ITU GLOBAL MARKET REVIEWS

Yahoo! Messenger ID: saazalmu

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:

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

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Weekly Trading Update (December 23, 2011)

“Quite often it's what you choose to not do that determines the success of your trading… The winning trader is the trader who knows how to cope with uncertainty… Coping with the uncertainty of the markets is vital for enduring success in the markets. The more you can accept uncertainty and find some way to deal with it, the more profits you'll realize… Although the markets are uncertain, it doesn't mean that you won't profit if you control your risk and trade with sound methods. Think of the big picture. You may not know the outcome on any one trade, but across a series of trades, you'll come out profitable if you use trading methods that put the odds in your favor.” – Joe Ross

Hello:

When new traders enter the markets many believe that they miss out on great trading opportunities. New traders play these mind games with themselves all the time. If they feel that they’ve missed an early opportunity, then they should study the market, so that they won’t missed the same opportunity the next time it happens. It could be said that precast belief can plunge the trader into ruin, or as Jochen Steffens explains it, if the trader’s bullish or bearish or leaning any other way, she/he can’t observe the market objectively. The trader sees what she/he wants to see and not really what happens. If the trader trades discretionally according to her/his beliefs, she/he is successful only as long as the market goes in the direction aligning with those beliefs. The market isn’t interested in the trader’s beliefs and markets change from time to time – sometimes fast and furiously. As a trader you’ve to be unbiased, as difficult is it is. And to be honest: Even though we know that we mustn’t have any precast beliefs, they sneak into the subconscious. Especially during longer bull or bear markets when even the most neutral trader develops expectations – the often biased media coverage is simply too powerful. That’s why the trader has to constantly ask themselves if they’re still unbiased or if they’re already forming an expectation.

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bearish

This pair, in a context of a downtrend broke a major resistance at 0.1200. But further bullish move was rejected soon after that, and the price retraced seriously. It’s making another attempt to go up; thereby creating another selling opportunity for short-term sellers.

NZDUSD

Primary trend: Bearish

Here too, a bullish outbreak was soon stalled, resulted in a bearish retracement and created a tricky situation for traders. However, a new southward move may be resumed if subsequent economic data show a negative performance.

AUDNZD

Primary trend: Bullish

The price situation of this instrument is difficult for buyers – though the major trend remains bullish. The SMA 50 remains above the SMA 200, but the price has broken the latter to the downside. The RSI 14 has been situated constantly below the level 50 – experiencing difficulty in breaking that level to the upside. The Stochastic 14,3,5 didn’t reach the overbought position and is going to the oversold region. It may be wise to stay out of this market right now.

EURCAD

Primary trend: Bearish

The outlook on this market remains bearish. One would do well to find suitable shorting price levels and periods. This kind of scenarios doesn’t currently exist in all other markets; for absolute prices don’t mean a thing and different markets have different volatility.

EURNZD

Primary trend: Bearish

Sell and sell short! Yes, just like the outlook on the EURCAD. The SMA 50 is still below the SMA 200. The ADX 20 is above level 30 and pointing upwards, meaning that the bearish move could just be starting (it still has much room to run). -DI is above +DI, indicating a domination of the bears. I’d assume only a bearish position here.

GBPCHF

Primary trend: Bullish

One should’ve gotten a good result here if one bought in dips. The price seems to be stalling around major supply zones right now, yet one would do well to buy the dips. What more? A safe position sizing method would even be salubrious as one’s position reacts to the unknown.

Conclusion: Though future long-term price value may be estimated by fundamental analysis, short-term future price value depends mostly on the perception of those people watching closely the most recent price action. That’s, people just having their orders filled or wanting to put one in. Consensus and perception of market value, after all, originate from comparing things to each other. And previous prices are the closest thing to compare price with, both in time and in place (on a chart).

