Wednesday, December 8, 2010

Weekly Trading Update (December 10, 2010)

“If you’re playing for emotional satisfaction, you’re bound to lose, because what feels good is often the wrong thing to do.” - William Eckhardt


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. My preferred leverage is 1:100 and my position size is 0.01 lots for each $1000. My maximum drawdown in a week is 2% (worst case scenario). I use the Price Behavior rules for strategic decisions and customized indicators and a shorter timeframe for tactical entries. I believe that a ‘buy’ signal that fails is a ‘sell’ signal; and a ‘sell’ signal that fails is a ‘buy’ signal. 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.

Mainly because my tangible stops do the work for me, I never use a “mental stop.” My stop prices are real, and if something is not going my way, I’ll simply be taken out. The markets offer us a gingerbread house of potential goodies. Break off some of the cake. Stuff yourself with as much as you want — and there is much you do want, so you step up to the gingerbread offering of the markets. You can probably make a list of dozens, if not hundreds, of things you want, and the gingerbread house with all its good appearance holds out the promise of satisfying your quest for the material things of this world. But within that gingerbread house exists something evil — individuals who want to satisfy their own desires at your expense.


Primary trend: Bearish

The AUDUSD experienced some moderate bullish run last week – in the context of a bear market. My long trade gave me a profit of 107 pips before I went short on a reversal. The trade is still on

Order: Sell Limit

Entry date: December 8, 2010

Entry price: 0.9810

Initial stop: 0.9910

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: -62 pips

Percentage growth: 0.6%


Primary trend: Bearish

Trying to take advantage of a possible upward break on this pair, I managed to break even on my long trade. The sellers have now dominated the market, and unless there’s a significant gain in the USD, the present bias would continue. Determined traders would analyze their mistakes and continue making progress, whereas feeble-minded traders would admit defeat and give up trading.

Order: Sell limit

Entry date: December 1, 2010

Entry price: 0.7505

Initial stop: 0.7405

Current stop: 0.7505

Exit price: 0.7505

Exit date: December 8, 2010

Status: Closed

Profit/loss: 0 pips

Percentage growth: 0 (breakeven)


Primary trend: Bearish

In the present volatile bear market condition, I got a ‘sell’ signal when my entry criteria were met. The trade is still on.

Order: Buy Limit

Entry date: December 8, 2010

Entry price: 1.3388

Initial stop: 1.3488

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: -63 pips

Percentage growth: 0.6%


Primary trend: Bearish

Buyers look like toothless lions on this market, because the price is just trending downward. Any bullish attempts would normally trap some traders to go long: only to see the price fall again. Slugging it out would make you get conversant with the market and take necessary actions at the necessary times. So often, people give up just as they are about to become consistently profitable. I’ve a ‘sell’ trade on this cross at the moment.

Order: Sell

Entry date: November 30, 2010

Entry price: 1.3570

Initial stop: 1.3670

Current stop: 1.3570

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: 76 pips

Percentage growth: 0.7%


Primary trend: Bearish

There appears to be a recalcitrant support at 1.7400. However, the ranging price movement is still below the SMA 20. The ADX 20 level shows that the market volatility is becoming low, unless there’s a serious breakout, more probably to the upside. +DI is almost crossing its –DI counterpart to the upside (but not significantly). I’ve set a limit order that’s designed to buy at 1.7580. If there’s an upward movement without the price first retracing to my preferred entry level, then the order would be eventually cancelled.

Order: Buy Limit

Entry date: December 8, 2010

Entry price: 1.7580

Initial stop: 1.7480

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Pending

Profit/loss: 0

Percentage growth: N/A


Primary trend: Bullish

Although the primary trend on this instrument remains bullish, it has been moving sideways for many days. I decided to go long and the trade is still on. No-one knows what the market would do next, but trading rules must be respected and losses mustn’t be allowed to run. If I could only take all my stop losses according to plan, I would really make it. I only wanted to do things which make sense in the long run.

Order: Buy

Entry date: December 1, 2010

Entry price: 81.67

Initial stop: 80.67

Current stop: 81.67

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: 96 pips

Percentage growth: 0.9%

Conclusion: In one of my past articles titled “Does The Forex Trading Work?’’ I mentioned someone who was talking as if he was the one controlling the markets, because he was given some 18-hour training by a get-rich-quick trading seminar within 3 days. After he crashed, he swore he’d never trade again and would never advise anyone to trade Forex. He believes Forex is only gambling, and traders are bound to lose (except a privileged few). I saw him recently, discovering he still holds onto his belief. He says: ‘Who’s a broker and what’s their function? You’d send your money to someone outside your country, and he’d send you some candles to fight against. What’s the meaning of that?” He’s invested in some kind of online investments that guarantee him about 30% - 100% per month. Where would those investments get their returns from? After we parted ways, I began to think how many more people would be dissuaded by him. He’s posing as a professional; but in fact, he’s a defeated novice. There are many novices out there who’ve been defeated by the markets, and who’ve made it a ‘calling’ to discourage people from trading.

Something counterfeit must surely has an original. The secrets of the so-called privileged few are what I try to reveal in my articles. More about this issue would be discussed next Friday.

The quotes below end this article:

1. Let's face it, results are the name of the game and if you're not getting the results in your trading that you want, then you must begin to change something in your behavior… It has been my experience that major losses and extreme draw downs are not due for the most part to a lack of knowledge, but to a lack of effective planning and a lack of follow-through with rules and commitments. How many times have you found yourself doing well, only to sabotage your efforts by chasing trades, prematurely exiting positions, moving stops, putting on more size than is appropriate or any other rule violation? When you are in the throws of a trade, this is when the majority of emotional distractions play havoc on your execution.” – Dr. Woody Johnson

2. “If you do want to get into it at all you have to be prepared and work hard and work smart. Also if you do any courses you have to be very careful about which ones you choose and which people you listen to. There are some very high quality honest educators out there who want you to be successful but there are many other people out there who think they can make a quick buck by pretending to be successful themselves and promising to teach you their ‘secret’ insights. I think the investment and trading education market should be properly regulated.” Lex Van Dam

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


Get my Forex trading signals at:

And my past articles are also available at:

Yahoo! Messenger ID: saazalmu

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

No comments:

Post a Comment

The default minimum deposit amounts are: $100 for Micro accounts, $500 for Pro-Managed accounts, and $2,000 for Pro accounts However, an optional "suggested deposit amount" parameter may be used.