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Tuesday, September 28, 2010

Mid-week Trading Update (September 29, 2010)

“I hate to see all these aspiring forex traders losing their money. Why do they have to make everything so complicated when, in fact, it’s not at all hard to win?”- Joe Ross

Hello:

This is an update on some of the movements on the markets and what I’m doing about them, plus my losses and profits. The analyses are based on daily charts, looking at the Big Picture, though my entries are on a smaller timeframe. My preferred leverage is 1:100 and my position size is 0.01 lots for each $1000. My maximum drawdown in a week is 3% (worst case scenario). I use the Price Behavior rules for strategic decisions and customized indicators for tactical entries. I open primary positions without predetermined exit target in mind, riding the trend for as long as it continues. The value of patience will forever be emphasized. As long as I stick to my rules and keep my risk low, I’m immune to fear.

Another Ed Seykota? Certainly not! Just that I like to follow the rules of the masters when doing swing cum position trading. There’ll be winning months and losing months, but a good trader should go ahead despite this. Impatient traders should thus avoid strategies that show results only after months (there are strategies that show results in weeks and swing trading rules don’t apply to them).

AUDUSD

Primary trend: Bullish

The strong resistance at 0.9600 has been broken and the bullish bias is still valid. There’s no end in sight to the bullish journey. There’s a possibility that the USD might come to parity against the AUD – but that’s not a certainty. Eventually this pair will fall very hard. My short trade on this pair was a flop.

Order: Sell Limit

Entry date: September 17, 2010

Entry price: 0.9500

Initial stop: 0.9650

Current stop: N/A

Exit price: 0.9650

Exit date: September 28, 2010

Status: Closed

Profit/loss: -150 pips

Percentage growth: -1.5%

NZDUSD

Primary trend: Bullish

This slow pair is experiencing slow but steady bullish run. I was able to break even on a temporary correction before the bullish northward continued. Eventually the bears will gain upper hands. But who knows when?

Order: Sell Limit

Entry date: September 22, 2010

Entry price: 0.7400

Initial stop: 0.7550

Current stop: N/A

Exit price: 0.7400

Exit date: September 22, 2010

Status: Closed

Profit/loss: 0 pips (breakeven)

Percentage growth: 0%

EURCAD

Primary trend: Bullish

I was fortunate enough to get into this trade at the beginning of the extended rally on this cross. If you were able to start this journey with me, you needn’t think of handing in a letter of resignation to your boss (just as you needn’t think of quitting Forex when you suffer one loss).

Order: Buy Limit

Entry date: September 9, 2010

Entry price: 1.3100

Initial stop: 1.2950

Current stop: 1.3587

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: 878 pips

Percentage growth: 8.7%

EURAUD

Primary trend: Bullish

The trend on this cross has finally turned bullish. The AUD is no longer able to withstand the EUR. I think this is a beginning of an upward trend, since any weakness in the Aussie would only fuel the bullish momentum. There’s no open trade now. My next possible trade is either to buy on pullback or sell a serious rally. But the former course of action is more probable.

Order: Buy Limit

Entry date: September 9, 2010

Entry price: 1.3800

Initial stop: 1.3650

Current stop: 1.3871

Exit price: 1.3871

Exit date: September 17, 2010

Status: Closed

Profit/loss: 68 pips

Percentage growth: 0.68%

EURNZD

Primary trend: Bullish

The Price is still quoted above the SMA 20 while the +DI is still easily resting in the region above the –DI, plus the ADX 20 is yet to reach level 30, which signifies that the upward trend may still continue. However resistance after resistance must be broken for this to be done. If not, there’ll be a bearish breakout. A previous Buy Limit order was cancelled, but a new order is now pending.

Order: Sell Limit

Entry date: September 28, 2010

Entry price: 1.8500

Initial stop: 1.8650

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Pending

Profit/loss: N/A

Percentage growth: N/A

AUDJPY

Primary trend: Bullish

We’re now in the era of the bulls. But in the context of the present uptrend, a bearish dive is likely. If my present short trade fails, then the bullish journey must continue indefinitely. A signal may give you either a win or a loss; but shouldn’t cause any significant drawdown, not to mention a margin call. A margin call is reserved for gamblers only, and if your girlfriend abandoned you because you received a margin call, then you need to learn your lessons both from the markets which move without partiality and from relationships which work only if you have money. Life goes on!

Order: Sell Limit

Entry date: September 15, 2010

Entry price: 81.00

Initial stop: 82.50

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: -6 pips

Percentage growth: -0.06%

Conclusion: I’m concluding with another thought-provoking quote from Joe Ross:

After a trade is executed, what happens next is anyone's guess, and this state of uncertainty can cause stress. The best way to gain control is by organizing your perceptions and activities. If you trade with a detailed trading plan, for example, it helps you in imposing structure onto an unstructured reality. You can reduce some of the feelings of uncertainty by clearly defining a target profit objective as well as entrance and exit strategies. The more structure you impose and follow, the less uncertain and unorganized you'll feel. You will know what to do and when to do it. Your trading plan will be easy to follow, and you will be more in control.”

