11 OCTOBER 2021: “Volatility breeds opportunity” says at Daniel Kibel, Chairman and Co-Founder at CMTrading, who shares his perspective on big-picture trading in our current climate.
With pandemic-induced shutdowns, low consumer interest and a market that has been decidedly volatile, it has been a tumultuous time for the South African economy.
Yet even as the country deals with the third wave of COVID-19, there have been bright spots in the local financial arena. The Rand, for example, traded below R14/USD for the better part of 2021. Millions are still being made by experienced traders each day, and according to one trading expert, with discipline and the right training, you too could claim your share of the profits.
CMTrading Chairman and Co-Founder, Daniel Kibel, shares his insight.
Q: What’s behind the recent strengthening of the dollar?
“Traditionally, over the last couple of years, we have seen that when the stock markets are flying high, the dollar weakens. What we're now seeing, however, is that, perhaps due to inflows into the stock markets, the US dollar is strengthening heavily. People are also influenced by the issues around the world and the dollar is seen as a safe haven at the end of the day. With COVID, things are not clear in terms of the markets. We're seeing an inverse of the normal situation with the stock markets strengthening, as they have this year, and the dollar strengthening as well.”
Q: How has the new COVID Delta strain affected markets?
“I don't think it fully has yet but I believe it will. We are in uncharted territory right now. We don't have a clue about the strains and are on the back foot. There are rumours of numerous strains that the current vaccines can't protect against. I don't think the market has priced in the effects of the COVID wave at all right now.”
Q: Why is the dollar considered a safe haven and is this still the case?
“Simply put, the dollar is a safe haven because it is American. Their stock market and economy are the strongest in the world. It's the one that all investors look at. It's the most entrepreneurial society. It's where people want to go. When things aren’t going well around the world, people will want to travel somewhere that is safe. Perhaps they don't want to invest in their own country or they want to invest in specific areas. Overall, when it comes to wanting to invest, America is a safe bet because, at the end of the day, the American economy is the strongest in the world.”
Q: What are trends you have seen in the Forex market?
“This is interesting because we’re not really seeing a trend other than the dollar strength; we have seen that dollar/Rand go from below R14 up to now R15,11 (as at 06 October 2021). That's incredible movement. It’s possible that the strains of Delta and Beta could negatively affect the South African economy and subsequently the Rand.”
Q: Why trade Forex? Is it lucrative?
“Is it lucrative, absolutely! But these are times where there is a lot of volatility. When there's a lot of volatility and things are not noticeably clear, prices move quickly. You just need to look at how the dollar/rand moved. It is a time where people can make vast amounts of money but there is also a lot of risk in the market. This is a market which is really interesting. There are people making a fortune and we are seeing life-changing profits. On the other hand, there are obviously people who are losing money, and that is what people need to be aware of; this is a market where you can make a lot of money but you can also lose.”
Q: What words of wisdom do you have for traders in South Africa?
“I always say jump in but don't put yourself at too much risk. Understand what you're getting into. But now is the opportunity to make money in this market due to the volatility. So, I would say to everyone; get involved. Invest a small amount of money if you're not sure and trade minor positions. Hopefully, with time and discipline, you’ll make some great profit out of trading.”
For more information on CMTrading, visit their official website at www.cmtrading.com or call +27105008026, and one of their friendly staff will assist you.
CMTrading is the brand name of Global Capital Markets Trading Ltd (A Seychelles company, company no. 104785)