It’s no secret that the world of trading is a complex one. The markets can be unpredictable, and it takes a lot of skill and knowledge to become successful in this field. However, with the right tools and resources, anyone can learn to trade effectively. In this blog post, we will discuss why you should start learning to trade in 2023, and why changing inflation and interest rates means now is a great time to start trading!
2023 is shaping up to be an exciting year for the markets with huge macroeconomic changes across all major economies. This creates once-in-a-generation trading opportunities for those in the markets in the coming year. The heightened volatility that we have seen in the global markets in recent months is expected to continue into next year. This means that there are plenty of opportunities for traders to make money by taking advantage of price movements in different assets, making a potentially more dynamic and lucrative environment for traders. Whether you’re interested in stocks, currencies, commodities, cryptocurrencies, or something else, there are likely to be plenty of opportunities to profit from market fluctuations in 2023. However, now it’s more important than ever to have a strong understanding of how to trade professionally in these changing times.
Volatility is a trader’s best friend. One of the main drivers of market volatility is inflation. Inflation rates globally are the highest we have seen in 40 years. When prices rise, it can create significant uncertainty and anxiety among investors and business owners, which can lead to wild price swings. Inflation can also affect the value of different assets, which can create opportunities for traders to profit from these changes. For example, recently we have seen huge volatility in the energy markets. Higher energy prices have been one of the main drivers of increased global inflation rates. Even so, the latter half of this year has seen energy prices fall nearly 50% since their highs in June 2022. This volatility is great for traders that are active in the energy markets, as more volatility generally means more trading opportunities.
Another factor to consider is the impact of changing interest rates. When central banks raise or lower interest rates, it can have a significant impact on the value of different assets. For example, higher interest rates make it more expensive for companies (and individuals) to borrow money, which can lead to a decline in stock prices. This is what we are experiencing right now. There is currently a global shift to increasing interest rates across the globe from very low levels. Traders that are active in equity indices markets such as the S&P 500 index or FTSE 100 will see many opportunities emerge in these markets as the volatility continues into 2023.
Another factor which will make 2023 a great year to begin trading is the changing levels of global liquidity, or quantitative tightening (QT), that the world is currently experiencing. QT is where global central banks remove liquidity from the system which means there is less money circulating in the economy. This generally means risk assets such as stocks and cryptocurrencies reduce in value as these assets are very sensitive to global liquidity levels. This changing liquidity cycle presents heightened volatility which again presents lots of trading opportunities. As traders can go long and short, this presents new opportunities to the downside of markets. Furthermore, it is widely expected that global central banks may reduce, halt, or even stop QT next year, with many people thinking they may restart Quantitative Easing (QE), which is where central banks INCREASE liquidity back into the system to support the global economies. This would bring further volatility into the markets and create great opportunities for traders.
In conclusion, now is the perfect time to learn to trade. With increased volatility in the markets and the impact of inflation and changing interest rates, having a strong understanding of trading can help you minimise risk and potentially maximise your profits. In addition to the potential financial benefits, learning to trade can also be a rewarding and fulfilling hobby. With the right resources and determination, anyone can learn to trade and potentially succeed in the stock market.
Here at Alphachain Traders, we provide a comprehensive trader development programme taught by people with experience trading at tier 1 investment banks and hedge funds, taking you from beginner to professional funded trader managing our company’s capital within three months.