Articles

Welcome to what will certainly be the first part to a series on a very mythical strategy called the Credit Spread. My intention in writing this article, unlike other article series I have written, is not to teach traders how to trade this strategy, but to merely dispel some of the myths associated with them. I have heard too many stories, myths and almost superstitions about the strategy in my time as a trader, so hopefully this will put them back into perspective.

Nearly three months of 2010 have come and gone and so far, there haven’t been too many bulls to be seen on the Euro. They must be off in a paddock somewhere, enjoying the spoils of the excellent long trading of 2009!

There are many different methods available to traders and investors when it comes to predicting future price movements. Anyone who is trading equities or their associated derivatives will know that an integrated approach (combining technical analysis with fundamental analysis) is by far the most accurate and therefore the most desirable. Of course, there are instruments which can be traded which do not lend themselves to these techniques; things like currencies, futures and indices. When faced with these challenges, how should the trader adapt?

What if China’s warning of a double dip recession were to come true? What would you do? When would you do it?