Let me conclude this article with the quotes below:

“The insiders of financial markets know the inner working of the financial system and can use this knowledge for their own personal benefit, but at the expense of the society at large.” - Richard Olsen

“When our trades lose money, whatever our logic, we can be sure we were not alone. But we can equally be sure that we were in the minority. Had we been in the majority the market would have performed as anticipated.” - Joseph Trevisani

“The biggest thing that got me from a losing trader to a winning trader was the realization that I did not have to know the future to be successful. Many new traders think that trading is all about knowing what is coming next, but of course no one can really predict the future. So for me realizing that this business is all about playing the odds rather than knowing the future was the single biggest epiphany that got me over the hump.” - Derek Frey

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

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:

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

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

Yahoo! Messenger ID: saazalmu

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Saturday, December 17, 2011

Testimonies from My Subscribers, Trainees, and Readers

PERMANENT SUCCESS IS POSSIBLE IN THE MARKETS

“If there is any illusion or subjective information in your quest for truth, truth will never be found.” – Sam Seiden

“Control is the essence of good trading. You can’t control the markets, but you can control your actions… Therefore, the first thing a trader needs to do is learn some working methods to make them work, not make money. Failing to do this may result in some lucky wins in the beginning, but the market takes it all back and much more in the end.” - Jea Yu

Hello:

Lately I’ve been thinking how grateful I am that I had the privilege to become a trader. I don’t want to turn away for anything! When winds of change whip thru our trading career, we need to have a deeply rooted principled mindset. Below are some testimonies from my subscribers, trainees and readers. These show how some have benefited from my trading-related activities online. Only 10 testimonies are shown here because of limited time and space.

1. “Azeez, this is what I have been waiting for. I think... Oh my my my! I have just read it and set up my charts. I have such peace that it is going to be the best thing that ever happened to me. Do you know that I have already set up my financial goals for the next 5 years, but I was not sure how that was going to unfold. This is the vehicle that I can see taking me there slowly but surely. I want to say thank you so much and only God knows to what extent you touch lives. You yourself do not know. Please keep those articles coming. I always look forward to getting them. I have every mail you have sent me since I joined. They are such a great archive. Have a wonderful day my brother.” – S. M.

2. “My Master, I made over 1600 pips this week – thus growing my capital by 16% this week.” – O. S.

3. “Wow! Great trade! Regards.” – E. S.

4. “Wow! These are beautiful results!” – K. W.

5. “Hello Azeez. Yes I do like the Effective Swing Trading Strategy gift very much. I have been demo trading it and it has been quite successful. I also liked the “Another way of using the Williams %R Strategy” you sent previously but I prefer the Swing Trading more because I don't have to sit in front of my computer quite so much! Yes I have been watching with interest the USD/CAD Hedging and Gap Trading accounts… Getting back to the Swing Trading Strategy, prior to making contact with you I had been following someone else’s methods which I think are brilliant but without actually attending their courses. I found it very difficult to physically identify the Supply and Demand levels which would have enabled me to buy at wholesale and sell at retail prices, whereas your Swing Trading System does just exactly that. Using the Williams %R 80/20 makes it much easier for me to identify the real pullbacks as against the fake ones which would only give me false entries. So in summary, Sir, I am very, very happy with the material and articles you send to me, in fact I feel blessed and thankful that I discovered you. Many thanks and kind regards.” – C. W.

6. “Azeez, may the good Lord bless and keep you. I really appreciate all the help that comes my way via the emails, they are so precious and I hang onto them for inspiration... And this new strategy, this is me, I have already started using it and I can see how it is going to change my life. I am really a swing trader type. It resonates so well with me. Thank you again and greet all yours for us.” – A. M.

7. “I’ll forever thank you for giving me the Sure-fire strategy and the training I received. It has been working well for me since I started using it a long time ago. As a graduate living in a country where unemployment is a serious problem, I deeply understand the benefit of successful trading. I now live in a decent flat, and I’m planning to open my personal office very soon, where I’d be teaching people the trading secrets I know. I believe that the use of very small position sizes is critical to survival.” – E. R.

8. “I was fortunate that I did not start my Forex experience from a wrong place. I started with a great emphasis on risk management, and I am happy that I made rapid progress. My monthly salary is too small to support me and my 3 children, but the income I obtain from part-time Forex activities has been a good supplement for me.” – S.C.

9. “Hi. I just finished reading “Developing the Right Attitude towards Losses - Part 3.” I found it very informative and encouraging. I look forward to reading your coming articles.” – S. W.

10. “Reading your recent article "Monthly Market Review (August 2011)." I realized that I’m in the correct path to successful trading for a living! Much I’m learning and much I have to learn yet! Actually I’m managing to make more profits trading other instruments than the popular ones! I think in my case, popular crosses bring much information and correlations that make me confused sometimes. So I decided to trade them; with good results! Thanks Mr. Mustapha and hope you’re fine!” – E. V.

