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How Has Brexit Affected Forex Trading?



The uncertainty created by Brexit hasn’t spared the forex trading market or forex traders based in or trading through platforms based in Great Britain. 

With Brexit complete and its impact on forex evolving over time, many traders have questions about the implications of this political and economic move not only on the rules and regulations of forex trading but also the trading opportunities created by this shift.

Look no further for answers to your most pressing questions. Here’s an overview of the impact Brexit has had—and will continue to have—on forex trading.

Increased forex volatility turned Brexit into a trading opportunity.

The volatility Brexit caused in financial markets gave Valutrades clients lots of trading opportunities, increasing trading activity and improving Valutrades commission income.

While the time line for this continued volatility is subject to change, traders eager to capitalize on Brexit’s economic influence should move quickly to build a trading strategy around this political and economic event. 

For the best results, traders should pay close attention to political and economic news coming out of Great Britain and the European Union—especially on topics where differing tactics and results may produce different outcomes for these economies. 

Additionally, use an economic calendar to track economic reports and updates coming from both Great Britain and the European Union, and look for trends that might indicate price movement in one direction or the other.

Post-COVID GBP recovery may outpace EUR.

As stimulus funds, vaccination rates, and overall post-pandemic recovery proceed at a faster pace in Great Britain than in the European Union, a recovering British economy is expected to yield a stronger British pound, at least in the near term.

Consequently, some traders may see value in moving money out of EUR positions and into GBP to capitalize on this speedier recovery, spurring demand for GBP in the coming months. As Europe’s pandemic recovery catches up, though, this balance may shift—and EUR positions may become more attractive. 

While it can be trendy and profitable to trade on the expectation that GBP is outperforming EUR, for example, don’t get caught sleeping by a trend reversal that may develop in the future.

The “Trading Brexit” strategy is expected to last into the future.

Due to the ongoing volatility created by both the pandemic recovery and Brexit in general, many forex experts believe that the so-called “Trading Brexit” trend will continue at least through 2021. 

Forex traders may be on the lookout for both long and short positions that capitalize on GBP volatility to maximize returns. All economic signs point to this strategy having enough legs that you can generate real profit from augmenting your trade strategy to account for these new economic conditions on both sides of the GBP/EUR divide.

Financial services rules remain intact.

Contrary to some traders’ concerns, Brexit has not changed any financial services rules. The Financial Conduct Authority regulation remains one of the strictest and safest in the world.

This means you can confidently proceed with forex trading as usual. Consistent regulations will continue to protect both the forex market as a whole and individual forex trading platforms and traders throughout and after this period of transition.

Valutrades customers can continue with their regular forex trading activity.

Brexit has not made any changes in who Valutrades can deal with, and all customers are still able to open accounts. Although some clients may have experienced issues with sending funds to UK-regulated companies, Valutrades has ensured that we work with various payment providers and regularly test funding methods to ensure clients are not affected.

It’s important to emphasize that Brexit did not cause Valutrades any financial issues, and Valutrades does not anticipate any future impact from Brexit rules changes in the future. Our customers can trade with confidence knowing that Brexit is purely a trading opportunity rather than a threat to your existing trading process.

Don’t miss out on valuable trading opportunities created by Brexit—open a live Valutrades trading account today.

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The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.