subject: Trading The Volatile Euro And Sterling Forex Markets [print this page] On the currency front the Euro is weakening again versus the Dollar and Pound as the story from the Southern European States appears as though it is going to run and run.
It looks like Greece is already backing away from its commitments to cut deficits. This will not sit well with the Germans who need to get the bailout through their legislature.
In reality we all suspect that a solution involving vast sums of money will eventually be agreed. If not, then we are essentially contemplating the demise of the Euro project. And the politicians will not allow any such demise, no matter how much it costs. In the long run this can only harm the Euro.
The run up to the UK election is likely to be played out in the Gilt and Currency markets, not Equities, with each new opinion-poll being taken as gospel even as the next one hoves into view.
The Liberal Democrats are riding high, in fact the more popular they get the more Sterling has faltered. As Simon Denham of paddypowertrader commented, There is a sense that this will be the high point for the Liberals and so the temptation is to buy into Sterling in anticipation of a fading in their appeal in later polls.
While I would not disagree with this assessment there is a danger that the massive press injection focussing on the Lib-Dems will not harm them in the least. It has always been a problem for the Liberals that they have lacked the column inches and broadcast minutes. For a while now they have probably been getting more comment than the Conservative or Labour party.
There is no getting away from the fact that the two major parties are held in very low regard by the UK electorate. There is a reasonable chance that Mr Clegg and his Lib-Dems may be able to build on his current surge and the election is not far away. There is not much time for a faux pas to ruin his chances.
However with the Euro and Sterling in various states of flux it could be an interesting time to speculate on the forex markets. A simple benefit of spread betting is the wide range of trading markets on offer including indices, forex, shares and commodities.
And given that the news surrounding both Greek Debt and the UK Election can filter out at any moment it is very handy that certain markets can be traded 24 hours a day. That is a benefit that spread betting enjoys and that more traditional stock trading cannot replicate. You can trade GBP/USD, EUR/GBP, EUR/USD, GBP/JPY etc all the way from Sunday night to Friday night.
Note though that the warnings do say With spread bets you can lose more than you initially invested. Familiarise yourself with the risks that are involved. Spread betting carries a high level of risk to your capital. Before trading, please ensure that financial spread betting matches your investment objectives. If necessary, seek independent advice, and so therefore you need to contemplate your risk management.
Yes, it is true, investing does have its downside. However, there are steps you can take to minimise your downside. You could use a Guaranteed Stop Loss Order to help reduce your risk. If you were to start to lose on a trade and the market continued to move in the wrong direction but hit your Stop Loss then, even if the market were to 'Gap', your trade would be closed and you wouldn't lose any further funds.
I can remember a number of occasions when a Stop Loss has restricted my losses when the markets have taken a quick turn for the worse.