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Email: amustapha@fxinstructor.com

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

Nice trading tips are available at: www.ituglobalforex.com

And my past articles are also available at: www.ituglobalforex.blogspot.com

Yahoo! Messenger ID: saazalmu

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Sunday, September 26, 2010

A Proper Trend Trading

“Think how calm you could be, knowing that your risk is always the same.” – Van. K. Tharp

Hello:

You don’t need complicated strategies to make money on the markets. What you eventually need are logically simple, stupid but effective trading systems. The more complicated you make your trading, the harder you make life for yourself and the more stress you undergo. I’ve tested hundreds of trading systems personally and I’ve chosen very few of them that can survive the market conditions. My aim is to make money (and help my clientele make money as well), no matter the direction of the markets. When you accept the fact that the markets aren’t predictable and you develop simple strategies to catch many pips no matter what, you’ve already made it.

Here are my trading results last week:

AUDUSD

Order: Sell

Status: Open

Profit/Loss: -98 pips

EURCAD

Order: Buy

Status: Open

Profit/Loss: 733 pips

AUDJPY

Order: Sell

Status: Open

Profit/Loss: 12 pips

NZDUSD

Order: Sell

Status: Open

Profit/Loss: 55 pips

There are no trades on EURNZD and EURAUD at the moment. The above instruments are what I mention in my weekly trading analyses based on what I do on a real-time account.

GBPJPY Strategy

Order: Sell

Status: Closed

Profit/Loss: 135 pips

Order: Buy

Status: Closed

Profit/Loss: -95 pips

The simple logic behind the GBPJPY strategy will soon be explained in details in a future article. It doesn’t matter the type of trading techniques you’re using as long as you make profits with it. As long as your average losses is less than your average profits, you should be very much OK. Unless otherwise requested, I deeply want my clients to count their pips on weekly basis (not on monthly basis); and that’s the reason behind the GBPJPY strategy and the ones below.

Other Strategies

EURSUD

Order: Buy

Status: Closed

Profit/Loss: 120 pips

Order: Sell

Status: Closed

Profit/Loss: -40 pips

Order: Sell

Status: Closed

Profit/Loss: -40 pips

USDCHF

Order: Sell

Status: Closed

Profit/Loss: 120 pips

EURNZD

Order: Buy

Status: Closed

Profit/Loss: 150 pips

Order: Sell

Status: Closed

Profit/Loss: -60 pips

The strategies that use EURUSD, USDCHF and EURNZD take a total of 15 working minutes per week, with total net profits of 250 pips (this is the real financial freedom!). In the next few weeks, I’m going to add the signals from these extremely simple, but effective strategies to the signals sent to my clients. The purpose is to make decent overall weekly profits. Likewise, the logic behind these would soon be discussed so that you can see why these trading ideas will constantly outperform the market no matter the market directions.

A Proper Trend Trading

I’d like to tell you about one strategy that can also withstand the markets. It’s to do with a proper trend trading. You see, trading would be much easier if you could know the right timing (entry). Many times you could’ve seen that your trading decisions were right – only that the markets would’ve hit your stops before going in your forecasted direction. If only you could enter the markets at the right time! After you’re able to identify the direction of the markets the challenge now remains getting in at the right time. This is the purpose of the strategy I’m going to give you free.

The strategy information

Timeframes: Daily and hourly charts

Instruments: Any pairs and crosses

Indicators: RSI and EMA (parameters will be sent to you on personal request)

Buy rule: Buy when the price is above the EMA on both the daily and the hourly charts of an instrument, and the RSI is oversold on the hourly chart (The RSI is only on the hourly chart while the same value of the EMA is on both charts).

Sell rule: Sell when the price is below the EMA on both the daily and the hourly charts, and the RSI is within the overbought region on the hourly chart.

Stop loss: 100 pips from the entry price

Recommended position size: 0.01 lots for each $1000

Risk per trade: 1%

Risk management and exit technique: Move you stop to breakeven after you’ve gained 100 pips, and after your profit increases to 200 pips then you can lock 50% of the profits. The more you gain, the more the amount of your 50%. Just remain in the trend until there’s a reversal. But if you like, you can exit as soon as you’ve gained 3 times your initial risk.

NB: Please you may want to open a nice demo account with a reputable broker in order to practice with this strategy for at least, 2 months, until you’re confident in it. You need patience in waiting for the right signals. This is no Holy Grail, but the survival logic is to gain more during winning steaks than you lose during losing streaks. This system won’t work for you if you don’t follow its rules. This is a swing cum position trading system, and therefore, results are evaluated after months, not after weeks.

