The rapid spread of the novel coronavirus has caused panic across the world as the virus in just over three short months has gone from new discovery to a terrifying global pandemic. It’s caused a shut down of the economy that could bring about a massive recession, and as the world begins to prepare, investors are panic selling their stocks, cryptocurrencies, commodities, precious metals, and any other asset they have into cash in case a worst-case scenario arrives.
And while the current market environment is hellish for investors – especially long-term investors who have now had to witness their holdings evaporate in a matter of weeks since the virus began to reach a critical point – traders who thrive during peak volatility are having a field day profiting from the quick, successive ups and downs of valuations as markets try to price in a pandemic and recession.
Given the situation and state of panic, it may seem like it would be impossible to make money in today’s market. But for those looking to day trade while they’re suddenly working from home, or are simply interested in earning more ahead of a crisis, with the right tools, trading plan, and capital, anyone can turn a significant amount of profit in the current market conditions.
Examples of Current Market Volatility and Profit Potential
Before the outbreak truly began to rampage across Europe and the United States, Bitcoin had been trading at over $10,000. In less than one month’s time, the cryptocurrency fell to as low as $4,000.
Those that held spot Bitcoin at the time, would have lost $6,000 in less than four weeks during the 60% drop. However, those that opened up a short position at $10,000 and closed it at $4,000 using 100x leverage, would have made $600,000. Seriously.
Because so many traders had expected the asset to rise in value ahead of its halving, taking a contrarian position was especially profitable.
And it’s not just Bitcoin and cryptocurrencies that are this volatile. The Dow Jones Industrial Average saw its worst one-week drop since 1987 this past March.
Nearly all major stock indexes have shown a similar collapse. Other markets were hit hard also. Precious metals were devastated, even gold which typically performs positively in a crisis environment.
Oil prices fell to the lowest prices in 18 years, and the forex market is on fire as some economies are being hit harder than others when dealing with COVID-19 related fallout.
Every market has been impacted in some way, and the volatility has presented a ripe opportunity for traders to profit from the violent and rapid peaks and troughs. There’s never been a better time to trade a variety of markets, build a portfolio with many assets to spread opportunity and risk, and ensure that no profits are left on the table.
Tips To Take Advantage of Volatility and Keep Risk at Minimum
Some trading platforms, such as those like PrimeXBT, offer tools that are specially designed for traders to profit from market volatility rather than be stuck simply holding assets and praying they appreciate in value.
Especially during the current market selloff, long-term holders are dumping assets, causing prices to plummet.
But falling prices doesn’t have to mean losses for traders. Traders can profit from declining prices by opening a short position. As prices begin to rebound, traders can open a long position in anticipation of prices rising. If traders are unsure when markets heat up, building hedge positions can be helpful.
When trading ranges tighten before a larger move, traders bolster profits by using tools such as leverage. Leverage also is a great tool during such market volatility. Not only can it multiply profits, but it allows traders to use less capital to trade with, but still open large, profit-generating trade sizes.
Adding stop losses can further protect from putting too much capital at stake, and take profit orders can maximize profits by ensuring targets are hit – even if you are away from your trading desk during the action.
For those with serious skills, OCO order lets traders carefully time an order type that closes after reaching a certain price and then opening a new order in the opposite direction – the perfect tool for trading ranges with precision.
Charting tools for technical analysis can help make sense of the market and filter out noise from the price action.
Paying close attention to technical analysis indicators to watch for trend changes, breakouts of important moving averages, overbought or oversold conditions, and more to time position entries and exits, will allow traders to truly get the most out of their trading strategies.
With every market more volatile than they’ve been in over a decade, traders are salivating over the potential profits located behind every turn.
But as traders know, markets can be tricky, especially in conditions like this. There’s no more important time to select a platform with professional tools to take full advantage of any direction the market trends, protect from risk, and get the most out of their capital. Additionally, finding a platform that offers exposure to as many markets as possible is ideal, given the circumstances and profit opportunities in abundance.
PrimeXBT is a Bitcoin-based margin trading platform offering a wide variety of tools to maximize profits and minimize any risk associated with the powerful market volatility and offers exposure to forex, commodities, stock indices, cryptocurrencies and more.
Platforms like it represent the best way for traders to squeeze the most from market movements in either direction with short and long positions, protect capital and amplify profits with leverage, and using advanced trading turn the current crisis into unimaginable wealth.