Fred Razak, Chief Trading Strategist at CMTrading, recently arrived on South African shores for a free trading seminar to educate ordinary South Africans about potential online trading opportunities for additional income.
Razak shares some thoughts on the modern trading environment that were discussed at the seminar.
We live in a very unstable economic environment. The conflict between Russia and Ukraine affects the global economy. Unemployment is high and fuel prices have skyrocketed. In addition, the US economy has contracted and is affecting global markets, and the rand-dollar exchange rate fluctuates rapidly. Just because the data doesn’t necessarily reflect a recession doesn’t mean we’re not in the middle of it anymore.
So many factors are adding fuel to the structure of the post-COVID economy. And millions of people are stressed. But I worked on Wall Street during the 2008 global financial crisis and continued to trade the markets through various ups and downs, and one thing I can say with absolute certainty is that during any crisis, there are always huge opportunities for those who can see beyond the dark. times.
Sometimes it’s hard to see the forest for the trees. But this is never a simple black and white case of good or bad. When it comes to economics, there is a much broader spectrum. Yes, some companies are not recovering from a recession. But there are also opportunities for new companies to enter the market. There will be chances to capitalize on businesses that “come on sale” during the economic downturn. And ultimately, no matter what, markets always recover, even if it doesn’t happen right away.
There are positive notes in a crisis if we know where to look for them. Having survived the dot-com crisis in 2000 and the 2009 credit crunch and then COVID, we can see history repeating itself. Markets will always rise and fall and then rise again. This is a self-perpetuating cycle.
The current situation should not discourage anyone who wants to get into online trading. This is an opportunity to capitalize and look at the next upswing. It is always important to remember that money never disappears, even in difficult times. Money just moves.
Similarly, if you are financially “relocating”, you can take advantage of the market. For example, gold is generally considered a safe investment. Thus, investors will invest their money in gold in a recession. Then gold will rise in price over time.
And while other things could fall — FAANG (Facebook, Amazon, Apple, Netflix, and Google) stocks, for example — gold will have more options. The pendulum will always swing in one direction or another.
If we examine the current state of trading in bitcoin and cryptocurrencies in general, the value of which has fallen significantly in recent times, it is important to pay attention to the demographics of those who invest in cryptocurrencies.
People in their 40s and 50s usually hold portfolios of blue chip stocks because they are less volatile and growth oriented. This demographic is mostly concerned about their pension and doesn’t want to take risks.
Conversely, if you consider the 20 to 30 age demographic, they are much more aggressive in investing in cryptocurrencies. And for the next twenty to thirty years, this demographic will dominate the investment market. If they are already committed to cryptocurrencies, it may just be a matter of time before the world really adapts to cryptocurrencies and uses them for everyday transactions.
We will probably eventually see one cryptocurrency win the race for global consciousness. But at present, the crypto boom and bust movement that we have seen is completely natural and organic for something so new. The world is not yet sure what to do with cryptocurrencies. But it will evolve and the pendulum will swing again.
There is never a good or bad time to trade the markets. Just as I believe in responsible driving, I also believe in responsible trading. If you are trained and careful enough to trade defensively when the environment calls for it, you can make a profit.
I would never advise anyone to risk their hard earned money unless they enter the trading arena with a working knowledge of how the markets work. The best way to gain this knowledge is to partner with a regulated, reputable trading brokerage company that offers training, mentoring, and user-friendly platforms to help you trade more confidently.
Anyone can trade, even if you are starting small. You don’t need to be on Wall Street in the digital age. E-commerce has become accessible to the common man, and any information we need is freely available. It is possible to increase the value of your life and get additional income through trading. Many normal people around the world do this. And even in times of crisis, you can succeed if you trade responsibly.
- Fred Razak, Chief Trading Strategist at CMTrading