Surprising lessons traders learnt in 2021

Surprising lessons traders learnt in 2021
Surprising lessons traders learnt in 2021

The years of 2021 have been a year that many people would like to overlook. With many celebrity deaths, concussion political decisions and a deep division of opinion amongst voters, it had its own Twitter hashtag. For traders, 2021 presented both opportunities and pitfalls and was fraught with enormous wins and devastating losses stories. In this article, we will recap the ten unexpected lessons traders learned in the year 2021. Are you ready?

1- The most unfortunate start to a year ever

The year 2021 began as it was meant to go on, and the opening weeks of 2021 were the most critical start to any year ever for US stocks. Trading floors started the new year in a state of chaos as weak economic data from China and strengthened tension in the Middle East wreaked havoc on financial markets worldwide. The Dow Jones Industrial Average and S&P 500 Index were each down over 10% in the first 12 days of trading, whilst outside the US, Chinese stocks plunged 16% through the first half of January. Japan’s Nikkei was down 14%, and the pan-European STOXX 600 also declined 12%. I woke the markets from their post-Christmas slumber as fears rose over a slowing Chinese economy. China’s economic augmentation fell to a 25-year low in 2015, raising warning signs about global demand. The lesson for this case is that the traders need to give close attention to the news about global growth woes, geopolitical tensions in the Middle East, and OIL's volatility to tarry ahead.

2- The price of Gas hit a 17 year low

Natural gas prices plunged to 17-year lows early in 2021 amid warmer than typical winter weather, which pessimistic demand for heating oils sources. During the summer, warm weather boosted air conditioning demand and helped to down excessive gas stocks left from last winter. Traders were so adapted to focus on the prospect of higher gas demands in the heart of the heating season between November and March. The persistent warm weather reached the spirit of the heating season, forcing a reappraisal of likely winter gas consumption. With demand looking softer and supply picking up, hedge funds liquidated their long positions and progressed to short positions. The lesson for this case is nothing is inevitable in the financial markets. This is a property and one which is fraught with risks about the environment, political unrest and local demand. Traders need to factor in potential difficulties when designing their risk management strategy and never be too optimistic about any instrument or commodity.

3- Best quarter price of gold in the 30 years

Despite its volatility, gold prices entered a bull market this year. Our popular yellow metal spiked 16% in the first quarter, its most significant move since 1986 and has since maintained those gains. Gold prices reached two-year highs during the summer on haven demand. Source, Meanwhile, advances in silver have been more dramatic, as the grey metal benefited from industrial shortages and haven demand. For information, in the European Union, recalled gold coins and bullion products are free of VAT. The lesson for this case is, whilst nothing is certain, we force view gold as a haven for traders escaping other volatile or uncertain markets. Indeed, it has confirmed resilience in recent years and is taken by investors and financial market traders.

4- West texas intermediate hits 12 year low

The oil-price fall finally found its bottom when West Texas Intermediate futures plunged toward $26 a barrel in February. This was a massive shock for market traders who queried how low it could go? That was the lowest level in 12 years and made headline news in all the major financial publications. A global supply glut of crude exacerbated by a reiterated commitment from OPEC to pump at will led to a bottom for crude prices. They have since increased but remain at a fraction of where they were in mid-2014. concerns, geopolitical tensions and weak demand proceed to weigh on the crude market. The lesson for this case is that the traders' backside capitalizes on the opportunities provided by the oil market. Start by looking at the energy sector, its major players and the specific supply and demand factors that affect oil price. Imbalances in supply and need and political uncertainty might cause oil prices to drop and rise. Serious traders study their chosen market and pay close attention to news and announcements surrounding their commodity or instrument.

5- The Brexit turmoil

What could be more shocking than Brexit? With an unexpected 51.9% of the UK voting to leave the European Union, it divided into passionate Brexiteers and Remainers. While the leave camp argued Britain would save big bucks by being out of the EU, Remainers argued that remaining financial and personal privileges were far more significant. Brexit happened in the biggest-ever selloff in global equities: $3 trillion in 2 days and plunged the pound to 31-year lows against the US dollar. The led the Bank of England to make its most enormous decline to economic growth ever. The BOE eased monetary policy further in August for the first time since the financial crisis. The Queen holds the Brexit as told by her to x-Deputy PM Nick Clegg. The lesson for this case is while the global financial markets were falling, it protected traders with guaranteed stop loss, maintaining them prevent the catastrophic losses suffered.

6- Deutch bank

Two thousand twenty-one strikes, and Deutsche Bank has had an unfortunate year! Its once-mighty share price has hit all-time lows, and it is undergoing a painful restructuring to come up with enough cash to cover litigation expenses. In September, the US Department of Justice levied the bank $14 billion for misspelling mortgage-backed securities during the subprime mortgage crisis. The bank tried to assign a lower settlement but to no avail. Did investors think that Germany, the largest economy in Europe, would let their largest bank fail? It turned out that wasn’t a consideration as Deutsche Bank announced a buy-back of US$5.4 billion of their bonds, which wouldn’t be feasible if it were cash-strapped. Despite this, the drama has triggered renewed buoyancy in the banking sector, with many fearing it may cause another European financial crisis. 

