Useful Tips for Trading the Markets During Times of War

Image

The war in Ukraine has great implications on the global economy and the broad financial markets. Because the countries involved in the conflict are large exporters of energy, agricultural goods, and commodities, supply chains could take a big hit. It is during these moments traders are faced with challenges, but they need to adapt fast.

If you are not already using a position size calculator and taking steps to reduce your exposure, it might be the right time to act. This is just one of the golden tips for trading during times of crisis. Let’s take a look at some more important ones.

Tip #1 Trim position sizing

Although the elevated volatility and large price action swings might look like “once-in-a-lifetime trade opportunities”, in reality, the risks involved are greater. Counterintuitively, it would be better to reduce trade size and adjust risk management parameters.

By trading smaller amounts you gain more flexibility, including the ability to place wider stop losses, without risking a larger percentage of your account balance. Also, if things go wrong, the loss will not be greater.

Tip #2 Be aware of headline trading

Markets get emotional and react impulsively to any news headline released by major outlets. Just recently, stocks jumped in pre-market following positive remarks made by Russian President Vladimir Putin, even though the war is far from over.

Similar situations occurred when negative news was published, driving the risk sentiment lower. It wouldn’t be appropriate right now to jump the gun and place trades impulsively, especially if prices have already moved up or down. Wait and see what develops before making a decision.

Tip #3 The price can overshoot

When volatility surges anything can happen and a trend could extend beyond your expectations. Support and resistance levels are less significant because liquidity is thin and the price breaks above/below them, only to resume in the countertrend direction afterwards.

Gold price, for example, rose close to its 2020 highs and when everyone believed a breakout would be imminent, the precious metal started to weaken, leaving all who bought at the top underwater. Once the initial euphoria settles, the market starts to price in the substance and more often than not, what looks like very positive news might actually be nothing.

Tip #4 Adjust trades frequency

As tempting as it can be, increasing trade frequency will very likely mean a higher probability to make mistakes. Prices are choppy so more trades might put you in an uncomfortable position often. Instead of that, do the opposite and reduce the number of trades per day/week.

Be selective and choose only the setups that you believe could end up positive. Big financial institutions have access to advanced algorithms, the best execution, and information, which enables them to place trades before retail traders even find out what happened.

Wartime is when you need to have a conservative approach and not think about exaggerated returns. There will be a time when markets price in the war, starting to focus on other predictable variables. Until then, stay safe.

Share
Related Stories
Image
25-February-2024

Climate Change: Agric Experts Advocate Smart Farming Practices

By Bon Peters Agriculture experts have advocated “smart farming practices” to combat climate change, improve productivity and enhance food security in the country. They noted that if climate change challenges were not nipped in the bud, more than 52 per cent of the country’s agricultural production would be threatened by 2050. The experts under the aegis of the Society of Action in Nigeria (SCAN), in collaboration with the University of Port Harcourt, disclosed this during a workshop organized for women and youth leaders on Thursday in Port Harcourt the Rivers state capital. A Senior Lecturer in the Department of Agricultural

Image
23-February-2024

Port Harcourt Refinery to be Fully Operational Soon—FG

By Adedapo Adesanya  The federal government has disclosed that the Port Harcourt Refinery should become operational very soon as it has attained 80 per cent completion. The Minister of State for Labour and Employment, Mrs Nkeiruka Onyejeocha, during a tour of the facility, disclosed that the refinery would produce two million litres of Premium Motor Spirit, otherwise known as petrol, and 2.2 million litres of diesel per day upon resuming operations. In a statement by the Director of Press and Public Relations in the Federal Ministry, Mr Olajide Oshundun, it was further stated that the old plant should produce 54,000

Image
23-February-2024

Customs Street Cracks by 0.12% as Traders Sell Off Wema Bank, Others

By Dipo Olowookere The bulls lost control of the Nigerian Exchange (NGX) Limited to the bears on Thursday amid sustained weak investor sentiment. Customs Street ended in the red zone by 0.12 per cent after it recorded 20 price advancers and 28 price laggards, implying a negative market breadth index. DAAR Communications was on top of the losers’ table yesterday after it let go of 10.00 per cent of its previous day’s closing price to trade at 72 Kobo. Wema Bank shed 9.93 per cent to sell at N7.80, PZ Cussons went down by 9.89 per cent to N24.60, Academy

