After a 2016 of electoral upsets and unexpected market developments, it’s clear that there are lessons to be learned to prepare for future major volatility events. So for all the factors we aren’t able to anticipate, what can we take from the last twelve months?
The markets to watch
Clearly no major event has the same repercussions, but it seems wherever there’s volatility, there are always a few markets first in line for traders.
Take those who traded on China, Brexit and Trump, for example. In every case, the top three currency pairs they rushed towards were USD/JPY, AUD/USD and EUR/USD, and the top two indices were the Dow and the DAX. In light of the globally significant nature of these markets, it may come as no surprise that these are where major trading opportunities lie. But they may also offer hints as to how the long-term fallout of the event could turn out.
Untapped potential in unfamiliar markets
Singapore’s traders are particularly receptive to volatility that can be measured by currency movements, and as a result they’re firmly wedded to forex trading.
Meanwhile, major indices, stocks and commodities affected by the Chinese slowdown, Trump’s election and the Brexit vote went largely overlooked. Understandably so, in light of a relative lack of familiarity with the smaller-scale, more domestic impact of each of these events. But the scope of potentially volatile markets available elsewhere suggests there are opportunities left untapped. It may well be worth getting to grips with new markets moving forward.
Trading goes mobile
Given that high-volatility events unfold over the course of a number of hours or days, it makes sense that traders wouldn’t be tied to their desktops.
In all three events, around 60% of all trades were carried out on iPhone or Android, no doubt owing to the flexibility of trading on the move. The growing popularity of mobile trading is a worldwide trend, but Singaporean traders stand out from their peers elsewhere in just how much the older age groups have taken to mobile trading. Over Trump’s election win, for example, 58% of Singaporean traders in their 50s traded via a mobile device – compared to just 41% in Australia and the UK.
The extent to which mobile trading can increase its dominance remains to be seen, but at least for now, it appears that traders in Singapore are well ahead of the curve.