News reports on the developments in the European Union and Brexit in the United Kingdom are bringing ‘winds of change’ and with the uncertainties of the future, increased market volatility.
Now currency traders are bracing themselves for a roller-coaster ride. With the pro-Brexit leader elected Prime Minister of the UK, we could see the pound tumbling because of an increased risk of a hard Brexit.
UK: 99% counted.
— Europe Elects (@EuropeElects) May 27, 2019
Plus500, the leading UK forex/CFDs broker, recognizes the great potential trading opportunities for their traders – for the pound and euro currency pairs, the UK 100 and financial markets.
A survey of central bank money managers show that in the weeks ahead, there will be higher volatility and fluctuations in pound currency pairs which will present traders with a range of unique trading opportunities that can be taken advantage of.
That’s not all…
Currency pairs like the EUR/GBP, GBP/USD, GBP/JPY and stock markets in Europe, the Germany 30, Europe 50 and the UK 100 and UK Brexit High 50 Index, are the most vulnerable to price fluctuations.
Headline and economic news
Day traders who hope to capitalize on the movements in stocks, commodities, forex and other financial instruments on the short-term will need to follow the financial news headlines and economic news closely.
A shift in the pound can be caused by an announcement prompting the rise or fall of the pound and can cause share prices on a company to also shift.
How can you actually use this?
You can get real-time updates and reports on all economic events that may affect the UK markets with Plus500’s Economic Calendar.
The updates will alert you to any Brexit risers and fallers and is a great tool for your trading strategies.
To make sure you receive Brexit trading alerts and notifications:
- Sign up with Plus500
- Go to menu
- Notifications setting
You will discover that the trading alerts are easy-to-use and can be seen at a glance.
Once you have set your preferences (in notifications setting), the page is displayed with headings Yesterday, Today, Tomorrow and This Week.
This gives you the data, related instruments, country, time and event and actual previous.
Now, you can keep track on any changes in the market and receive the alerts on all desktop and mobile devices, completely free of charge.
That’s not all…
With any Brexit news impacting financial markets, traders will get an email or SMS on the latest developments.
It could be an alert on a second referendum, or a parliamentary vote in the Houses of Parliament.
Any of these scenarios is likely to see an increase in the volatility of the pound.
Day traders have a variety of options with some who enter short term trades before or after receiving a news Brexit update.
If it is a negative news report, the pound will drop which could be because of political upheaval or the announcement of an interim election.
Risk Management Tools
Trading in a volatile environment has many risks. That is why it is recommended to use risk management tools to protect you on Brexit related price shifts.
At Plus500, you will discover that they offer risk management tools that help you to keep your trading losses low and potential gains high so that you can trade with confidence, protecting your profits.
They are essential to your CFD trading success and are free of charge.
You can use the ‘close at profit’ tool – which will protect your profit
‘Close at loss’ or ‘trailing stop’ – minimizes any potential losses
‘Guaranteed Stop’ – ensures that your position closes at the rate you set
When you use the Close at Profit and Close at Loss or trailing stop orders, it does not guarantee that your position will close at the exact price level.
It indicates when you need to take action to reduce it.
With the Close at Loss order, your position stays open as long as the price moves in your favour and will close automatically if the price changes direction.
This automated tool reacts quicker than a human trader could and is an important risk management tool.
Catching a trend using the close at loss to maximize your trade.
As an example, you risk 1% with the goal of making 2% on the purchase of GBP/EUR.
When the price moves 1%, you move your stop loss up and continue to move your stop loss as the market continues to climb. When the market reverses and reaches your trailing stop loss it automatically closes.
The best part?
You can practise using your risk management tools with Plus500’s free and unlimited demo account which comes with virtual money.