Jaime Dimon say that is There is no reason that Deutsche Bank shouldn’t get over its problems. They have plenty of capital, plenty of liquidity. The lesson for this case is there were many lessons learnt from Deutsche Bank. When everyone is panicking, a good trader does his due diligence before following the crowd. Research showed that the market was oversold and market kings like Greek American Jaime Dimon profited from keeping a calm head. The trend is for the markets to make emotional moves and this is caused by traders expecting the worst and jumping. Clear headed investors wait for these opportunities, analyse them and make smart decisions.

7- Japan changes its monetary policy

John Gorman, Tokyo-based head of non-yen rates trading for Asia and the Pacific at Nomura Holdings Inc, says that The BOJ makes something. Because markets are so intertwined, it’s feeding through to other circuits. The BOJ before multiplied the size of its annual ETF purchases to 6 trillion yuan. Source The changes will help the BOJ manage the impact of its investments and negative interest rates on Japanese banks, a narrowing of short-term and long-term yields has squeezed whose profits. Governor Haruhiko Kuroda and the policy board saved that negative rate required on a share of bank reserves unchanged at minus 0.1 percent. The BOJ is front and center right now. The tutoring for this case is every cloud has a silver lining, and the Japanese yen prevails on fire, surging 15% against the US dollar this year. Traders may want to wait out for the safe-haven yen rising against the dollar, a move that might drum the US markets!

8- British pound flash bang

Onwards into the dangerous territory of 2021, and on October 6, the British pound crashed over 6% against the US dollar in a matter of minutes. The crash occurred in Asian trading, likely correlated to weekend comments by British Prime Minister Theresa May, who vowed to pursue a hard Brexit. The stable currency fell to $1.1819 in early Asian hours, hitting its lowest level since 1985, a year when it hit $1.0520 amid an acrimonious drilling industry strike. The currency later recovered to hover at the $1.24 handle by the afternoon session of Asian trade. While many suspected fat finger error in overnight trading, the ultimate blame was laid at the door of Theresa May and French President Fran├žois Hollande, who had declared that Britain had decided on a Brexit. Well, we must go all the way with Britain’s will to leave the European Union. The pound fell to a 168-year low against the dollar later that month and has not fared well throughout the rest of 2021, leading to the recession word being used by investors. The lesson for this case is movements like the GBP flash crash left many traders unable to close or place new positions because of constraints by their brokers. It’s best to guarantee that your trading accounts are protected from significant losses that could result from these events. One way to go about this might be to consider stopping losses in place for your positions, particularly those you plan on keeping open overnight. Another way to defend yourself might be to trade with a broker that guarantees against negative account balances, which prevent your account from going into debt.

9- The elections in USA 

No review of 2021’s shocking market events would be complete without mentioning the US Elections. Donald Trump shocked the world by becoming the President of the United States with 279 Electoral College votes. As Trump’s administration extended into the night, Dow Jones Industrial Average futures plunged 750 points. They would later recover to finish higher for the day, as US investors awaited further policy guidance from their new President. Financial markets, institutions, and traders were awaiting a comfortable win against Hillary Clinton, but the people of the United States voted. The markets did not price a Trump victory beforehand, so the fluctuation across various instruments was significant, and markets had to correct prices. Asian markets weren’t spared, and Japan’s Nikkei 225 jumped over 900 points or 5.4%, its most significant single-day loss since Brexit. Hong Kong’s Hang Seng Index fell 2.2%. Australia’s S&P/ASX 200 declined 2%. Gold prices skyrocketed as investors ran for a haven, reclaiming $1,300 a troy ounce but, they would later spare gains as the US dollar strengthened against a basket of world currencies. For a fun fact, over 200 women have worked for the President of the United States. But, this list includes appointees of many minor parties and candidates who ran for President before women won the right to vote in 1920. The lesson for this case is many traders hedged their deals with deal cancellation. Deak cancellation allows traders to cancel losing values up to 60 minutes from opening and return their invested margin to their account.

10- Stock market predicted to drop in 2021

We know this one hasn’t arrived yet, but in November, rumors began about a significant stock market crash in 2021. Jim Rogers, who muddled the quantum Fund with George Soros, said that $68 trillion Biblical collapses are poised to wipe out millions of Americans. Prophetic economist Andrew Smithers warned that U.S. stocks are 80% overvalued. James Dale Davidson, who prophesied the collapse of 1999 and 2007, stated three key economic indicators were screaming sell. They don’t imply that a 50% collapse is looming. It’s at our doorstep. For a fun fact, Davidson’s predictions have been so perfect, and he’s been invited to shake hands and counsel former presidents Ronald Reagan and Bill Clinton. He’s been pals with George Bush Sr, Steve Forbes, Margaret Thatcher, Boris Yeltsin, and Donald Trump. The lesson for this case is that with such grim financial prophecies of what lies ahead in 2021, there is no need to fall victim to panic or speculation. There is loss, there is addition, and you can be sure that 2021 will bring fortune to many. Traders may want to grasp a level head as the New Year approaches, check their strategy, and put in place tools like stop loss and deal cancellation, which are offered by many plate-forme.

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nwldg: Surprising lessons traders learnt in 2021
Surprising lessons traders learnt in 2021
The years of 2021 have been a year that many people would like to overlook. With many celebrity deaths, concussion political decisions and a deep divi
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