The most recent Global Financial Crisis (GFC) has affected the Forex market in a big way with its devastating effects on the financial markets as well as the lives of all people around the world. However, it is imperative for all Forex traders to understand what is the cause of the current state of affairs so that they can know how to fight against it.
The main cause of this GFC is the spread of a new type of virus named Coronavirus (COV) which was responsible for the severe outbreak of the disease during the 2020 financial crisis. The virus spreads rapidly through financial markets and disrupts the entire system by affecting several critical parts of the system such as trading systems, central processing unit (CPU) and also the networks.
The recent GFC and the impact it has had on the Forex market can be easily traced back to the implementation of various new trading techniques which were not properly tested and monitored for safety reasons. During the last few years the new trading strategies were introduced by many trading companies which were developed in the name of ‘robo trading’black box’ software which were designed by highly skilled software developers from USA and UK.
All these new trading systems made use of mathematical algorithms which were not suited for proper utilization of human resources and human brainpower. The software developed for the purpose of trading were designed to analyze the market conditions and make decisions based on data analysis. The algorithm used for the analysis of the market was different from the one which had been used for stock trading and this made the system completely ineffective in analyzing and predicting market behavior.
The major problem faced by the new trading system was its inability to identify a clear signal of Coronavirus which is caused by a variant of human virus which was able to spread very rapidly during the financial crisis. This new type of virus which was undetected during the peak period of this financial crisis had severely affected the trading system as many of its changes and modifications were undetectable and therefore it was able to destroy the entire trading system causing it to crash causing massive loss to the traders in the currency markets.
This major failure which was experienced by the new trading system had made it mandatory for all Forex brokers to implement automated trading strategies which have been developed specifically for the detection of the symptoms of the virus as well as the analysis of its impact on the market. These new trading systems are capable of detecting Coronavirus and therefore it is important for Forex traders to adopt these trading methods for the future of the trading market.