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As 2022 winds down, Founder and CEO of Autochartist, Ilan Azbel takes a look back at the year and talks about his expectations for 2023.
Founder and CEO of Autochartist, Ilan Azbel, is a visionary. He foresaw the need for brokers to support traders in making informed decisions through robust technical analysis as far back as 2001. Under his leadership, Autochartist is the go-to solution for brokers for a wide range of automated analyses, as well as high-quality, informative content based on technical, fundamental and macro-economic data.
As 2022 winds down, Ilan takes a look back at the year and talks about his expectations for 2023.
1. 2022 has been an incredibly eventful year. How did the constant market volatility and bearish outlook impact traders?
I think a negative market move of 25% hits everybody very hard. Even if you’re not a trader, retail investors have seen their retirement savings decimated. That, in conjunction with inflation, I think made 2022 a very difficult year for everyone. Recovery from logistical problems caused by Covid, followed by political instability in Eastern Europe has not done anything to help either. We see retail traders struggle during periods of increased volatility; primarily because they don’t know how to manage their risk and manage losing positions.
2. In a year like 2022, what were the most important tools for informed decision-making in the financial markets?
We’ve seen retail traders go in polar opposite directions. Some have become extreme risk takers; taking gambles on exotic instruments like cryptocurrencies to try and mitigate some of the losses they’re incurring in the equity markets. And we have another group that’s gone extremely conservative and demanded more risk management tools to try and save what they have left.
Unfortunately, I think a large part of retail trading has been driven by social media influencers making outrageous and unfounded claims and predictions. Millennials and GenZ’ers have been most affected by this due to their natural proclivity to seek news and opinions on social media platforms.
Although this younger generation of traders is growing, the larger volumes are still being traded by older, more experienced traders that are not as easily influenced by social media, but still succumb to increased market volatility.
3. A recent report by Ned Davis Research stated that the persisting bearish market sentiment could be a precursor to a stock market rally in 2023. How can brokers best support traders in such uncertain market conditions?
I haven’t read that report, but it’s a fact that the best analysts are only right 50% of the time. I don’t think that anyone can say with certainty that 2023 will be a bull or bear market. However, it doesn’t take a genius either to know that a 25% bearish move is extreme, and perhaps there isn’t much downside left. But we are yet to see whether we’re going to rebound or see more consolidation at the current levels.
I firmly believe that during uncertain market conditions, brokers need to focus on customer retention. If traders keep incurring massive losses, it’s going to be difficult to bring them back into trading. So, I think that giving traders access to education and tools for managing risk is the key to customer retention in 2023. This is the only way to gain trust and demonstrate your commitment to protecting trader interests.
4. The World Economic Forum predicts that retail investors will account for 61% of the global assets under management by 2030 from 52% in 2021. How would you recommend brokers attract and retain today’s empowered and tech-savvy traders?
I cannot argue with the World Economic Forum’s view; we are already seeing this in the OTC industry – increasing deposits that are not being traded. Perhaps the only way to get this money working will be through active management. However, active money management doesn’t yield the returns that retail traders expect through their discretionary trading. So, there may be a rise in AUM, but I believe the gambling mentality of retail traders will continue to grow as inflationary pressures take hold on day-to-day life.
Once again, I cannot stress enough on trader education. As you rightly said, today’s traders are tech-savvy and have high expectations from brokers. Give them the latest technology solutions, automated tools and content to empower them to make their own decisions.
5. What are your predictions for the markets in 2023?
With so much global uncertainty, I don’t think anyone can truly predict what’s going to happen. But one thing that’s becoming slowly apparent is that inflation appears to be easing, and central banks, at least the US Fed, are considering lower rate hikes going forward. This could bring some optimism to the markets. Still, defensive sectors might be the go-to choice for investors in 2023.
On the other hand, most forecasts are for slow economic growth in 2023. This is a good time to diversify investment portfolios. Multi-asset trading could gain prominence due to this. Things might look up if China eases its zero-Covid restrictions and there is some relief to the supply-chain disruptions businesses have faced for two years now. If the Chinese economy reopens, we could also see a rise in demand for commodities, especially oil. This could drive oil prices in 2023.
Plus, it would be interesting to see how the forex market pans out in 2023. Will the GBP touch parity with the USD, or will the EUR gain strength? Things seem to be looking up in the UK, with optimism surrounding the Rishi Sunak administration. Staying updated on geopolitical and economic news would be crucial, if 2022 is anything to go by.
Having said that, I believe risk mitigation strategies will be indispensable. Brokers should consider multilingual, personalised content solutions to establish global leadership, while supporting their clients in the best possible way.
6. Autochartist is already a trusted content partner for brokers. What are your plans for Autochartist in 2023?
We remain committed to innovating so that we can support brokers by providing only the best possible market news, research and analysis, and education to traders. In this regard, we have already worked on 3 more incredible analysis types, which we intend to launch in early 2023. We are already the leader in the breadth of analysis we offer, and in 2023 we plan to go 10 miles ahead of the competition.
Our aim is to ensure that in 2023, there will be no other choice other than Autochartist for any broker looking to empower their traders with market analytics.
