Usually I don't do politics, no interest in that. However, when politics crosses with my passion of trading, this is the time I am happy to jump in and tell you what's what - and we will not be looking and reviewing the agenda today, but the impact of news on markets that we all love (or not) and trade. The thing is - everybody knows that news affect the market, and especially the stock market. Though stocks may be affected a little more than other markets, the impact is still strong and demands to be reviewed. Therefore, we will see the influence of political events on markets that we trade on a daily basis.

There's type of analysis called - Fundamental. This has nothing to do with fun, unfortunately, despite the name might suggest, but it actually studies geopolitical and economic events to accurately forecast what's gonna happen when a next event takes place. And by the way, don't think that if it's CFD - it doesn't actually have the same effect because you don't own an asset. IT has direct effect because it still mimics the price of a real asset so when the price changes, you would feel it for sure, despite being the owner of a commodity or not.

* Looking at overall impact of world politics affecting CFD markets, we can say that:

People usually go into safer instruments when there is a conflict or reasons that may indicate that local currency is going down, and in this case, most people turn to gold as a safe-haven to protect their funds. Many people used to choose USD as their safe-haven, but nowadays, this is not as it was, so more people are turning to gold.

By the way, if we are talking about safe currencies, there is one more legit currency to invest in:

The last time it was in a serious downfall - it was Jan 2010, and since then, it has been pretty strong - but why people choose it is not because of power, but because it's stable, supported by the Swiss government that is built on their values and banks ;)

* Supply stoppage

Not just war itself, but sanctions can also disrupt the flow of commodity, (sometimes even physically) and you can't export oil if the port or airport or any other logistic hub is taken over, duh, and this may raise the price.

* Tension

Political tension may cause uncertainty in the area, and the government may change the policies, rates and etc...

When the invasion of Ukraine happened in 2022, some assets were impacted the in the market:

* EUR/USD - as Russia was exporting gas to Europe, it stopped due to war and Europe being against it, and then the continent got cold... so the Euro has weakened by quite a bit. The price actually went down almost 15% since Feb 2022 until it's sublte retaliation from Oct to Dec of that same year.

* Wheat - before the war started, Ukraine was at number 7 in the list of largest wheat exporters of Europe, and after the war, the number went down, as you can pull up a wheat chart and see what happened after Feb 2022. On the 21st of Feb the price is around 840 and by the end of the week on 28th - over 1200. This can show you the overall scale of how powerful the impact may be, and this just a country at number 7 (was projected to be number 5 actually).

* Same thing happened with Crude Oil - and lookin at brent at that time, where it went from around 90 to above 130 at some point within two weeks.

How to play it cool with the news?

Well, unless you have millions in the bank in a weak currency, you don't. But if you are into trading CFDs and you just want to trade through the news that may not affect you directly (or may) with a controlled risk, these are the options one may take in different scenarios:

- If there are conflicts around the world, and those are actually global or threatening a large territory - or just all over the press, then the safe-haven strategy could be useful. Like when Iran threatened to start a war, or when Russia threatened Europe, you will see that Gold prices usually surge during this time. Moreover, people like to invest in the safer currencies as CHF as we talked about earlier, but also in JPY as well, as Japan has a solid economy.

- Political events and a crazy market. The word crazy is just used to emphasize volatility that is usually stronger than usual, and we saw it during the elections when GPB/USD and EUR/USD was moving quite robust. The same increased volatility comes into play when the news sanctions get announced, and this modern times, the tariffs set by Trump shaken the whole market overall - paired with an April Non-farm payroll mostfly for USD related pairs.

- When tension gets too high, as the tech market of China. If US-China Tech war escalates, this may actually distrupt a lot of aspects, and stocks of tech companies would definitely react to it.

What to do:

What you have to do is monitor the news and you can also read insights on what do experts say about what's gonna happen, but be objective and don't shift the narrative to your illusory advantage. It's important to be fair even if your "team" is loosing and the prices are about do go down despite your hopes for profitable longs, work with facts, not with emotions or your expectations of the pair.

Always make sure to maintain proper risk management - especially when you trading news, because it may just sweep you if you are not paying attention, therefore, make sure to risk proper amounts and always use stop-loss and TP in your trades.

Nothing here is investment advice, either on the landing page or the Terms of Service page. Don't follow anything without thoroughly researching it