Russia’s aggressive military action towards Ukraine is shaking financial markets around the world. Small and big Investors, who are just recovering from the loss they incurred during the pandemic, are again faced with lots of uncertainty. It is becoming very difficult to predict the market direction due to the Russia-Ukraine war.
Here are five tips to overcome the market crisis to maintain stability in your international investment portfolio.
1) Lower leverage: As volatility is far above normal, it would be better to use lower leverage than normal when trading. If the market mood suddenly shifts, it could wipe out a stop-loss point within seconds only to eventually go in the right direction.
2) Broadening the range: Another tip is to make trades with wider ranges – maintaining the same risk-reward ratio while widening stop-loss and take-profit points. Given the current increase in volatility, these trades will likely be realized faster than in normal times.
3) Oscillator adjustment: Thinking big also applies to determining oversold and overbought conditions. If one uses the Relative Strength Index on the 4h-chart, applying 14 candles and using the 30 and 70 bands to find out when an asset is overstretched, it is time to consider widening them to 20 and 80, and perhaps even zooming out to a higher timeframe. Extreme conditions can last longer than usual in a war.
4) Make the trend: While moves are mad, it always makes sense to zoom out to broader charts and see the big picture. While forex trading is never a one-way street, going with the trend makes more sense than going against it.
5) Watching for a reversal: It is essential to note that the current trends can reverse if a broad ceasefire is agreed upon or if the war ends in another way, such as the retreat of Russian forces or the collapse of the Ukrainian government.
Rani Jarkas, the founder of Cedrus Investments and a highly experienced and accomplished financial services executive, has a wide network of offices in Hong Kong, Shanghai, Beijing, Shenzhen, Jakarta and New York. Rani Tarek Jarkas Firm renders quality, customized, complete suite of strategic advisory and investment banking services to innovative and emerging technology companies worldwide.