I’d like to conclude with the quote below:

“Human beings are impulsively driven by greed and the desire to dominate. They will take the easiest way to get and keep what they want. This often has negative and unintended consequences that are frequently destructive. Humans are not naturally prone to accountability or self-discipline, which is why we need laws, rules, boundaries, and limits in society. Trading requires self-imposed limits and these limits must be created through personal accountability. You must know what you require in the way of protocols, strategies and rules in order to create effective self-limits and self-control.” – Dr. Woody Johnson

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Email: amustapha@fxinstructor.com

Yahoo! Messenger ID: saazalmu

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

Nice trading tips are available at: www.ituglobalforex.com

And my past articles are also available at: www.ituglobalforex.blogspot.com

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Friday, September 24, 2010

A Woman’s Addiction To Forex

TRADING IS IDEAL FOR A WOMAN!

Hello:

As I told you in an earlier article, women can be, and are great traders as well. They certainly got admirable qualities that can also help them in trading. There’s no level of success in trading that isn’t attainable by women. I foresee that the number of women in trading would only be increasing geometrically. The purpose of the interview you’re about to read is to encourage women to come out of their comfort zone and embark on their journey towards real financial freedom. N. Hayes is just a woman like you (or your wife, mom, sister, and aunt). But she’s taken a noble decision – to be a successful trader. It’s a wonderful privilege for me to present this interview with her to you. Here we go:

Azeez: Please introduce yourself.

N. Hayes: Hi everyone, my name is N. Hayes, but most people call me N. I am currently living in Europe and I have been trading forex, for more than a year now. Before being a trader, I worked in the hospitality industry, in the Human Resources Department. I enjoyed it very much but I am definitely enjoying Forex more. Trading started out as just a hobby to pass the time and it has now become my full time job and I love it. Travelling is one of my favorite pastimes, other than reading, cooking, gardening, watching movies and TV series. Currently, I am looking at expanding my career by taking a full 10-month intense course in Money Management, Psychology of Trading, Forex Foundation, etc. My goal is to help others get started in trading and to share my knowledge and experience in this business.

Azeez: How did you start your trading career and what really motivated you to start trading?

N. Hayes: I quit my Human Resource Management job a little more than year ago and started trading full time. I have been hooked on trading since early last year when I had to spend so much time at the hospital and at home due to a shoulder injury. I was bored and started to surf around and I came across an informative website on Forex. Coming from a job with administrative and financial background, I became interested in Forex and I immediately opened an account (real account!) and started trading like a pro (no knowledge in FX at all except 2 years in the futures market many years back). I margined out my 2k account in less than a month! That didn't stop me from funding my account again. I promised myself that I would get my 2k back from the market. But this time, I subscribed to a signals provider and learn how to trade by reading FX websites, forums etc. I was doing well, my account tripled the amount and that was when I decided to be a full time FX trader and said good bye to my well paying job. I love the freedom of being able to work from home and the freedom to travel! My first Forex related holiday was to the Las Vegas Trader's Expo, last year in November, which I highly recommend to all traders, especially the ones who are new to this business and wanting to gain more knowledge in trading.

Azeez: Do you think women should be seriously encouraged to trade?

N. Hayes: Being a female trader, one must be prepared to accept her position as an outsider - Trading is a man’s world (I heard this often but I don't see it this way).This is definitely not gender specific. There are definitely more men in this business, but success and failure come from inside oneself. Of course, the circle of "friends" will be more men than women, I can vouch for this. Having thicker skin helps because it does get brutal sometimes, especially when you are trading with a group, sharing ideas and learning from one another. It can get nasty! Anyway, if one's goal is to become a successful trader, then they need to do whatever it takes to learn a strategy, a method, practice it over and over again until it becomes second nature. You may need to work harder as a woman to prove yourself, but that is just a part of the excitement and challenge. Take the challenge and you will be successful.

There are many free educational materials that you can download online and plenty of websites that offer great trading information. You just need to spend time searching for them. If it is tough to be learning on your own, then work with a trading coach or get a mentor to help you and to keep you growing as a trader. Do not be afraid to get help or ask! There is no right or wrong questions. I know some women are scared of sounding silly by asking a specific question. This fear is rather baseless in many respects. I believe it is time for more women to become traders. Contrary to what some might believe, trading does not turn a woman into becoming a non feminine woman or developing a tough personality. Trading is a refreshing change to the female-dominated professions and I do know some women who choose to become a full trader, mainly because of the freedom it offers. A friend of mine who chose to be a full time trader is a great mom to her daughter. She made a deliberate decision to spend more time with her family and less time in the office. It was not an easy choice as she enjoyed her job very much but she realized that Forex can give her the freedom and flexibility of being a mom and a career woman. Being a trader, she does not need to be at the office 8 hours a day.

Azeez: What do you think are the qualities peculiar to women that could help them in trading?

