With the ability to make money no matter if markets are moving up or down, trading seems very attractive. Especially when considering the current global events, economic crisis, and possible recession in 2023. In this article, we will discuss what currency pairs are and if it’s a good idea to start trading them.

Forex explained

Foreign exchange or widely known as Forex is an international currency market that dwarfs every other financial market out there. Trillions of dollars are traded daily between international banks, hedge funds, corporations, and other participants. Liquidity, meaning the ability to sell an asset in the shortest amount of time, is Forex’s main selling point. The main trading instrument on Forex is currency pairs. Where each currency is paired against other currencies and their prices are visible to all participants.

But what does EUR USD mean?

EURUSD is a major pair on the Forex market. EURUSD shows how much USD it takes to buy one Euro. Depending on macroeconomic conditions, the price changes every fraction of the second. Euro in EURUSD is a base currency, while the USD is the quoted currency. Every pair consists of a base and quote currency and shows how many units of the quote currency are required to buy 1 unit of the base currency. Knowing this enables traders to understand what it means that EURUSD is 1.21. It is 1.21USD needed to buy 1 Euro. There are major and minor pairs in Forex. Major pairs are four EUR/USD, USD/JPY, GBP/USD, and USD/CHF.

While major pairs account for most of the trading volume on Forex, minor pairs should not be underrated. Minor pairs are also known as cross pairs and are pairs that don’t include USD but include one or two of other major currencies JPY, EUR, and GBP. We will not describe minors in any more detail here, to enrich your knowledge base read this guide to minor currency pairs for more info about them. While majors and minors consist of developed countries’ currencies, there is a third type of currency pair, sometimes called exotics. Exotic currency pairs include developed countries currency as base or quote. Exotics could be great when something important happens in their respective countries, but spreads are higher and should be traded very carefully.

Why trade currencies?

Currencies are liquid and open for 24/5 providing ability to trade without interruptions for 24 hours. This is great as it offers the ability to trade from anywhere in the world and still have a good night’s sleep. They provide enough liquidity to quickly open and close any trade, and volatility is also moderate. Volatility is very important to traders, as they can make money when there is enough volatility to move markets in any direction. Today’s robots and algorithmic trading have almost removed short-term volatility, so pro traders tend to focus more on day trading, meaning they often open trades for days and even weeks to catch good moves.

Advantages and disadvantages of Forex trading

Trading can be a very exciting experience when done wisely and with proper education and practice. But there are still some cons attributed to trading, with the main one being how difficult it is to start making profits in live markets. The knowledge base of a Forex trader consists of a good understanding of macroeconomic factors that affect currency prices and the ability to conduct a comprehensive technical analysis of the price chart of the specified currency pair, finding the optimal entry and exit levels.

Pros of Forex trading

• Ability to make money from anywhere in the world.

It doesn’t require a trader anything else than a medium-budget pc and an internet connection. Any medium-budget laptop can run trading platforms like MetaTrader or Tradingview. These popular platforms are available even on smartphones, making it easier to trade on the go.

• You control your working hours.

You can have total control over your time and how you spend it.

• Making much bigger profits than average salaries in underdeveloped countries. This one is probably one of the coolest benefits of trading. You can make more than what an average person makes, and you can do it with much less time per day and per week.
• No outside oversight and the director No one controls how you behave and spend or manage your time when you are a pro trader

Cons of Forex trading

• The long and difficult learning curve. It requires good knowledge of several financial fields and nuances to become profitable
• Discipline is key. It is hard to be disciplined for many people if they don’t have a boss. This is actually the number one challenge when addressing the trading profession for beginners.
• Psychology and emotional intelligence. It is hard to open another trade and be balanced if you end up losing the latest trades. Sometimes it happens that a losing streak throws even the most powerful minds off balance. Losing real money is hard, especially when trading is your main job.

Make sure you understand yourself and be disciplined to be a successful trader.

In the financial world, there are two types of investors: passive, and active. Passive investors are trying to find assets that have potential to grow in price later. On the downside, when markets are falling, passive investors suffer.

Active investors, also known as market speculators, love market crashes and price hikes. When the world’s economies suffer, speculators make money. The same has happened during the 2007-2008 financial crises and the same is happening today.

The years prior to 2023 have been difficult for the world’s economies. The pandemic has slowed down production of goods and services. The quality of medical care, education and other services has declined. Governments took out loans from banks and printed lots of money. As a result, prices on stocks, crypto and other assets have skyrocketed.

2022 Russian invasion of Ukraine has also negatively impacted the state of the global economy. Prices on food, energy and other goods and services have increased dramatically. The dramatic increase in the consumer price index has forced central banks to increase interest rates. When inflation rises, central banks increase interest rates to limit printing money. As a result, regular people take fewer loans from banks, there’s less money in circulation and therefore, the money gains higher value. However, this hurts the economy, as less money spent means less income for the companies. Businesses are true wealth creators. Money is not wealth, goods and services are real wealth.

