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Will Covid-19 cause growth in retail trading?


Rise in FX volumes during lockdown

I noticed something peculiar but now in hindsight, not entirely unexpected. Retail trading volumes increased across the board. This wasn't just in the Robinhood sector which sees mainly American millennials playing the stock market but this was in the largest market, FX, as well as the CLS chart shows.


The decision to lockdown economies was the right one. One could argue that in some instances it was over the top for example here they used the pandemic as an excuse to ban all sales of alcohol and tobacco and while longer term that may be a good thing, the alcohol industry has taken a huge hit in South Africa. Our economy was already amidst a major struggle with the ZAR weakening and it did not need this. Yet with all these income support that governments are dishing out and more time on everyones hands, it is a matter of time people and especially South Africans will see the benefits of learning technical analysis, a bit on the fundamentals and then taking to their screens to make a safe and steady monthly income. We are already seeing a surge in members joining our services on this website and many are very new to trading.


In my experience the key for these new traders is to first practice on a demo account or dabble with small amounts of money. The biggest pitfall in retail trading is over trading or high frequency trading. I trade just 5 or 6 positions a day at this moment of increased volatility and in normal periods just 2-3 trades. My trade sizes are in the 300 to 500 ZAR range. The charts are your best friend and investing the time to learn them is the best strategy or using these in conjunctions with a good signal service which acts as an indicator.


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