N. Hayes: I think the best qualities we women have is the ability to multi task, use our intuition, and our perseverance. I also believe that our ability to separate our trading lives from our personal lives is a big bonus, as it helps to alleviate the stress of trading… we have other outlets to relieve our stress.

Azeez: What kind of trader are you? What is your style of trading?

N. Hayes: I used to be more of a scalper (very short term trader) but lately, since becoming a full time trader, I am more of a day and swing trader now. This matches perfectly with my method of trading as my trades are based on technical analysis. I am quite conservative in choosing my trades, the ones with high probability set ups.

Azeez: How do you analyze the markets? What are your favorite pairs/crosses and timeframes?

N. Hayes: Being a conservative technical trader, I describe myself as practical, realistic and decisive when it comes to trading. I love facts and what I think is concrete. I have a set of standards (in my trading plan) and I follow them consistently. With rules in hand, I have no problems weighing alternatives and take rapid decisive action. I let my charts speak to me and I listen to them. I started with EurUSd and Usdjpy but now, I am trading most of the majors and the AudJpy and UsdJpy for crosses. For trade set ups, I start at the higher timeframes; daily, H4 and 1 hour. When executing and exiting trades, I will move to the lower timeframes, 30 minute.

Azeez: Could you please tell us how you apply money management?

N. Hayes: Money management is so important, next to a trading plan and psychology of trading. You see, why most traders fail when they come to the market is they rely on their emotions to make their trading decisions. With good MM, I don’t need to worry about my emotions while I am trading. I have in my trading plan how many pips I am willing to risk per trade and how many trades I have to make if I have few losses in a row etc. I cannot emphasize enough how important a trading plan is.

Do keep in mind that all big losses once began as small losses. Moreover, if you let a losing trade turn into a big loss, that’s going to have a detrimental effect on your trading capital, and once you take a couple of big losses, it’s much more difficult to trade and to gain back the money which you’ve lost. These mistakes can be easily prevented if you have a good money management.

How I determine how much money I actually make on a particular trade? Well, it depends on how much money I actually put into the trade. My usual ratio is 2:1 and 3:1 (low and high probability trades)

Azeez: I really appreciate your blog (http://www.smurfette4x.com/). What are the aims behind this blog?

N. Hayes: The aim behind my blog is to help other traders that are just entering the trading world. My goal is to share the knowledge I have gained with everyone in an attempt to make it less intimidating for people considering trading.

Azeez: Do you fancy or at least, would advise the use of trading robots?

N. Hayes: These so called "Expert advisors" have their pros and cons. I do believe that some work but again a trader needs to spend some time looking for the right one. Also, the mentality of the trader plays an important role in this. There is no such thing as earning money without doing any kind of work. Many people get themselves burned by ignoring the fact that research and testing are definitely a must before they link these Expert Advisors to their live account. Learn how these Expert Advisors work first before having your hard earned money totally at the mercy of a program. There is no doubt of the high success rates that these systems hold but while these values are very positive, it is important to realize the risk that accompanies these rates of success. These experts are programs for certain market conditions and not for difficult market conditions that could lead to serious losses. As for myself, I am currently testing an Expert Advisor which is programmed based on the Grid Trading technique and so far, I am quite happy with it (Grid Trading is a trading technique that uses a series of pending orders creating a "grid".)

Azeez: Everyone has their strengths and weaknesses, what do you think is your greatest strength and, your weakness as a trader?

N. Hayes: I think my strength is that I’m willing to put as much energy and focus into the job as I have to. My greatest weakness would be that I become a little more cautious and doubt my instincts when I have multiple losses, but on the positive side I don’t give up and work towards improving my skills no matter what.

Azeez: How many pips on average, do you make per month?

N. Hayes: I have a daily goal of 20-50 pips. Monthly average is between 500 - 1000, it really varies, depending on the market. Also, I am more of a conservative trader; I would rather wait for the market to give me a trade than jumping in just for the sake of making some pips. There are times that I don't trade for a few days, when I don't see any good, solid setups. It is fine with me. Since becoming a full time trader, I realize how much it pays to be patient and disciplined.

Azeez: What do you enjoy doing apart from trading?

N. Hayes: Traveling! My favorite destination is the USA. This is one of the reasons why I decided to be a full time trader, I can work from anywhere in the world, as long as I have my laptop with me.

Azeez: Do you have any advice for traders out there, especially female traders like you?

