Tips for investing in GBP as a foreign currency trader post-Brexit
Brexit needs no introduction to anyone around the UK, and it is an issue that still provokes strong feelings with many people. After the Conservative Party’s landslide election win in December 2019, Brexit has now officially happened. The UK left the EU on 31st January 2020 and is now in a consultation period with Europe to see how it will all work in practice. If you invest in the forex market as a career or run a business that invests money into it, you may wonder how to approach trading GBP in this post-Brexit landscape. To help out, we take a look at some of the best tips to take on board for now.
Keep an eye on the financial news
This is something of an obvious point and something that investors should really be doing anyway! However, some may invest in GBP currency pairs for the long term and not be used to reviewing their trading portfolio that often. Others may usually trade only on technical analysis when it comes to GBP. In this post-Brexit world, it is more prudent to keep a regular eye on any political or financial news around sterling. Breaking economic news could have an even greater impact than usual now that Brexit has occurred. As negotiations continue and the pound finds its feet on the world stage again, it is wise to stay on top of any breaking stories.
Try out social trading
One of the big successes in the FX trading world in recent times has been social trading. This has been seen on platforms such as eToro that are well-known for offering this feature. Check out this review of eToro for more details about it as a broker. In simple terms, it lets you learn from and copy the trades of more experienced investors. While you need to choose who to follow very carefully, using social trading can give you a feel for how to trade GBP post-Brexit and where it could be headed next. At the very least, it may provide advance warning of any expected drops in sterling to plan for!
Sit on the sidelines
For many businesses that like to invest some profits into GBP pairs on the FX market, the best thing might simply be to sit it out for now. Predicting price movements is no exact science at the best of times, and with post-Brexit negotiations still ongoing with the EU, GBP could still be open to volatility. Many businesses could simply choose to invest in other currencies while the fallout from the UK leaving the EU continues. Once more time has passed and we move further into a stable post-Brexit UK, you could move your money back into sterling with more confidence.
Brexit is done but not quite over
While there is no doubt that the UK has left the EU now, the ongoing consultations with Europe still mean that the shadow of Brexit lingers on somewhat. If you invest in GBP on the global forex market, it may leave you a little unsure as how to proceed. While it is ultimately your own decision, hopefully the above tips will help.