Permanent Success Is Possible in the Markets

Great traders don’t see the uncertainty before them as an obstacle, but rather as an opportunity. You can’t stop the storm in the markets, but you can hold your ground.

There’s no uncertainty so dreadful, no challenge too great, no obstacle so insurmountable that you can’t carry yourself through it. Just keep everything simple. Those who think the secret lies in a complicated trading system alone may get a new trading system each year, but they may see that their quest for permanent success in the markets can prove fruitless.

We mayn’t know how to program an EA (something that mayn’t matter). But we must take care not to forget successful trading principles. Some traders tried to combining a good strategy with big lot sizes – but they found out that doesn’t work! Those who use high risk are looking for shortcuts to great riches. Shortcuts can be dangerous. Of course, such action isn’t acceptable to those who take the safety of their portfolios as a priority. High risk takers may achieve momentary happiness, whereas the peace of mind that risk management offers is a benefit that’s lasting. There’s an underlying peace that’ll withstand whatever the markets send to us. Risk managers know that using risk control principles always brings benefit. It’s generally better to safeguard one’s account with right position sizing than to remedy a big drawdown. Many a trader’s experience speaks to the foolproof truth of this concept.

Successful trading rules stand the test of time. I observe those who’ve been in trading and benefited by sound trading rules over decades. They stuck with it, while others faltered along the way. They’ve faced some trials and storm in the markets, but in those times, sound, safety rules helped them stay secure on their trading foundations. Successful trading rules have a way of allowing traders to look at hard circumstances and still anticipate a positive result. Dr. Van K. Tharp is an example of someone who’s maintained his fortitude and serenity in the markets, in spite of seemingly impossible circumstances. We want something that’ll stand the test of time! We’re not interested in the new and innovative rules that can’t bring permanent triumph in the markets; we want what’s proven to work. We want to be the best trader we can be, and we want other traders to be like that too.

Hope is good for us, and it’s something we all need. Likely you’ve faced times when you found yourself striving to put the most positive spin possible on a bad circumstance, or looking for the best outcome in a situation. That’s not to say we should be misguided. We don’t look at a circumstance and call it something it’s not. Rather, we want to look reality in the face and still keep optimistic perspective. Correct trading mindset has a way of allowing traders to look at a hard circumstance and still anticipate a positive result.

One can be a trader without being a permanent victor. But we want permanent victory! That’s the best, noblest aim. As we study successful trading rules and meditate on their meaning and application to our trading activities, we come to understand the markets better. The application of these rules isn’t just for hedge funds managers, institutional traders, signals strategists, and analysts. It’s for anyone who wants to enjoy permanent success in the markets and be a testimony to others. My articles are produced to help you develop your fortitude, and help you keep the strength you need to stand firm when the storms come your way in trading.

This article is concluded with quotes from Boris Schlossberg:

1. “Somehow in all other areas of our life we accept the fact that failure is just a normal part of the process. When it comes to trading however, we expect nothing but perfection. The reason is money. As human beings we are more than willing to sacrifice time and labor in our pursuit of creativity because we do not assign any clear monetary value to it. But the moment we lose a few pips on some new strategy we are ready to fold up out tent and go home. That’s a very big mistake. Most traders never get beyond the novice stage, not because they are not smart enough to figure out the market but because they are afraid to lose money. Dismayed and dispirited they quit before they ever get a chance to learn how to play the game.”

2. “Giving yourself the freedom to fail will ultimately put you on a path to success. You stop being afraid of the market and start taking the trades that you want. Paradoxically, since you know that this money “doesn’t count” you are actually much quicker to take a loss.”