N. Hayes: I am not sure if I am the right person to give out any great advice here as I am still "learning" myself. This is the best part of this business, one never stops learning. There is always something new and the market doesn't pause for us. We need to keep updated and try not to fall too far behind. One reminder that I apply to myself and I would like to share with others, is that "If you are satisfied with the kind of work you're doing and why you are doing it, you will be successful.” I really believe in this. If you put your heart in it and are willing to learn as much as you possibly can, you will open up doors you can't even imagine. Never let others influence you otherwise, because if you let others define what success is for you…then it is pretty easy to stray and to lose sight of yourself. Everyone has their own dreams and goals, never forget that. Also, don't let fear get in the way. Trading is ideal for a woman. It takes time to master so one has to have patience in order to be able to succeed in this business. This is a profession that takes a lot of hard work, focus, strength (emotionally) and determination but if you have what it takes and if you are up for the challenge, you can do it!

Azeez: What are your plans for the future, as long as trading is concerned?

N. Hayes: I am described by friends as a flexible person. Not to mention a daring one. I do have plans for my future but my plans are mostly adjustable. I go with the flow. I prefer to tell you about my dreams instead, as they are more concrete and something that I am really looking forward to and working on. My dream is to be among the successful women in this line of business some day, with a good trading portfolio. My trading blog is a start, for me to share my ideas with my followers. I want to expand from here, maybe giving lessons in a subject that is related to trading. My aim is to help new traders in realizing the reality of what Forex can give them and not seeing it behind rosy glasses. In short I would like to help prevent others from making the same mistakes that I have made in the beginning of my career.

Azeez: N. Hayes, thank you very, very much for this insightful interview!

NB: In order to benefit from N. Hayes’s daily trading activities and ideas, you may want to visit her blog at: http://www.smurfette4x.com/

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Email: amustapha@fxinstructor.com

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

Nice trading tips are available at: www.ituglobalforex.com

And my past articles are also available at: www.ituglobalforex.blogspot.com

Yahoo! Messenger ID: saazalmu

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Wednesday, September 22, 2010

Mid-week Trading Update (September 22, 2010)

“Remember, it's better to have a small profit of a larger sum than a large profit of a smaller sum - in the latter case you're taking on more risk. As a rule, we don’t like risk.” – Marcus de Maria

Hello:

This is an update on some of the movements on the markets and what I’m doing about them, plus my losses and profits. The analyses are based on daily charts, looking at the Big Picture, though my entries are on a smaller timeframe. My preferred leverage is 1:100 and my position size is 0.01 lots for each $1000. My maximum drawdown in a week is 3% (worst case scenario). I use the Price Behavior rules for strategic decisions and customized indicators for tactical entries. I open primary positions without predetermined exit target in mind, riding the trend for as long as it continues. The value of patience will forever be emphasized. As long as I stick to my rules and keep my risk low, I’m immune to fear.

Whenever we’re trading we got to use the mental control tools that we’ve learned to interrupt the old contrary thinking pattern as it begins and remain focused on what matters most in the trade. What matters most at the moment of trading is to follow our plan and our rules and allow the market to prove us wrong. In our natural state, we have the ability to see the market just as it is. No thoughts come up to remind us of the past or attempt to predict the future.


AUDUSD
Primary trend: Bullish
The current bullish momentum is highly significant. However it may be unwise to go long at the movement, unless you were able to catch the trend earlier. I put a Sell Limit order which is now filled and currently negative. There’s a strong resistance at 0.9600.
Order: Sell Limit
Entry date: September 17, 2010
Entry price: 0.9500
Initial stop: 0.9650
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Open
Profit/loss: -50 pips
Percentage growth: N/A


NZDUSD
Primary trend: Bullish
It looks like there’s still much room for the bulls on this pair. However, it’s still going to an area of strong resistance. I’m still expecting a good ‘sell off’’ around 0.7400. Otherwise the bullish trend may continue.
Order: Sell Limit
Entry date: September 10, 2010
Entry price: 0.7400
Initial stop: 0.7550
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: N/A


EURCAD
Primary trend: Bullish
This cross is breaking one resistance after the other. You see, whenever a trend starts, we don’t know where it’ll end. Once one is able to identify a good turning point, the next thing is to enjoy a good ride. As a beginner, if some ‘sheer luck’ brings you some winners in a row, you shouldn’t be confident enough to ask your granny to sell her house so that the proceeds can be used to fund a live account. You need to be sure that you can survive a losing streak as well. Who knows if the losing streak would start after you’ve started trading your granny’s money?
Order: Buy Limit
Entry date: September 9, 2010
Entry price: 1.3100
Initial stop: 1.2950
Current stop: 1.3445
Exit price: N/A
Exit date: N/A
Status: Open
Profit/loss: 506 pips
Percentage growth: 5.0%

EURAUD
Primary trend: Bearish
Several bullish attempts have failed. The EUR is still a kind of weak against the AUD. The market hasn’t been able to turn to start a significant rally. None of my entry conditions have been met at the present. If they’re met, I’ll just put a pending order in place.
Order: Buy Limit
Entry date: September 9, 2010
Entry price: 1.3800
Initial stop: 1.3650
Current stop: 1.3871
Exit price: 1.3871
Exit date: September 17, 2010
Status: Closed
Profit/loss: 68 pips
Percentage growth: 0.68%

