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S&P Cuts France, Germany Still AAA

Standard & Poor downgraded the credit ratings of 9 European countries today. France & Austria received downgrades from AAA to AA+. For now Germany still maintains a AAA credit rating.

Other countries downgraded were Malta, Slovenia, Slovak Republic, Cyprus, Italy, Portugal and Spain. This creates an overall negative economic outlook for the Euro in the near future.

Greece is still struggling to avoid default of its debts, but there is little doubt that Greece will default in the near future.

Overall Impact on Forex Prices

The S&P downgrade caused EUR based currency pairs to close down for the week. The downgrade confirmed trader sentiment that the EUR is weakening. This downgrade didn’t really shock anyone, the writing has been on the wall.

While this announcement is evidence of a mid term downtrend, shorting the EUR short term isn’t necessarily the best course of action.

There are other issues which are being temporarily overlooked by the media. The US had it’s credit downgraded back in August.  With all the attention on the EUR right now, there are news items “waiting” to happen for other countries that will surface soon.

What Does This Mean for Traders?

It can be interesting to observe announcements by countries & financial corporations, but it doesn’t tell the complete story. By the time the news gets to reporting something, the effect has typically already been reflected in the price data.

Technical Analysis prevents us from getting too caught up in what we hear in the news.

The EXCITING thing about big news stories is that it creates alot of VOLATILITY. Nobody really knows what is going to happen. The news simply reports what has just happened.

I don’t try to predict what will happen in the future as a forex trader.  Volatility benefits us because we can mathematically gain an advantage from trading when there is confusion in the market. Currently there is ALOT of confusion…so there is ALOT of OPPORTUNITY.

I’ll be sharing more about how you can capture this OPPORTUNITY in upcoming blog posts, be sure you’re subscribed here so you get to learn more about how to profit from volatility.

Posted in News

Equity Mutual Fund Investing No Longer Safe

The absolute best 13 mutual funds based on a CNN survey got 0.25% in 2011 to date. Your savings account is paying more… neither one can keep up with current inflation.

Mutual Fund Meltdown

For the past two decades the public has been sold on the fact that the stock market will always go up over time. Commission based salesman have sold people mutual funds in the 401K as a retirement planning solution. It seemed like a safe & secure way to invest…for awhile it was…

A recent news story on the popular US news show 60 minutes exposed the high level of dishonesty in the equity mutual fund industry. IF you have any of your retirement savings in a 401K plan or IRA (individual retirement account), watch this video immediately (warning: what you see may SHOCK you)

The financial world we are living in is different than it’s ever been in our lifetime. The S&P downgraded the US credit rating in August. The US monetary system isn’t based on gold, it’s based on confidence. This confidence is rapidly eroding…but there is good news for people who wish to educate themselves.

Financial Common Sense

If we look at this situation honestly it’s actually not that shocking that people who had a financial incentive to legally take your money would do so if it would make them rich. It’s a painful lesson, but we also need to claim personal responsibility.

When it’s all said & done it’s your choices that will grant you financial security. Regardless of your age or income level your retirement planning is best left in your own hands & not to someone else. The good news is that you can learn what to do to invest wisely.

Equity Mutual Fund Alternatives

The old ideas of keeping all of your investments in the US Stock Market aren’t going to work moving into the future. With peak oil being reached, we’re not going to see the type of economic growth that we have in the past.

What we are seeing is a shift in where investors worldwide are placing their money. As the US and countries in Europe reach their peak, growth will be experienced in other countries. Money will also be moved around alot more from one currency to another and from various commodities and currencies.

Our money itself is now going to be a lot more sensitive as the world we are living in continues to change. With new information being available to investors worldwide & the financial markets being highly connected worldwide it’s now possible to take advantage of these opportunities for the savvy investor.

Currency Trading Golden Age

In a few years there might not be a US Dollar or a EURO. In fact, many economists are predicting this. But in our lifetimes we will continue to use some form of currency worldwide. There may come a day when there is a world currency, but we aren’t likely to see it in our lifetimes.

This is a great opportunity for you if you would take control of your own financial future and trade currency on the forex market. You can easily protect yourself from the weakening US stock market and the collapsed real estate market and actually profit from the weakening dollar.