NB: Please watch out for my coming articles with these titles: ‘A Trader’s Trick Entry Technique,’ ‘Making Money out of Losses – A Blessing in Disguise,’ ‘Achieve a Better Hit Rate with Gap Trading (Using the Logic Yourself),’ ‘Play the Markets Victoriously with Nano-cent Accounts,’ ‘Why It’s Difficult to Do the Right Things in the Markets,’ ‘How to Identify a Sideways Market – Be Safe!’ ‘A Negative Expectancy System – Pushing Against the Wind?’ ‘Trading Signals,’ ‘An Intraday Moves Catcher – A Wealth Generating System,’ ‘Unlock the Power of Everlasting Triumph in the Markets (Parts 1 - 12),’ ‘How to Handle Uncertainties in the Markets,’ ‘The Issue of Stops (Come Back! Oh Come Back!),’ ‘A Hedge Funds Strategy,’ ‘My Hedge Funds Strategy Update,’ ‘Experiment with Different Exit Tactics,’ ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple Positive Expectancy System – Trading Effortlessly,’ ‘Testimonies from My Subscribers (2),’ ‘Resist the Lure of High Risk – Part 4’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Gap Trading Revisited,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses – Part 4 (Losses Aren’t Abnormal) ,’ ‘The True Holy Grail – The Long Sought for,’ ‘Forex Trading Vocabulary,’ ‘ Clarifying Some Issues – Part 6,’ ‘Navigating Turbulent Markets – A Double Timeframe Analysis,’ ‘Before You Open that Trade,’ ‘Cogent Trading Biases,’ ‘Overview of My Signals Strategies – Can You Become a Super Trader?’ ‘The Cost of Discipline,’ ‘Monthly Market Review,’ ‘Uncertainty Has Become My Ally – An Interview with a Dogged Market Speculator,’ ‘2 Examples of the USDCAD Hedging Trades,’ ‘Annual Trading Update (2011) – The Big Picture,’ ‘You Are a Blessing to the World of Trading - A Debt of Gratitude,’ ‘Annual Trading Results (2011) – I Was Perfecting My Trading Skill,’ ‘2012 – Another Year of Victory in the Markets,’ ‘Monthly Trading Report (December 2011),’ etc.

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

Yahoo! Messenger ID: saazalmu

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:

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

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Thursday, December 15, 2011

Weekly Trading Update (December 16, 2011)

“Many people say or think that they are disciplined - but there is one way we can easily tell for sure. What is the profit and loss total in your account? If you ‘know a lot about trading’ and your P &L is negative or red over time, you are not a disciplined trader.” – Rick Wright

Hello:

Whenever the hunting season comes around, hunters are always excited. For certain weeks in a year, licensed hunters are allowed to go out into the woods and hunt for various species of wildlife. Some hunters build elaborate tree stands high above the ground where they sit quietly for hours waiting for a big wild animal to wander within rifle range. When I think of hunters who’re so patient when it comes to waiting for wild animals, I think of how impatient traders can be when they’ve to wait for good trading opportunities. While waiting for their entry criteria to be met, some traders think they’re doing nothing. This seems a waste of time, but it’s a matter of necessity. Not long ago, I passed a phase making several years since I began keeping a trading journal. As I reread my first few entries, I was amazed I ever kept it up. But now you couldn’t pay me to stop! Here are some benefits I’ve received from trading journaling: From my trading experiences, I see that progress and failure are both part of the journey. I’m reminded of risk control when it helps me to find a solution to a major problem of the uncertainty in the markets. I gained insight from past struggles that help with the issues I’m currently facing. And, most important, trading journaling show me how my skill has improved over time.

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bullish

Though seriously threatened, the bullish outlook still holds on this pair. The price has plummeting this week, and if this kind of behavior continues for a few more days, the bullish trend would be invalid. .

NZDUSD

Primary trend: Bearish

There’s been no way for the bulls to gain upper hands here. On this pair, I entered short on December 12 and got my target hit on December 14. Of course, a proper outlook is a sine qua non for victory.

AUDNZD

Primary trend: Bullish

The bullish bias here has begun to experience some kind of violation, though still valid. The SMA 50 remains above the SMA 200, but the price has broken the former to the downside. The RSI 14 is below the level 50 – showing a grave threat from the bears. The Stochastic 14,3,5 just left the overbought position and is going to the oversold region. This may present a buy opportunity after the market reaches the oversold region; especially after a bullish divergence.

EURCAD

Primary trend: Bearish

This primary trend has been in place for a long time and remains intact. One sure-fire way of dealing with this predictably trending market is to sell rallies, because every rally into a supply zone shows that bulls will lose their power and a downmove will begin. My short position on this cross is still open with over 140-pip profit.

EURNZD

Primary trend: Bearish

The market has been consolidating between the 2 MAs – indicating that a breakout may be in the offing. The SMA 50 is still below the SMA 200, while the price is zigzagging between the twain. The ADX 20 is below level 20, meaning that the market is very quiet. -DI isn’t clearly above +DI, indicating that it’s good to stay out of the market right now. I’m waiting for another breakout.