EURNZD
Primary trend: Bullish
This instrument is supposed to be in correlation with the EURNZD but the matter isn’t so this time around. The NZD is too weak to withstand the EUR’s strength. The bias has turned bullish, and this may just be the beginning. The current price is quoted above the SMA 20 and the –DMI has been kept below the +DMI while the ADX 20 line is journeying towards the 30 level. My pending order wasn’t reached before the bullish journey began. So ultimately it could be cancelled.
Order: Buy Limit
Entry date: September 13, 2010
Entry price: 0.7400
Initial stop: 0.7250
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: N/A

AUDJPY
Primary trend: Bullish
In the present bullish momentum, there could be a temporary pullback or trend reversal. Resistance 81.00 has been broken, but another impediment to the bulls stands at 82.00 level. Whenever you get a trading signal from your setups, you simple need to enter your orders. There’s no need for you to fear anything or complain that you’re too old or too young or don’t know enough or you’ve a toothache. You just need to enter.
Order: Sell Limit
Entry date: September 15, 2010
Entry price: 81.00
Initial stop: 82.50
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Open
Profit/loss: -23
Percentage growth: -0.2%


Conclusion: Of course, other strategies are being used by me and some of them have been closed with profits (these other strategies will be secretly enjoyed by the subscribers to my trading signals. One is being used by them and others will soon follow). If you’re a Forex trader, I congratulate you. You’ve made a very good trading choice. There are many advantages currency trading has over stocks. Besides, unlike stocks, currencies rarely go to zero. Although companies easily can go bankrupt, countries cannot. There will be times when a currency is devalued, but even in cases where there is a sharp slide, the currency's value never reaches zero. It's not impossible, but what it would take for this to happen is too scary to even consider.

I’m concluding this article with a quote from a famous sportsman:





Your questions and opinions are highly welcome.


Thank you.

With best regards,

Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach



Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

Nice trading tips are available at: www.ituglobalforex.com
And my past articles are also available at: www.ituglobalforex.blogspot.com

Yahoo! Messenger ID: saazalmu

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Sunday, September 19, 2010

Women In Forex

"I learned that good judgment comes from experience and that experience grows out of mistakes.”--- Omar Bradely

Hello:

Having actively traded the Forex markets for years, I have learned that predicting what the market will do, particularly in the short-term, is virtually impossible. We can certainly have an idea of what might occur, however, we can never be sure. Normally good economic data should drive the markets up and bad economic data should drive them down. But sometimes good numbers push down the markets; bad numbers but the markets are up. So when in doubt about what the markets would do, don’t rely on any fundamental data or expert opinion, but on your own analyses and trading setups. Probability is the key along with systems that help to exploit this probability.

Here are my trading results last week:

AUDUSD
Order: Sell
Status: Closed
Profit/Loss: -150 pips

EURCAD
Order: Buy
Status: Open
Profit/Loss: 343 pips

EURAUD
Order: Buy
Status: Closed


AUDJPY
Order: Sell
Status: Open
Profit/Loss: 66 pips

The limit orders on EURNZD and NZDUSD are still pending. Either of them would later be cancelled or filled (depending whether or not the predetermined levels are reached).

GBPJPY Strategy
Order: Sell
Status: Closed
Profit/Loss: 135 pips

Order: Buy
Status: Closed
Profit/Loss: 135 pips

Signals from the GBPJPY strategy are secretly sent to subscribers to my trading signals. Its trading results; past and future, would soon be displayed while the strategy itself is explained in one of my future articles. Besides, other trading instruments and techniques are being privately tested and the one whose viability on the markets has been confirmed would be added.

Women In Forex
It’s well-known that the market isn’t gender specific. It has nobody in mind to favor or disfavor - it just moves impartially and rewards those who do the right things while trading. It’s so interesting to see women making decisions to start trading, whether on full-time or part-time basis. As far as female traders are concerned, there’s an important fact on www.fxstreet.com that goes thus:
The CEO of a retail Forex trading training course says his women have three qualities which make them better traders than men:
i) women's stronger sense of risk aversion
ii) women's increased patience, which lets them follow through on trading plans better than men
iii) and women's tendency to really learn thoroughly before trading, while men tend to learn something partially and immediately.

I completely agree with these points, having some women as my trainees as well. There are many intriguing trading hints to be learned from women. I personally like to know what women think about trading. The article on Friday will feature an insightful interview with a female trader. I believe certain people would be saved from fatal trading mistakes by the interview. This article is especially prepared with women in mind; both new and advanced traders. Please watch out!

I’ll conclude with a quote from a female trader:

“I must admit that women traders are better than men because they do not have egos. They can change their minds quickly if they are wrong, and are patient if they are right.” – Carol Harmer

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach

Yahoo! Messenger ID: saazalmu

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

Nice trading tips are available at: www.ituglobalforex.com
And my past articles are also available at: www.ituglobalforex.blogspot.com


NB: There is risk of loss in trading, but it is possible to be a successful trader.

