How Can Brokers Equip Traders to Handle Market Volatility?

FinanceFeeds Editorial Team

The CBOE Volatility Index (VIX), which is considered the barometer of market volatility, spiked to an almost record high of over 65 in March 2020, in sync with the pandemic outbreak. Although the index declined through the rest of 2020 and in 2021, it surged more than 87% in the first half of 2022. VIX is commonly known as the “fear index,” reflecting the fear of uncertainty among investors. 

News of geopolitical tensions, economic slowdowns and changes in government policies can lead to fear of uncertainty, triggering volatility in the financial markets and making traders exit positions or remain on the side-lines till the volatility subsides. During such times, traders need to be motivated and reassured to continue trading. There are a few effective ways to do so.

Providing the Right Set of Tools

Volatility Analysis: Even during long periods of high volatility, there are times when markets are calmer. A tool that offers traders a visual representation of expected volatility in various assets can help them plan their trades when volatility subsides.

Identify Trading Opportunities: Brokers can integrate tools on their site that present exciting trading opportunities, based on deep technical analysis. These can also be shared as trading alerts via email.

Risk Calculator: This enables traders to determine their risk exposure and modify their strategies based on their risk appetite and desired risk-reward ratio.

High Probability Trade Set-Ups: Providing high-probability trade set-ups can help traders easily identify recurring tradable situations in their chosen assets.

Trade Validation: A tool that can highlight the quality of the pricing and execution of a trade can prove highly useful when there is high uncertainty in the market.

Integrating the right set of tools into the website can enable brokers to inspire traders to continue trading during volatility or an overall market decline. 

Continued Communication is Key

Education-Based Content: Sharing relevant and relatable content via email, social media posts and newsletters can reassure and inspire traders. They need to understand that volatility presents more exciting trading opportunities than a flat market, the different strategies for trading during high volatility, and the best risk management techniques to adopt.

Push Notifications: Market commentary and summaries of market analysis can be sent via SMS to traders directly on their smartphones. Enabling traders to monitor their assets and adjust their strategies with ease, anytime and from anywhere, can help them feel much more in control.

Market Reports: Sharing detailed market reports can help traders better understand the workings of the financial markets, choose the right assets and hone their trading skills. These reports can also provide details of major market indicators, upcoming market moving events and expectations for them.

While communication is essential, it needs to be multilingual to address a global clientele. Communicating in a trader’s preferred language can keep the conversation relatable and sensitive. This goes a long way in building trust, which is even more critical during periods of high market volatility.

The fear of uncertainty can make traders extremely nervous. Autochartist offers easy-to-integrate cutting-edge tools that help brokers earn trust and offer traders an edge in the financial markets to encourage them to continue trading. Contact us to learn more.

Read this next

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

<