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7 Forex Trading Tips for African Traders Post Covid-19

7 Forex Trading Tips for African Traders Post Covid-19

Overview

The Forex Market is the largest financial market when considering its turnover, liquidity, and its value. This has not changed, but increased, since the emergence and spread of Covid-19 on a global scale.

The Forex market has seen more interest especially from traders from African countries, such as Kenya. An important factor to consider is the condition of markets after the Covid-19 storm has passed, and African traders need to adequately prepare for this.

Here is our list presented by Hotforex:

1.  Make use of stops

There may be substantial moves in the market should Covid-19 lose its pandemic status and African traders are advised to make use of stop-loss orders to prevent excessive losses and margin calls when this happens.

Simultaneously, African traders will need to adjust their take profit targets or at lease make use of trailing stops to prevent their winning positions going in the opposite direction quickly.

2.  Use Leverage wisely

Leverage is a helpful tool to maximise returns, but seasoned traders will know that it must be used carefully as the risks involved may lead to substantial losses.

African traders need to heed caution to adjust leverage to account for wider movements of market prices.

3.  Monitor positions carefully

There are often hourly reports regarding Covid-19 and this may not change for months to come, even post-Covid-19 as there may be residual fear remaining about its return.

African traders need to ensure that they monitor their positions carefully where the weekend gap in trading is concerned and to consider whether they need to liquidate positions before the close of trade every day.

4.  Manage equity risk

This goes together with using leverage wisely and African traders need to know when it is wise to consider paring back and to rather trade smaller risks say Louis Schoeman from Forexsuggest.com

5.  Be flexible with orders

Making use of limit orders when there is uncertainty surrounding the volatility is an important way to protect African traders from a quick shift of volatility in the market. It also allows traders to execute multiple trades simultaneously in different markets.

6.  Make use of hedging

Using hedging post-Covid-19 while market conditions may or may not fluctuate is great way for African traders to protect themselves as they trade the opposite direction of their initial trade without having to close it.

7.  Learn both high and low volatility strategies

It is imperative for African traders to familiarize themselves with both high and low volatility strategies to compensate for both market conditions efficiently and adequately.

It is impossible to predict what the Forex market will be like in a few months from now, so it is a good idea for African traders to familiarize themselves with both.

Final Thoughts

While Covid-19 is still classified as a pandemic, it is not possible to predict what the Forex market conditions will be like in a few months from now when Covid-19 is no longer considered a pandemic.

It is imperative for African traders to do the necessary preparation to avoid unnecessary losses by familiarizing themselves with different market conditions and by employing various risk management tools.

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