A 2020 roundup
As we come into the final chapter of 2020, it is safe to say this has been a challenging year with the many new and unfamiliar situations that the world has had to quickly adapt to. Almost overnight, the world had to adjust to a new way of living and working which has seen nearly every industry affected. This included the financial markets and with such heavy socio-political influences, traders and brokers were truly tested with unprecedented conditions.
In this piece, we take a look back at some of the most significant events in the market throughout this year and the ways in which FXCM has approached the market challenges 2020 threw at us all.
Record volatility
Throughout 2020, expert analysts, bankers, and retail investors were all faced with a flurry of mixed signals coming from the markets with intense volatility. Towards the end of Q1, monthly ADV data reports from FX venues experienced a huge spike to their volumes with drastic peaks and drops in pricing. As a result of this, many venues reported record levels.
As such a big year for volatility, we aimed to continue to maximise trading opportunities for our clients wanting to make the most of this market turbulence. In September, we launched our Volatility Index CFDs, enabling our customers to speculate on the extreme movements that have dominated the markets this year. Learn more about this launch and our other reflections on 2020 volatility here: https://citypm.eu/2020-the-year-to-start-trading-volatility/
The surge in retail traders
With the intense volatility seen back in the first half of 2020 due to the initial wave of COVID-19, many traders and brokers were attracted to the high trading opportunities. This opportunity to make big on the fluctuating market movements, combined with increased time at home meant 2020 saw a surge in the number of retail day traders flocking to the markets.
With so many trading apps available and with increasing zero commission opportunities, today we see a market ripe with choice and opportunity for efficient trading.
However, with so much choice and opportunity, it’s vital to be informed and aware of exactly what you’re signing up for – for new traders just as much as experienced ones. This is where the importance of a reputable broker with educational resources and on hand support becomes clear. Click here to revisit our article where we discuss the important considerations when selecting a broker: https://citypm.eu/the-rise-of-the-retail-trader-a-short-history-of-how-trading-became-accessible/
Oil dries up
The global lockdowns throughout 2020 saw cars parked, planes grounded, the lowest U.S. petroleum consumption in decades and the storage tanks in Cushing reach capacity.
However, as the dramatic price fluctuations plunged Oil Futures into the negatives during the first wave of the COVID-19 crisis, that very idea of Oil Futures as one of the most reliable tradeable assets was disproven. As this introduced uncertainty into the oil market, we saw a surge of new traders looking to speculate on the recovery of oil. It is precisely this uncertainty that FXCM is addressing through Spot Oil CFDs. We are providing retail clients with the opportunities to speculate on current volatility in a way that is both flexible and provides a means to mitigate risk for a highly in-demand asset. Discover more here: https://citypm.eu/spotting-the-right-opportunity-at-the-right-time/
Overall, 2020 has proven to be one of the most sizeable periods of change and disruption in recent history. It has been a year to remember for the trading markets and we are proud of our team and clients for their resilience and adaptability throughout. We look forward to 2021 where we look to continue this and more.
Past performance is not indicative of future results.
Market Opinions: Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. FXCM will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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FXCM is a leading provider of online foreign exchange (FX) trading, CFD trading, and related services. Founded in 1999, the company’s mission is to provide global traders with access to the world’s largest and most liquid market by offering innovative trading tools, hiring excellent trading educators, meeting strict financial standards and striving for the best online trading experience in the market. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. In addition, FXCM offers educational courses on FX trading and provides trading tools, proprietary data and premium resources. FXCM Pro provides retail brokers, small hedge funds and emerging market banks access to wholesale execution and liquidity, while providing high and medium frequency funds access to prime brokerage services via FXCM Prime. FXCM is a Leucadia Company.
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