Image
23-February-2024

FAAC Disburses N1.2trn to FG, States, Councils for February Allocation

By Aduragbemi Omiyale About N1.2 trillion, precisely N1.149 trillion, has been disbursed to the federal, state and local councils as their allocation for February 2024. The money was part of the revenue generated by the nation in January 2024. A total of N2.068 trillion was generated last month by Nigeria, but N1.149 trillion was shared, comprising distributable statutory revenue of N463.079 billion, Value Added Tax (VAT) of N391.787 billion, Electronic Money Transfer Levy (EMTL) of N15.922 billion, and Exchange Difference revenue of N279.028 billion. A communiqué issued after the end of the Federation Account Allocation Committee (FAAC) meeting held yesterday

More Stories
Image
21-March-2021

NAFDAC Raids Bakeries, Water Factories in Rivers

By Ahmed Rahma The National Agency for Food and Drugs Administrative Control (NAFDAC) has raided some unregistered bakeries and packaged water factories in Rivers State. A statement issued on Saturday by the agency disclosed that the operations were carried out on the Aboloma Road area of the metropolis with the assistance of security officials. “The raid became necessary following a tip-off by concerned citizens about the products. “At Fimie Market, Aboloma, NAFDAC team of officers accompanied by policemen from Rivers State Police Command confiscated a large quantity of unregistered Nourish Delight Bread and doughnut as they were being sold to

Image
01-September-2017

Access Bank Redeems $350m Eurobond

By Modupe Gbadeyanka Access Bank Plc has announced the final redemption of the $350 million Eurobond Notes due July 25, 2017. The securities were issued in 2012 by Access Finance B.V.- a direct, wholly owned subsidiary of the Bank – on the back of an unconditional and irrevocable guarantee of the Bank. In October 2016, holders of $113million of this note elected to exchange same for a new 5 year bond issued by the bank at the time. Upon maturity of the Eurobond in July 2017, the outstanding portion of $237,003,000 as well as the final coupon value of $8,698,010.00

Image
16-November-2016

Tanker Explosion Leaves 3 Dead Along Lagos/Ibadan Expressway

By Dipo Olowookere An early morning tanker explosion along the busy Lagos/Ibadan expressway has left at least three persons dead. The incident occurred in the early hours of Wednesday, November 16, 2016 reportedly around Berger area of the expressway, inward Ibadan. Reports say the tanker, which was fully loaded with petrol, fell and spilled its highly inflammable content on the ground before bursting into flames. According to the General Manager of the Lagos State Emergency Management Agency (LASEMA), Mr Tiamiyu Adesina, only three persons have been confirmed dead at the moment, while efforts are being made to salvage the situation

Image
28-January-2022

IPMAN Laments Selective Supply of Petrol to Private Depots

By Adedapo Adesanya The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised an alarm of an alleged selective supply of premium motor spirit (PMS) otherwise known as petrol to private depots, making it impossible for the commodity to be sold at the government upper price band. Unlike government registered depot operators whose interests are being protected by IPMAN, private depots operate autonomously in the country. The association, in a statement by its president, Mr Debo Ahmed, urged the government to make sure the Nigerian National Petroleum Company (NNPC) Limited always have enough petrol stock to serve the country. In

Image
11-December-2017

Nigerians Ready to Forgive PDP, Kick Out APC in 2019—Ologbondiyan

By Modupe Gbadeyanka The newly elected National Publicity Secretary of the Peoples Democratic Party (PDP), Mr Kola Ologbondiyan, has disclosed that Nigerians will forgive his party and eject the ruling All Progressives Congress (APC) from power in 2019. Mr Ologbondiyan made this disclosure on Monday on a live programme aired by RayPower FM called Political Platform, which was monitored by Business Post. The opposition spokesman, while reacting to comments made by his counterpart in the APC, Mr Bolaji Abdullahi, who was his former colleague at ThisDay Newspaper, where the pair worked on the political desk of the paper, described as

