a little bit more risk on your end.
But with the right Forex edge and good risk management, you can ride on extremely big waves allowing you to make a lot of money in a short period of time.
That is– if you know what you are doing.
There Is Always Opportunity To Be Found
Notice that even during this worldly economic recession period, there are still certain currencies and commodities that are doing well. That’s because the investors and traders need a safe and stable place where they can put their investments during trying times. Gold has always been a top choice for a safe haven. This is why it has already been rallying during the past few days.
So even if the economic outlook of the world is pretty bleak, there are still some opportunities that you can look for if you search the Forex market. There are safe commodities such as Gold and Silver that you can park your money in while the pandemic lasts.
There are also some economies that are more stable than others. Even if an economy fall, they won’t fall at the same rate as other economies. If you put your money in a stable economy and pit it against a fast falling economy, you will make some profits.
Those four reasons will immediately tell you that the Forex market is actually one of the safest investment mediums you can turn to during economic turmoil.
However, we’re not saying that you’re guaranteed to make money in the Forex Market. First, you need to acquire the skills on how to read the market. Next, you must come up with a strategy that can give you an edge. Last, you need to learn proper risk management so that you can protect your account from losing more than it can chew.
Here at Learn to Trade, we will teach you all of those things. Our expert coaches are dedicated to help you prepare for economic meltdowns by empowering you with the skills to look for good opportunities.
To learn more about Forex Trading, join our FREE introductory webinar by clicking on the “Register Now” button below.