The Effects of War in the Middle East on Financial Markets

By | August 30, 2013

Friday, August 30th, 2013 by Michael Freeman 

Wars in the Middle East directly impact Financial Markets around the world, creating great investment opportunities for Day Traders.  Following the news at a time of war can only benefit us predict solid trends if we understand how financial markets respond to wars. For decades, the Middle East has been the center of International Media due to the everlasting political turmoil, ongoing religious wars and overall uncertainty.  As traders we are only concerned with observing these wars as they take place and identify ‘windows of opportunity’ for solid trading decisions.

YouTube Video of the ‘The Effects of Wars on Financial Markets’

The questions is which asset should I trade and what signals should I look for when a war breaks in the Middle East?  In reality, worldwide markets are interrelated and wars can actually lead to a butterfly effect! We must always look into Financial Markets directly effected by these wars. Oil and Wall Street Stocks are great examples, for decades both markets have been effected by the war between Israel and Palestine, the US intervention in Iraq and now with the civil war in Syria.

As soon as a war breaks in the Middle East, the the price of Oil goes up and Wall Street Stocks go down. When the US invaded Iraq in 2003 the price of Oil drastically increased and Wall Street was at it’s lowest. Another recent example is when the US announced they would consider lunching an attack on Syria, Wall Street was at a Two-Months Low.  If the US decides to lunch the attack in Syria you can expect the price of Oil to rise.

Identifying the right ‘windows of opportunities’ can be done with basic research, next time you are reading the news about the Middle East, don’t take sides, just make sure that you understand how these events can help you prosper as a trader. Focus on the right assets and you will surely succeed!

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