Image
08-November-2021

DBN Holds Capacity Building Summit for Techpreneurs

By Adedapo Adesanya As part of its commitment to alleviating financial constraints and improving the capacity of SMEs in Nigeria, the Development Bank of Nigeria (DBN) recently held the first edition of its Techpreneur Summit in Lagos. The summit themed Starting Local, Scaling Global, was aimed at driving conversation in the technology sector and accelerating its impact on the social-economic development of Nigeria, by creating jobs, improving the lives of people, and scaling up Nigeria’s tech presence globally. Executive Director, Finance/Corporate Services, Mrs Ijeoma Ozulumba, in her opening remarks said “the initiative will avail tech-based businesses and techie minds the

Image
22-October-2019

CBN Tackles IMF on Forex Restriction Policy Over FDI Inflow

By Adedapo Adesanya Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has opposed the observation put forth by the International Monetary Fund (IMF) that restrictions placed by the federal government on foreign exchange on some items was impeding the flow of Foreign Direct Investments (FDIs) into Nigeria. The CBN chief made his stance known on Sunday while briefing journalists on the sidelines at the 2019 IMF and World Bank Annual Meetings in Washington DC., the United States. He said that the IMF stance on FDIs being affected by goods that could be produced locally as a result of

Image
05-December-2017

Reps Adopt 2018-2020 MTEF Document, Raise Oil Price to $47

By Modupe Gbadeyanka The report on the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) presented to the House of Representatives two months ago by President Muhammadu Buhari has finally been adopted. However, before the consideration and adoption of the report of the Committees on Finance, Appropriations, Aids, Loans and Debt Management, Legislative Budget and Research and National Planning and Economic Development on the 2018-2020 MTEF and FSP today, the 2018 Appropriation Bill had scaled second reading at the lower parliament without a dissenting voice. But a member of the House, Mrs Betty Apiafi, had attempted to

Ad
Ad
Recent Stories
Image
26-February-2024

Global Finance Names Ecobank Best FX Bank in Nigeria

By Dipo Olowookere Ecobank Nigeria Limited has been named as the Best FX Bank under the Country & Territory Awards category for Nigeria in the 2024 Global Finance’s annual SME Bank Awards. The parent company of the lender, Ecobank Group, on its part, clinched the Best Bank for SMEs in Africa 2024 award, reflecting its unwavering commitment to meeting the specialised needs of SMEs across its diverse markets. At the award ceremony held on Tuesday, February 20, 2024, at the Glaziers Hall in London, the United Kingdom, Global Finance explained that the Nigerian subsidiary of the leading pan-African Banking Group

Image
26-February-2024

GTCO, FBN Holdings, Transcorp Close as Busiest Stocks on NGX

By Dipo Olowookere The trio of Guaranty Trust Holding Company (GTCO) Plc, FBN Holdings Plc, and Transcorp Plc ended as the busiest stocks on the Nigerian Exchange (NGX) Limited last week. They accounted for 343.584 million shares worth N9.431 billion in 5,659 deals, contributing 24.96 per cent and 29.86 per cent to the total trading volume and value, respectively Data obtained by Business Post showed that the market recorded a turnover of 1.377 billion shares worth N31.584 billion in 42,040 deals versus the 1.559 billion shares valued at N36.497 billion traded in 42,546 deals in the preceding week. Financial equities

Image
26-February-2024

Excitement as Tinubu Commissions Geometric Power Plant

By Aduragbemi Omiyale The city of Aba in Abia State is beaming with excitement as President Bola Tinubu is expected to commission the Geometric power plant today, Monday, February 26, 2024. The facility is the first integrated power plant in Nigeria. It is situated in the Osisioma Industrial area of Aba. It is expected to provide 24-hour electricity to the city and about nine of the 17 local government areas of the state. The 181-megawatt Geometric power plant cost about $800 million and was done by a former Minister of Power, Mr Barth Nnaji. Electricity from the plant will be

Image
25-February-2024

Customs to Adopt Stable FX Rate for Cargo Clearance

By Adedapo Adesanya The Central Bank of Nigeria (CBN) has reviewed the formula for fixing foreign exchange (FX) rates for customs duties for cargo clearance after uproar over the constant changes in the rate. The apex bank asked the Nigeria Customs Service (NCS) and other related parties to adopt the closing FX rate on the date of opening Form M for the importation of goods, as the forex rate to be used for Import Duty Assessment,. This was disclosed by Mr Hassan Mahmud, the Director, Trade and Exchange Department of the CBN in a memo on Friday in Abuja. According

