With more elections set to take place, talks to get underway and new legislation to be implemented in the year ahead, there is bound to be more volatility on the cards. So for all the unexpected events and complex market reactions, what lessons 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 indices they rushed towards were the Dow, the FTSE 100 and the DAX, and the top three currency pairs were GBP/USD, USD/JPY and EUR/USD. 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.
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.
Around half of all trades placed during the three events were carried out on iPhone or Android, no doubt owing to the flexibility of trading on the move. Of these, there is a significant discrepancy between older traders and younger, who are far more comfortable with this new way to tap into the markets. This suggests not only that the mobile trading sphere is more important than ever, but that how clients trade looks set to continue to evolve over the next few years.
Untapped potential in unfamiliar markets
Despite the significant market shift brought about by the Chinese slowdown, IG clients were more reluctant to get involved than they were with the US election or Brexit.
For those who took advantage, the dollar and Dow were the orders of the day, offering a way to gain exposure to the Chinese fallout indirectly. This is likely due to a lack of familiarity with the yuan or China 300. But with the Asian powerhouse’s ever-growing bearing on the world stage, it may well be worth getting to grips with new markets like these moving forward, as opportunities for shrewd traders start to arise further afield.