“Please note as well that you need a trend. No trend, no gain. When the (market) doesn’t move you cannot win anything. Trendless periods are therefore no winning periods. And believe me, there are… trendless periods. You therefore need endurance and patience.” --- Luis Lorenzo (brackets mine)
Hello:
The more difficult the markets are, the more creatively you’ve to trade. The best traders know that becoming a consistently profitable comes from having a plan and the discipline to stick with that plan. Becoming successful in trading profession can’t be fast-tracked. There’s no golden goose strategy to becoming rich overnight. If you find yourself not happy with making small profits all the time then you can quickly run into deep waters when your greed kicks in. The lesson is that patience in trading is the same as in business. Just consider the time it takes to build a company, to launch a new product, to acquire a large and loyal clientele, to build brand recognition. Business takes time and so does trading. There are no shortcuts.
As regards my trading results last week, my short trade on the USDCHF made a loss of 40 pips while the short trade on the EURUSD made a profit of 120 pips. The GBPJPY long trades are still open and negative, whereas the same logic applied to the USDCAD made a net profit of 320 pips. On my long-term strategy, the limit orders on the EURAUD and AUDJPY are still pending while the open trade on the EURCAD is currently having a profit of 1201 pips.
My article on Friday would highlight MT5 and its new features in contrast with MT4. On October 29, 2010, you’ll get specific timely suggestions for focusing on your trading goals and attaining them. My article on November 5, 2010 would be discussing the value of honesty as career persons in the trading world. By the middle of November the logic behind the EURUSD-USDCHF strategy would be expatiated on while its past results are being displayed. My subscribers are now enjoying trading signals on the EURUSD-USDCHF strategy as well. However while they’re being shown the trading orders that can potentially make them survive the markets over time, they can’t be given the discipline to actually follow the trading rules. They’re responsible for that, and if they could follow the extremely simple rules, they’d win.
No Trends, No Gains
Whenever a trading position is opened, there must be a market movement before you can realize any profits. The movement can either be against you or in your favor, and thus you need to control your account with nice risk management techniques, not letting the market control your account for you. This is what gives credence to the fact that an appropriate position sizing matters more than your entry points.
Events are the things that move the markets. For example, it’s known that the USD tends to gain a measurable amount of strength around Christmas season. I guess you know the reason why this is so. Strong trends invariably grow out of the market equilibrium. The price can move constantly up or down within a range and a strong breakout can be significant. Whether price moves seriously up or down, it can be an advantage to the seasoned trader since it helps to optimize the trader’s accuracy. A trending market adds to the trader’s possibility of consistent profits because nice trading opportunities would be created, reducing the risk of loss.
Nevertheless, when the market is in equilibrium mode, trading can be difficult. If you don’t have an effective range trading system, then you’d do yourself a favor to stay out of the market during that kind of period. For traders who know how to navigate their positions in an equilibrium market, profits would likely be small and the spreads paid could be too much. The sideways market requires serious effort to be profitable. The markets that are particularly difficult require approaches that are particularly creative. Always view your money management plans in relation to the market trends. If you suffer occasional losses, as all professional traders would, the losses can be recovered over a period of time.
One of Dr. Van Tharp’s quotes below concludes this article:
“Making money has nothing to do with predicting what the markets are going to do. It has everything to do with making sure that when you are right you make a lot more money than when you are wrong. Last night at my talk we played a game in which people were only right 20% of the time, but almost everyone made money. Why? Because they made 10 times their risk when they were right and only lost what they risked when they were wrong. And if your total risk per position is small enough to tolerate long losing streaks, you can capitalize on the long term expectancy of the market.”
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.
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