The credit downgrade and your pocket

Bastian Rubben

SunbirdFx Representative
Messages
7
The credit ranking agency, S&P, has downgraded the perfect rank of the US government’s bonds. Basically it should not have much impact on the financial markets, but yet they react aggressively. The reason is of course panics and hysteria. The concerns from going back to deep recession that the world suffered from on 2008 are causing the investors to through their portfolios back to the markets, in any price they can get. For the long-term investors it might be a good opportunity to pick cheap instruments and wait for their rising. However, inexperienced investors might let the stressful situation to affect their decision process and make wrong calls.

When the stock markets crash most of the people who try their luck in the financial markets usually end up losing. However, I must admit that for me these are the best times for making quick money, but it is only because I am well trained for these kinds of scenarios. The fact that the markets are going only in one direction makes it much easier to analyze a currency’s direction. However, you have to choose the entry point very carefully, since aggressive corrections tend to occur in these kinds of situations. Therefore, my favorite technique is the reversal system- I wait till I get signals that the correction is about to end and the currency is going to reverse. Try to enter in points that amateurs cannot spot, and try to take profits in points where others go in.

What instruments you should trade?

There are some instruments that are investors’ favorites especially when markets are shaking. The traditional strong instruments are the Swiss currency (CHF) and metals (Gold & Silver). Obviously it does not mean that these instruments will continue strengthening, but I will keep my eyes on them. Nevertheless, you should keep your minds open for trading other currencies – there might be opportunities that you wouldn’t want to miss.

Remember: though it is now easier to earn money in the markets, do not tempt to go in unless you spot a real trade-idea. Entering the market just because you afraid "to miss the train" will make you lose your money.
 
Back
Top