If the world goes into recession, what happens to trading Forex? | Forex Factory

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If the world goes into recession, what happens to trading Forex?

  • #1
  • First Post: Jul 20, 2008 5:00pm Jul 20, 2008 5:00pm
Hi

This question has been on my mind for awhile now. Currently we see a certain amount of volatility in the various currency pairs. During a recession, will we see more or less volatility when trading forex in general?

I guess the worst thing for us would be if there ends up being a lot of sideways movement instead of bullish or bearish trends.
  • #2
  • Jul 20, 2008 5:49pm Jul 20, 2008 5:49pm
this is a no talk, if the US is currently undegoing a mild recession, this does not mean that the whole world will go into a recession. despite the increasing cost of food and energy, many economies of the world would still be able to adjust to this. besides many economies of the world are still presently sound in terms of their economic performance. if the whole world will go into a recession then it will be in a a matter of centuries to come. in effect to forex trading that i cannot say.
know thy edge and abide by it ! 4 in it shall thou be successful !
  • #3
  • Jul 20, 2008 6:33pm Jul 20, 2008 6:33pm
Quoting robertsonakp
this is a no talk, if the US is currently undegoing a mild recession, this does not mean that the whole world will go into a recession. despite the increasing cost of food and energy, many economies of the world would still be able to adjust to this. besides many economies of the world are still presently sound in terms of their economic performance. if the whole world will go into a recession then it will be in a a matter of centuries to come. in effect to forex trading that i cannot say.
Many thanks for your response.

I guess I was just curious to know what would happen in the worst case scenario But yeah, what you say sounds a lot more plausible now that I think about it.
  • #4
  • Jul 20, 2008 6:54pm Jul 20, 2008 6:54pm
in my view, the more uncertainty, the more volatility. Forex is the last market to die.
USD Est Non Mortuus
  • #5
  • Jul 20, 2008 7:52pm Jul 20, 2008 7:52pm
Quoting LuckyLurker
in my view, the more uncertainty, the more volatility. Forex is the last market to die.
I got to agree with this guy here. The more uncertain things are, the more volatility there is going to be. The only thing you really need to worry about in the currency market is whether the world eventually loses faith in fiat currencies, which seems impossible in the world we live in but isn't so far-fetched in a worst-case scenario.
  • #6
  • Jul 21, 2008 12:35pm Jul 21, 2008 12:35pm
if the whole world goes into recession at the same time, nothing will change because remeber, forex is all relative. even though all the countries in the world can have horrible economies, if they all descend at the same speed, they will all be the same price compared to each other. now, if only some of the countries fall, it would be a big help to us. we can always make money on any price move in forex. the only way forex can be destroyed is with a world currency, which most likely isnt going to happen. so no need to worry. if the world goes into reccession, just make some money!
  • #7
  • Jul 21, 2008 1:19pm Jul 21, 2008 1:19pm
based on the forex world currently, its still reliable
  • #8
  • Jul 21, 2008 3:01pm Jul 21, 2008 3:01pm
I say forex never die Until the time we don't spend currency all over the world, so what our expectation if currency still exist? ,so i say FOREX never die . Forex for life,

honeyboyfx
  • #9
  • Jul 21, 2008 4:52pm Jul 21, 2008 4:52pm
Quoting altrader
Hi

This question has been on my mind for awhile now. Currently we see a certain amount of volatility in the various currency pairs. During a recession, will we see more or less volatility when trading forex in general?

I guess the worst thing for us would be if there ends up being a lot of sideways movement instead of bullish or bearish trends.
I don't know what would happen in a recession but I do know summer time is not the greatest time for trending trading. It is more of a ranging trading.

Look at what happens on July 4th or Memorial day. There isn't much moving at all. Every once and a while, price drops, turns, goes back up, and drops again. I look at summertime kinda the same as when I look at holidays. Summer is just a really long holiday.

If a person goes back and looks at a chart, the patterns forming are no differant than they were when trading ever started with a chart. The best thing to do is use recent support and resistant levels to determine when to buy and sell.

The sooner you can look ahead and see when the "rangebound" trading will begin to start the better. There are so many people that can't stand a ranging market. I love them. Right when I can see the range, I will buy the bottoms and sell the tops.

