Manmohan Singh is an entrepreneur, strategist, founder and board member of multiple successful financial companies throughout Asia and Europe.
We were given exclusive access to Manmohan who was asked to input into our FX In Quarantine series – an informative resource for traders during this, particularly volatile time.
We asked Mohan:
1. What has shocked you about the COVID-10 crisis?
My answer isn’t related to the markets specifically but is a personal observation. It’s been shocking to see how fragile life is and how fragile we are, as human beings. Despite all our intellect and incredible achievements, this tiny viral organism has now brought the world – and our life as we know it – to a standstill.
These worldwide events have made me reflect on what we give our priority to, in our everyday lives. For instance, the world – until the virus hit us – has been talking about climate change and pollution, and we’ve seen that our efforts have barely improved the environmental situation.
And then what happened… mother nature stepped in to fix the problem!!! Amazingly, we are seeing less pollution as well as improved social interactions between families and neighbours.
As for the markets, the markets are doing exactly as – reacting in extreme ways and affecting absolutely every financial participant, whether they are trading or not.
2. How do you anticipate the markets will cope with closures?
In my mind, we have not seen the bottom yet. Closures will impact the market in ways we have not seen ever before. People are in fear regardless of where they are in the financial food chain. From the small businesses all the way up to the huge hedge funds and banks – ultimately we are all subject to the same global threat. We are all people with the same fears.
For now, the market is fear-driven and until there is a proven, effective cure to this virus, the markets will continue to be reactive. In my view, no amount of government intervention will help, but what they can do is to buy us time, which might be the short-term answer to help us flatten the curve.
3. Who do you see as benefiting from this crisis?
From the perspective of the financial markets, and without singling out any industry, I would say that the following will benefit in a big way: smart investors who understand long-term investing.
I believe that the collapse of prices will bring opportunity for big fish to pick up huge investments at major discounts. As for day traders, the winners will be those who have equipped themselves with the knowledge and resources to endure the volatility of the big swings we are seeing daily.
Reacting to sharp moves, without having knowledge of a solid trading strategy will hurt traders, so don’t react, keep RISK MANAGEMENT at the forefront of your mind. With this in mind, I don’t see any reason stopping day traders from thriving with the current situation.
4. What advice would you give to market participants?
First and foremost, stay vigilant.
Make sure that if you’re going to day-trade the markets, that you have sufficient margin to sustain the volatility. Have a good risk-management strategy and protect your equity. Don’t rush into any knee-jerk decisions, look for good entries and stay within the trend.
Remember, it’s impossible to predict the market, not even Warren Buffet has successfully done that! So, stay cautious, have sufficient equity, place smaller trades in line with the size of equity you have and to sustain large volatility, and finally – stay with the trend.
For more interviews like this one, plus to access our free SOS resource for traders in quarantine – or out! – visit http://tiomarkets.com/fx-in-quarantine