Thursday, September 16, 2010

Direction Discipline Risk Leverage Equation - DDRL®

A PLAIN TRADING MIRROR


“By keeping your losses small, relative to your account, a margin call will be very unlikely.” – Robert Deel

Hello:

You need to stop fooling yourself and be honest in your trading activities, learn from your past mistakes and never repeat them again. Otherwise there’s not going to be any noteworthy progress. The DDRL equation from Robert Deel is one easy tool you can use to gauge the effectiveness of your trading strategies. No matter the type of strategy you’re using – whether it’s the one that shows results in months or the one showing results in weeks, you’ll need to determine whether it’s a strategy that can survive all market conditions. Whenever I backtest a strategy I tend to focus on the areas where the strategy would’ve generated poor signals. It’s unthinkable for me to deceive myself by seeing only what I’d like to see when bactesting a system. I like to document my trading results so that I can know whether the strategy is worthwhile or worthless.

There are many factors that need to be taken into consideration when developing a trading system. As time goes on, you may need to tweak or fine-tune a strategy in order to get better results. For example, you can be correct on the market direction and trade selection and still lose money because your timing (entry) was wrong. And incidentally when it comes to stops, never think in terms of ‘’if’’ your stop gets taken out, think in terms of ‘’when’’ your stop gets taken out – what will the loss be? Those who’re consistently profitable without using stops strictly keep their risk very low and know exactly when and where to get out of the market – never violating their rules.

Let’s see how the Direction Discipline Risk Leverage Equation (DDRL®) works:

1. Traders X has ten wins and six losses.
2. Trader X’s average dollar gain was $900.
3. Trader X’s average dollar loss was $400.
4. Traders X’s gains were $9000.
5. Trader X’s losses were $2400.

Plugging those figures into the equation gives us the following:

10 Wins X $900 Average $ Gain $ = 9000 Gains
6 Losses X $400 Average $ Loss $ = 2400 Losses
9000/2400 = 3.75 = DDRL SCORE

How can you use the formula above to measure your trading skill? According to Robert Deel, in most cases an excellent DDRL score will be from +2 to +2.5. A score greater than +2.5 reveals a high degree of trading skill. Over time a score greater than 3.0 will be a rare occurrence. You should strive to achieve at least +1.4 to +2.0.

We’re grateful to the author of DDRL®.


In conclusion to this article, I put a quote from Sam Evans below. It’s all about the reality of the acceptance of the factors that are beyond our control (as it’s also true in trading):

“Here, just like many times before, I had a student who felt uncomfortable about the fact that there is never any guarantee of a trade working. He was looking for any tell tale signs which would have warned him in advance if the position had a lower chance of turning into a winner. I asked him what was really behind his question and to his credit, he said that he was searching for a way to prevent a loss. I admired his honesty and only when a trader is completely honest with others and more importantly, with themselves, can they really look for success in the markets. Making this crossover is about acceptance and realizing that trading of any kind will never be a process of absolutes. The sooner we can accept that nobody out there really knows what the market is going to do next, the sooner we can relieve the pressure to be right. Ironically, it is the need to be right which often costs the novice trader dearly, as they typically do not follow any kind of plan, jumping into the market and changing the parameters of the playing field midway through, all in the quest to be right. Let go and accept that this is an impossibly futile effort from the very start. Trading is just like life. We live our lives day-to-day and never really know what is coming next. Sometimes unexpected good things happen, while other times something bad occurs right out of the blue. Often we live out our days according to routine and things mostly work out as expected, but we all know that surprises of some kind are always around the corner. This knowledge doesn't stop us from living our lives though, does it? Trading my friends is no different to life at all – accept the risks, understand the rewards and just take each day as it comes.”

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach

Senior Analyst
FX Instructor, LLC
Email: amustapha@fxinstructor.com

Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:
www.fxinstructor.com/blog/author/amustapha
www.fxinstructor.com/blog


Nice trading tips are available at: www.ituglobalforex.com
And my past articles are also available at: www.ituglobalforex.blogspot.com

Yahoo! Messenger ID: saazalmu


NB: There is risk of loss in trading, but it is possible to be a successful trader.

Weekly Trading Update (September 16, 2010)

“Remember, when it comes to trading, we don’t know that we are right until we actually are.” – Eric Wadell

Hello:

This is an update on some of the movements on the markets and what I’m doing about them, plus my losses and profits. The analyses are based on daily charts, looking at the Big Picture, though my entries are on a smaller timeframe. My preferred leverage is 1:100 and my position size is 0.01 lots for each $1000. My maximum drawdown in a week is 3% (worst case scenario). I use the Price Behavior rules for strategic decisions and customized indicators for tactical entries. I open primary positions without predetermined exit target in mind, riding the trend for as long as it continues. The value of patience will forever be emphasized. As long as I stick to our rules and keep our risk low, I’m immune to fear.