Ranging isn't much differant than trending. A trend goes up or down. Range goes up and down as well, only sideways.
JOHN 3:16
  • #10
  • Jul 21, 2008 5:32pm Jul 21, 2008 5:32pm
Quoting renasdad
I don't know what would happen in a recession but I do know summer time is not the greatest time for trending trading. It is more of a ranging trading.

Look at what happens on July 4th or Memorial day. There isn't much moving at all. Every once and a while, price drops, turns, goes back up, and drops again. I look at summertime kinda the same as when I look at holidays. Summer is just a really long holiday.

If a person goes back and looks at a chart, the patterns forming are no differant than they were when trading ever started with a chart. The best thing to do is use recent support and resistant levels to determine when to buy and sell.

The sooner you can look ahead and see when the "rangebound" trading will begin to start the better. There are so many people that can't stand a ranging market. I love them. Right when I can see the range, I will buy the bottoms and sell the tops.

Ranging isn't much differant than trending. A trend goes up or down. Range goes up and down as well, only sideways.
Thanks for the reply. This is interesting what you say. I will think more about this
  • #11
  • Jul 21, 2008 6:11pm Jul 21, 2008 6:11pm
Glad to get your brain working a little.
JOHN 3:16
  • #12
  • Edited 6:53am Jul 25, 2008 5:30am | Edited 6:53am
Quoting robertsonakp
this is a no talk, if the US is currently undegoing a mild recession, this does not mean that the whole world will go into a recession. despite the increasing cost of food and energy, many economies of the world would still be able to adjust to this. besides many economies of the world are still presently sound in terms of their economic performance. if the whole world will go into a recession then it will be in a a matter of centuries to come. in effect to forex trading that i cannot say.
There is no such thing as a mild recession. Your either in a recession or your not. The whole world is not going into a recession. The history books will state a recession... they will not state a mild recession.
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • #13
  • Jul 25, 2008 6:14am Jul 25, 2008 6:14am
Forex might die one day if only 3 or 4 currencies will remain. We probably won't see that day.
  • #14
  • Jul 25, 2008 6:52am Jul 25, 2008 6:52am
Quoting cesare76fx
Forex might die one day if only 3 or 4 currencies will remain. We probably won't see that day.
Give me three more years, that is all I am asking for.... three years.

Have a great weekend
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • #15
  • Jul 25, 2008 7:53am Jul 25, 2008 7:53am
Quoting cesare76fx
Forex might die one day if only 3 or 4 currencies will remain. We probably won't see that day.
Just two... gold and silver
  • #16
  • Jul 25, 2008 7:54am Jul 25, 2008 7:54am
Quoting CTGUY
Give me three more years, that is all I am asking for.... three years.

Have a great weekend


Three years for that to happen or for you to finish piling up pips and go for a long holiday? :-))
  • #17
  • Jul 25, 2008 10:11am Jul 25, 2008 10:11am
The foreign currency market will continue to trade. Companies can go bankrupt, the foreign currency exchange can't go bankrupt. Market will always continue to trade.
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • #18
  • Jul 25, 2008 10:50am Jul 25, 2008 10:50am
Quoting CTGUY
The foreign currency market will continue to trade. Companies can go bankrupt, the foreign currency exchange can't go bankrupt. Market will always continue to trade.



It can cease to exist... this market has 30 years, its not like it has a long story. We can always go back to sound money or even other forms of stupid money that would work with fixed exchange rates and there it goes the market out of the window.

Never underestimate protectionist ideas when we're heading into a recession.
  • #19
  • Jul 25, 2008 12:12pm Jul 25, 2008 12:12pm
Talk of world recessions, governments using tax payer money to bail out underperforming/ poor decision making corporations, and all I can think is, Who is John Galt?
Redefining Reality
  • #20
  • Jul 25, 2008 12:55pm Jul 25, 2008 12:55pm
Well I guess I'll be the one with the contrary view. We are heading into a financial crisis the likes of which the world has never seen. As it pertains to the forex market, we'll see more intervention by governments trying to prop up their currency.

Here's some links to back up my opinion:

US Intervention process:
http://www.newyorkfed.org/aboutthefe...int/fed44.html
The Problem:
http://realestateandhousing2.blogspo...cane-gets.html
The Bad news as it happens:
http://patrick.net/housing/crash.html
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