GBPCHF

Primary trend: Bullish

The price on this cross, which had been bullish since the beginning of this week, experienced a sharp reversal on Thursday. From a high of 1.4759, the price dropped by more than 200 pips. If the support at 1.4550 is broken, the downmove may continue. If not, the support may push up the price. A good risk manager can deal with any scenario that occurs. A crazy price move can’t make me pass out (this is unlike when I was still a novice). I bought the cross on Monday and bagged another 200 pips on Wednesady.

Conclusion: The first rule of forecasting should be that the unforeseen keeps making the future unforeseeable. As traders, being ready for uncertainties in the markets continues to be an ongoing reality (but we all have social behaviors that are very counterproductive in trading). It’s the ultimate market speculator’s dream: A price that starts and begins to move in the forecasted direction and generates a nice profit. Playing the markets can be risky, and even when you’ve done your homework you need luck to be on your side. Still, there are ways to improve the odds.

Let me conclude this article with quotes from Jochen Steffens:

1. “In the year 2002 I switched to another [market instrument]… Since then I’ve traded for a living but also have searched for a possibility to protect myself from the permanent uncertainty.”

2. “Most people blame circumstances if their trading isn’t successful. Without self-reflection it’s easy to blame bad market conditions or the mean broker – even though it might be true at times. In general, the trader is the only one responsible for his trading. The market will show weakness in your character sooner or later, that you can count on. The market is the best zen-master you can find. You’ve to reflect upon yourself, recognize your weakness and work on them. The market is the mirror of yourself and you’ve to improve and change.”

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

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:

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

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

Yahoo! Messenger ID: saazalmu

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Friday, December 9, 2011

Optimization of the USDCAD Hedging Strategy

BRINGING THE USDCAD TO SUBJECTION

“Nevertheless, psychologically, it's necessary that you trust your intuition. You need to evaluate what you personally know about how the markets will behave. Since history repeats itself only when it does, and conventional wisdom is right only when it is, you must trust your personal intuition. In the final analysis, the buck stops with you. You may be wrong or you may be right ─ only time will tell. But from a purely psychological vantage point, you have to trust yourself and make a decision. As long as you protect yourself through risk control, you can't hurt yourself too much.” – Joe Ross

Hello:

I’ve written at least, 2 articles about this wonderful USDCAD Hedging strategy, yet it remains my secret. This is a method that brings constant survival in the market in which both buyers and sellers could easily be stopped out. In order to enhance the performance of this strategy, some changes were made. Since the USDCAD is invariably caught in equilibrium zones, some optimization was carried out in simulation mode to determine whether the profitability of this strategy could be improved by reducing the fixed target per trade by 35 pips. Nonetheless, this kind of reduction would make less sense in a strongly trending market.

There are some characteristics peculiar to the USDCAD which make this trading method ideal on it. The Greenback and the Loonie have always been in some cut-throat struggles against each other (Canada is the largest trading partner of the United States). Resistance and support levels on the USDCAD are more conspicuous, recalcitrant and effective. This pair may move up by 300 pips in a month, only to reverse all those gains and ultimately fall far lower than the previous entry level. It is not rare for the pair to drop by 100 pips or 130 pips or even 200 pips in a week and later rally – going up again. I have seen the market going up by a certain amount of pips on a candle and later coming down by the same amount of pips on the next candle; enabling a trader to make more money from the winning trade than the losing one. Results from this kind of trading method ought to be quantified on annual basis, not on quarterly or monthly basis. Besides, persistent patience is needed to use this strategy successfully. If you like to go for fast profits, you may discover that this strategy does not fit you.

Bringing the USDCAD to Subjection

This does not mean that the pair in question can be controlled by you: it simply means that you can gain some profits from its movement anyway. This non-directional trading system is used on the USDCAD with consistent annual profits (no matter how small or big). The minimum monthly profit target is 30 pips and the maximum monthly profit target is 400 pips. You would seek to open both long and short positions on this pair at an optimum time i.e. the beginning of a trading week. For me, the weekly total trade management time on this pair never exceeds 30 minutes. Albeit, this trading logic works well only for the USDCAD, it is extremely difficult to find other pairs/crosses on which it works successfully on a long-term basis. The only issue in using it on the USDCAD is that profits may not be closed on weekly basis if the market is in a tight consolidation phase; they may be closed every fortnight or three weeks. During a consolidation phase of this market, it may take a long time for one of the open trades to hit its target. Whatever the market does would not be worrisome to you, knowing that you have both long and short trades.

