Global markets crashed even more heavily on the ongoing Covid-19 crisis, following large declines in February. The human and economic cost of coronavirus unfortunately continues to grow. The longest ever bull market is US history ends abruptly as a consequence, with economic data turning weak, especially jobless claims. The DOW Jones index fell 16.7%, closing just above 21,900 losing over 3,600 points! The US senate have passed a $2 trillion coronavirus aid bill with scope to increase. Major central banks have slashed interest rates as recession fears rise.
In Europe, widespread lockdowns fuel further declines in European equity markets. The German DAX index lost almost 17% or just over 2,000 points for March. The European Central Bank have reacted by announcing 750bn Euros in asset purchases. Oil has sunk while Gold has soared as a safe haven. The UK FTSE 100 lost 13.8% to close below 5,700 losing over 900 points. Stimulus from the UK came in the form of payments of up to 80% of wages for those not working limited to £2,500 per month. UK markets saw its largest quarterly fall for more than three decades. The largest banks to include Lloyds and Barclays agreed to cut their outstanding 2019 dividends and cut their 2020 proposed dividends.
Market volatility has risen to historically high levels and we stopped trading after the first week of March as volatility levels became too severe for our trade order levels to work effectively. We observe a maximum stop loss distance which we are unable to impose in this market. Wide spreads also make intraday trading less attractive. We continue to remain on the sidelines until the market stabilises and volatility reduces. There is a preference to protect capital currently and wait until things settle down as no doubt there will be a great opportunity once there is more certainty in regards to the coronavirus catastrophe.
Both services posted a negative return, albeit still a market beating return. This month a total of only 64 trade orders were issued, since we stopped trading after the first week. Usually you can expect up to 300 trade orders in any given month. A total of 14 or 22% of trades were activated. The STANDARD service suffered a loss of -8.8% whereas the PREMIUM service lost -7.6% in an unprecedented trading month. The PREMIUM service resulted in a loss of -£1,140 on my £10,000 account due to higher leverage (1.5) used. I also continue to trade on my £20,000 account which suffered a larger loss.
Using low leverage means low drawdowns however if you are comfortable in taking more risk, gains can be multiplied by increasing position size. My position size is included in my orders but obviously users can amend this according to their account size or risk profile. Past performance mentioned is no indication of future performance and may not be repeated.