Image
25-February-2024

Climate Change: Agric Experts Advocate Smart Farming Practices

By Bon Peters Agriculture experts have advocated “smart farming practices” to combat climate change, improve productivity and enhance food security in the country. They noted that if climate change challenges were not nipped in the bud, more than 52 per cent of the country’s agricultural production would be threatened by 2050. The experts under the aegis of the Society of Action in Nigeria (SCAN), in collaboration with the University of Port Harcourt, disclosed this during a workshop organized for women and youth leaders on Thursday in Port Harcourt the Rivers state capital. A Senior Lecturer in the Department of Agricultural

Image
25-February-2024

VFD Group’s Adeniyi Adenubi Mentors Next Generation of Entrepreneurs

An executive director of VFD Group, Mr Adeniyi Adenubi, has mentored some students of the the Nigerian University of Technology and Management Scholars Programme (NSP). The mentoring session was to enlighten the next generation of entrepreneurs about the complexities of building a business, highlighting the impact of partnerships, entrepreneurial spirit, and service in the world of business, with the core message being Dream and believe in your dream. The Nigerian financial and investment expert spoke about his personal journey, which is intertwined with the dynamic principles of VFD Group, which include Entrepreneurial Ethos, Ambition, Agility, Partnerships, Innovation, Courage, and Commitment.

Image
25-February-2024

Why Trade Between India and Russia is Experiencing Upward Trend—Kotwani

By Kestér Kenn Klomegâh As President of the Indian Business Alliance (IBA) and the founder of the Imperial Tailoring Co., Sammy Kotwani, offers comprehensive insights on the evolving dynamics of Indian investment prospects in the Russian Federation. He also discusses, in this interview, aspects of business challenges and roadblocks in the context of geopolitical changes and competition as well as the current economic cooperation between India and Russia. Here are the interview excerpts: How would you characterize the geopolitical changes on investment prospects for Indians in Russian Federation? Geopolitical changes have significantly influenced investment prospects for Indians in the Russian

Image
25-February-2024

ECOWAS Lifts Sanctions on Niger, Mali, Guinea

By Adedapo Adesanya The Economic Community of West African States (ECOWAS) has resolved to lift some sanctions on Niger Republic, Mali, and Guinea. The resolution was taken at the extraordinary summit on the peace, political, and security situation in the ECOWAS sub-region in Abuja on Saturday. While the regional bloc said the political and a few targeted sanctions on the Niger Republic remain, it lifted some financial and economic sanctions on Guinea and others on Mali. Following the military coup in Niger Republic on July 26, 2023, which toppled President Mohamed Bazoum, ECOWAS imposed several sanctions on the country. Now,

Image
25-February-2024

SERAP Sues Wike, Governors Over Missing N40trn Allocations

By Adedapo Adesanya The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against Nigeria’s governors and the Minister of the Federal Capital Territory, Abuja, Mr Nyesom Wike, over their failure to account for the alleged missing N40 trillion federal allocations meant for local governments in the states and the FCT. The suit followed the damning revelations by former President Muhammadu Buhari who in December 2022 stated that “if the money from the federation account to the states is about N100 million, N50 million will be sent to the chairman but he will sign that he received N100 million.

Image
24-February-2024

Consumer Goods, Banking Stocks Lift Equity Market by 0.84%

By Dipo Olowookere The Nigerian Exchange (NGX) Limited rebounded by 0.84 per cent on Friday, lifted by bargain-hunting in the consumer goods and banking sectors. The consumer goods index went up by 4.05 per cent during the session, as the banking space increased by 0.67 per cent, while the insurance counter depreciated by 0.09 per cent, as the energy and industrial goods sectors closed flat. At the close of transactions, the All-Share Index (ASI) grew by 849.20 points to 102,088.30 points from 101,239.10 points, and the market capitalisation expanded by N464 billion to N55.861 trillion from N55.397 trillion. Business Post