I’d prefer to adopt a Tharplike mindset for my trading, for the less I know about something, the more room there is for creativity. I acknowledge the fact that the longer it takes for my order to get filled, the higher or lower the entry price, and that’s good for my positions. A higher or lower entry delivers larger profit. This idea is good in any market direction. So in any trend, I’d like to trade with limit orders.

AUDUSD
Primary trend: Bullish
The current bullish momentum is highly significant. However it may be unwise to go long at the movement, unless you were able to catch the trend earlier. My Sell Limit order was a failure, and a reversal is imminent on this pair.
Order: Sell Limit
Entry date: September 6, 2010
Entry price: 0.9310
Initial stop: 0.9460
Current stop: N/A
Exit price: 0.9460
Exit date: September 14, 2010
Status: Closed
Profit/loss: -150 pips
Percentage growth: -1.5%


NZDUSD
Primary trend: Bullish
In the context of an uptrend, this pair has already entered an area of strong resistance. I’m expecting a good ‘sell off’’ around 0.7400. Otherwise the bullish trend may continue.
Order: Sell Limit
Entry date: September 10, 2010
Entry price: 0.7400
Initial stop: 0.7550
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: N/A


EURCAD
Primary trend: Bullish
After hitting a strong support at 1.3100, there’s been at least a remarkable bullish correction (which could even be the beginning of a serious bullish trend). Whatever the market is doing, it moves without considering what or who you are or the circumstances surrounding you. Trading is the only profession in the world in which your success doesn’t depend on who you dad is or who your friends are.
Order: Buy Limit
Entry date: September 9, 2010
Entry price: 1.3100
Initial stop: 1.2950
Current stop: 1.3285
Exit price: N/A
Exit date: N/A
Status: Open
Profit/loss: 256 pips
Percentage growth: 2.56%

EURAUD
Primary trend: Bearish
Several bullish attempts have failed. The EUR is too weak against the AUD. But at the present, it seems the market would finally turn and start a rally. The price action is currently supporting this view, but time would tell whether the bulls have enough stamina to sustain a northward journey. The price level 1.3656 looks like a strong support, and if the price can’t go back there, then a bullish journey has just begun.
Order: Buy Limit
Entry date: September 9, 2010
Entry price: 1.3800
Initial stop: 1.3650
Current stop: 1.3800
Exit price: N/A
Exit date: N/A
Status: Open
Profit/loss: 95pips
Percentage growth: 0.95%


EURNZD
Primary trend: Bearish
The current bias is still bearish, though it seems there’s not going be further strong bearish journey. The price is still definitely quoted below the SMA and the ADX –DI is still clearly over +DI. With time, the next trend; whether continuation or reversal, would be clearer. I’m on a Buy Limit order.
Order: Buy Limit
Entry date: September 13, 2010
Entry price: 0.7400
Initial stop: 0.7250
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: N/A

AUDJPY
Primary trend: Bearish
All instruments that have the JPY as their counter-currency experienced a new lease of strength against their Yen counterpart yesterday. Fundamental analysts would tell you the reason for this. In most cases if prices move madly far like this, a retracement is likely to occur afterwards. I have a Sell Limit order. When the price reaches the level I’ve set – the market would play itself out. It doesn’t matter whether I’m present or not. There’s no need here to sit and wait in front of your PC 24/5. I once believed I needed to trade everyday and everytime. But ultimately there was nothing to show for that except drawdowns, tainted socks, bad teeth and asthma.
Order: Sell Limit
Entry date: September 15, 2010
Entry price: 81.00
Initial stop: 82.50
Current stop: N/A
Exit price: N/A
Exit date: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: N/A


Conclusion: Whatever the trading strategy you’ve adopted, you’ll just need to cope with occasional losses in a row. How should you view your trading results then, whether positive or negative? Mark Jurik who has developed profitable counter-trend strategies gives an exemplary answer below (Note that both trend-following and counter-trend strategies aren’t perfect):

“Because the strategies I develop trade tight reversals, the only thing that can go wrong is when the market takes off on a long trend and I’m on the wrong side of the trade. Stop loss limits help, but since you don’t know when the trend will end, my strategies try to get back in and keep losing until the trend ends. But that’s part of the statistical win-loss behavior one need to accept right up front. Bad days will happen. But I believe in the statistics that says my strategy will recover. I don’t get too upset. Even professional poker players lose a game now and then. The worst thing to do is over-react and stop trading after just one bad day.”



Your questions and opinions are highly welcome.


Thank you.

With best regards,

Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach

Yahoo! Messenger ID: saazalmu

NB: There is risk of loss in trading, but it is possible to be a successful trader.
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