How To Trade When The Headlines Read Like A Horror Story

Have you noticed that the latest global news headlines have been a cross between a comedy and a horror movie? Between planes going down, hundreds of thousands of refugees wandering the world, the threat of global terrorism, and indecisive Federal Reserve and an impending United States election with comical candidates, there’s a lot to read about but trade the news not necessarily a lot to trade about if you’re a news trader. In fact, if you you’re probably interested in more than just the announcements coming – and with good reason. There’s a lot going on, and a lot to be worried about looking towards 2016. But it probably doesn’t have much to do with the market. So what’s a trader to do?

Keep Things in Perspective

It’s not hard to get scared when reading about ISIS, even when you don’t live anywhere near the Middle East. But as a trader, it’s important to realize that while there is a lot of political unrest to be fearful of, it’s not likely to impact the markets in any significant way, at least not in the first quarter of 2016. The refugee crisis which some analysts fear may have more immediate financial repercussions is questionable at best. The refugees have currently arrived predominantly in Greece, and some in Germany. Greece’s economy is already floundering – the influx of immigrants certainly won’t help them, but considering that Greece hasn’t been a strong global player in the past few years, further weakening won’t likely have global repercussions. Germany, on the other hand, has a fairly strong economy and a leader that seems to have plans for the migrants, making the thread of financial instability less worrisome than doomsday-seekers might think.

Stay Focused

For traders, the problems going on in China may be bigger than the threat of ISIS. China’s dismal reports lately have certainly thrown a wrench into a significant part of the global economy, affecting both the most populous country in the world and the countries dependent on China for financial investments and its formerly huge purchasing power. If you’re trading emerging markets and exotic currency pairs you may want to step aside for the moment to see how things develop towards the end of the year and if plans are put into place to ameliorate the problem.