At the end of 2022, high inflation, high interest rates globally, and political and economic difficulties have negatively impacted the financial markets. The stock market, Euro, Great British Pound, Swiss Franc and other major currencies, as well as the crypto market have experienced increased volatility and price declines. However, while others see risks and difficulties, traders see great trading opportunities.

2023 will be a great year for both active and passive investors. Active investors love high volatility and increased trading opportunities. And Passive investors are looking for assets that cost less than their real value. In 2023, lots of assets will be devalued to the point where they become attractive for long term investors.

Increased volatility and more trading opportunities

Traders make money when there’s good liquidity and markets are moving. 2023 will be a highly volatile year, as a result, there will be plenty of trading opportunities for the speculators. High inflation and increased interest rates are likely to remain present throughout the year. And there’s also a chance of global recession. Recession is a decrease in economic activity. And usually, high inflation is followed by recession. Recession can cause further declines in stock prices.

How to start trading?

Open a demo account

It’s worth noting that in case you have no experience in trading, it’s best to open a demo account and  try trading out on a demo account first. The accounts are very similar to live trading conditions. The only difference is that real money is not under risk. Demo accounts help novice traders learn how to use trading platforms, get familiar with broker policies, learn how to use indicators and develop trading strategies. The accounts are not only for beginners, but professional traders often demo trade to improve their trading strategies or build new ones from the ground up.

Learn about the markets you wish to speculate or invest in

Each market has its features. Forex market is more cyclical as one currency is always valued in relation to other currencies. And currencies are backed by economies, central banks and governments. On the other hand, company stock prices can grow dramatically or fall to zero. In addition, each trading instrument is different. There are major, minor and exotic currency pairs. Currencies differ in level of liquidity, spreads, volume and volatility, etc. And therefore, it’s critical to learn about things that have an impact on your trading instruments’ valuation to make predictions on future prices.

Develop a trading strategy that fits your personality

There are a million ways to make money in the markets. However, all of them are difficult to find as there’s an increased competition. Some traders day trade to avoid swaps, some swing trade to limit market noise, and others invest long or medium term. There are scalpers, high frequency traders, position traders, algorithmic traders, etc. In case you are a quick thinker and have fast hands, perhaps day trading, high frequency trading or news trading is for you. If you prefer more planning and research, position and swing trading might be a better choice. It’s very hard to tell unless you start trading yourself. And as already mentioned, demo trading can greatly help you find the answers. In addition, be noted that not only can you demo trade, you can also use backtesting algorithms or programmes for trading strategy development.

Develop accountability

The last part is to be accountable for your trades. Trading journals and trading communities can greatly help in this regard. Trading journal can have multiple uses. It can help you review your progress, find your strengths and weaknesses, and also make you more accountable. When a trader knows that he or she will be saving progress in the journal at the end of the season, it’s more likely that the decisions will be more calculated.

Let’s sum up

To sum everything up, 2023 will be a great year for both active and passive investors. Passive investors buy when markets are down and sell when they are sky-high. As for the short term speculators, they love increased volatility and can benefit from both bull and bear markets by speculating on CFD prices. 2023 will be a highly volatile and challenging year for the global economies. As a result, traders will find lots of opportunities to make money. In case you don’t have experience, it’s best to start with opening a demo account. A demo account will help you get familiar with the platform, instruments and broker policies without the risk of losing money. For profitable trading, it’s critical to:

• Learn about the markets you wish to speculate or invest in
• Develop a trading strategy that fits your personality
• Develop accountability

Ahead of the 2023 general elections, Nigerian electorates across the states of the federation who have yet to collect their PVCs have been advised to do so at their point of registration before the deadline which has been fixed at January 29.

The Ogun State Government has declared Tuesday, January 24, and Wednesday, 25, as work-free days for workers in the state public service and residents of the state to collect their PVCs to be able to exercise their franchise in the forthcoming general election on February 25.

The two-day public holiday was made known in a statement issued on Sunday in Abeokuta by Kunle Somorin, the Chief Press Secretary to the state Governor, Dapo Abiodun.

The statement reads in part: “Following the extension of the permanent voter cards collection till Sunday, January 29, 2023, by the Independent National Electoral Commission, Governor Abiodun has graciously approved two days – January 24 and 25, 2023, as work-free days to enable public servants to collect their PVCs from their respective local governments.”

“The governor enjoined all executive members of public markets and private establishments in the state to allow flexibility in their schedules for residents to use the opportunity to visit INEC offices or collection centres where they registered to collect their PVCs” Mr Somorin also stated in the statement.

The governor Dapo Abiodun was reported to have said voting is a civic responsibility, hence all eligible citizens must be allowed to exercise their rights to choose who governs them.