If you’re not used to this way of thinking it may seem scary to you. When people ask me what I think about the dollar I tell them as long as it moves up or down I can profit from it! Right now is a golden opportunity for you to profit in an otherwise poor economy (see how a portfolio of currencies performs independently of the state of the economy shattering equity mutual fund performance to pieces).

You can learn how to diversify your retirement planning efforts to escape the equity mutual fund trap and protect your financial future within the next week. I have been teaching online forex trading for almost a decade and I can show you how to trade profitably and safely even in a chaotic and insane economic environment.

Please be sure to sign up for the FREE Forex Sailing course at rapidforex.com. Please don’t hesitate to contact me directly with any questions you have…I’ll get back to you as soon as possible…

Aloha & Safe Investing,

Brian Campbell

 

Posted in News

Understanding The Forex Game

A Very Profitable Game

Speculating on the price of one currency in relation to another is like betting on a game; in the Forex market, the game is between the bulls, who want to pull prices up, and the bears, who want to pull prices down.  The most successful trader will not put himself in the middle of that game just as you or I would not go onto the field in the middle of a professional football game (unless, of course, you happen to be a professional football player).

Instead, the successful trader will stand above the game for the best view and the best chance to bet on the team with the winning play.  With over 1.5 TRILLION dollars traded each day in the Forex market, it’s IMPOSSIBLE for us to influence the outcome of the game between the bulls and the bears – so we don’t try; instead, we take our best, informed, educated guess at who will win a given play, and we bet on it – we speculate.

The fact that we are not actually able to influence the outcome of the game, we are simply speculating “betting” on it, is very important to remember, because it means that what matters to us is not so much who has a better quarterback, or whose coach makes better plays.  Instead, what matters is what other people think.  Which team are other traders going to bet on?  The bulls may be superior in a certain play but if everyone bets that the bears will win, then . . . the bears win.

Trading the Forex IS NOT as much about picking the strongest currency, identifying which country’s particular economic, social, and political situations make its currency the best buy that day.

Trading the Forex market IS about foreseeing which currency the crowd will pick, picking it before they do, and being right.  You want to be able to predict where the herd is going, but you don’t want to get trampled by it in the process.

Trusting the Indicators

That’s why judgment-based indicators (charts) and mathematics-based indicators (technical indicators) can work so well in the Forex market if you do it right – because you are not betting on which currency is stronger, but on which currency the crowd will think is stronger and, in turn, bet on themselves.  The Forex indicators we’ll talk about in this book don’t lead to winning trades 100% of the time.

They lead to winning trades more often than not.  That’s because people are predictable.  Based on history, which tends to repeat itself, we can make well-informed, and educated guesses about which team the crowd will pick based the crowd’s past picks in similar situations.  In essence, trading the Forex spot market is much more about speculating on people’s behavior than on the strength of one currency relative to another.

Bulls Vs Bears in the Forex

In the Forex market, a bull refers to increasing prices, where the trading period’s close is higher than its open.  This means that in that trading period the bulls won the tug-of-war: they succeeded in getting the market to close at a higher price than it opened.  A bear is the opposite; it refers to decreasing prices, where the trading period’s close is lower than the open.  In a bearish period, the bears succeeded in getting the market to close at a lower price than the open.

There is not, unfortunately, any way to guarantee that your trades will be profitable 100% of the time.  In fact, they ABSOLUTELY won’t.  Even the most experienced, disciplined traders take losses.  The difference between experienced, disciplined traders and reckless novice traders is that the disciplined, experienced traders trade based on sound equity management principles so that in every trade they are managing their potential loss (the risk).

While no one can show you a way to make profitable trades 100% of the time, you can greatly increase the probability that many of your trades will be profitable.  You increase the probability that you will profit overall by educating yourself.

1. Learn to Read Charts (I’ll be blogging about this a lot)
2. Learn to use chart-based indicators and technical indicators to know when to enter and exit the market

If you educate yourself on the ways to maximize the probability that you will profit, and if you follow the lessons you are now learning on the rapid forex blog, then you should profit on more trades than you lose.

Posted in Forex Basics