Strategy Snapshot

Strategy name: The USDCAD Hedging Strategy

Trading type: Swing-cum hedging

Time frame: Non-timeframe specific

Entry: To be made available soon – free of charge

Exit rule: To be made available soon - free of charge

Alternative exit: To be made available soon – free of charge

Position sizing: 0.04 lots for each $1,000 (thus making it 0.4 lots for each $10,000 and 4.0 lots for each $100,000

Stop: To be made available soon – free of charge

Take profit: 150 pips for each trade

Trailing stop: Not necessary

Hit rate: To be made available soon – free of charge

Annual returns: Approximately within 10% to 35% per annum

Remark

As I said earlier, this strategy remains my secret, but it’s high time I revealed it totally free of charge to interested people. I’d soon show some examples of recent trades taken with this trading method. At that time, I’d give readers the chance to posses this strategy. It’ll be in form of an easily understood and do-it-yourself format. It comes with simple explanation, entry criteria, exit criteria, alternative exit, stop loss, effective trade management and other valuable hints. It’ll also contain recent trades and their accompanying charts. Please get ready to get your own free copy.

I conclude this article with a quote from Joe Ross. It has to do with a normal trading mindset all winning traders must have.

“When you are having a bad day, it's hard to not get bogged down. All you can think about is the current trade you are about to make, and how you desperately want it to be a winner. It is at these times, however, that it is useful to think of the big picture. Rather than looking at the outcome of a single trade by itself, remember that it is merely one trade among the many that you are prepared to make. All that is important in the end is to come out ahead across a series of trades. Looking at the big picture can do a lot to make you feel better when you are in a slump or are about to make a trade. By remembering it is just one trade among many, you can feel more calm and relaxed while you execute a trade.”

NB: Please watch out for my coming articles with these titles: ‘Making Money out of Losses – A Blessing in Disguise,’ ‘Achieve a Better Hit Rate with Gap Trading (Using the Logic Yourself),’ ‘Play the Markets Victoriously with Nano-cent Accounts,’ ‘Why It’s Difficult to Do the Right Things in the Markets,’ ‘How to Identify a Sideways Market – Be Safe!’ ‘A Negative Expectancy System – Pushing Against the Wind?’ ‘Trading Signals,’ ‘An Intraday Moves Catcher – A Wealth Generating System,’ ‘Unlock the Power of Everlasting Triumph in the Markets (Parts 1 - 12),’ ‘How to Handle Uncertainties in the Markets,’ ‘The Issue of Stops (Come Back! Oh Come Back!),’ ‘A Hedge Funds Strategy,’ ‘My Hedge Funds Strategy Update,’ ‘Experiment with Different Exit Tactics,’ ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple Positive Expectancy System – Trading Effortlessly,’ ‘Testimonies from My Subscribers,’ ‘Resist the Lure of High Risk – Part 4’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Gap Trading Revisited,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses – Part 4 (Losses Aren’t Abnormal) ,’ ‘The True Holy Grail – The Long Sought for,’ ‘Forex Trading Vocabulary,’ ‘ Clarifying Some Issues – Part 6,’ ‘Navigating Turbulent Markets – A Double Timeframe Analysis,’ ‘Before You Open that Trade,’ ‘Cogent Trading Biases,’ ‘Overview of My Signals Strategies – Can You Become a Super Trader?’ ‘The Cost of Discipline,’ ‘Monthly Market Review,’ ‘Uncertainty Has Become My Ally – An Interview with a Dogged Market Speculator,’ ‘2 Examples of the USDCAD Hedging Trades,’ ‘Annual Trading Update (2011) – The Big Picture,’ ‘You Are a Blessing to the World of Trading - A Debt of Gratitude,’ ‘Annual Trading Results (2011) – I Was Perfecting My Trading Skill,’ ‘2012 – Another Year of Victory in the Markets,’ ‘Monthly Trading Report (December 2011),’ etc.

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

Yahoo! Messenger ID: saazalmu

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:

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

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Thursday, December 8, 2011

Weekly Trading Update (December 9, 2011)

“…We know that in trading, regardless of how sweet a set-up appears, it’s merely a game of probabilities. So if your position doesn’t work out like you planned it to, then don’t just sit there and await the inevitable. Your first loss is always your smallest! Better to take the position off, stand aside and wait for the conditions to suit you. As the saying goes, “Better be on the side-lines wishing you were on a good move than stuck in a bad move wishing you were on the side-lines.” – Paul Wallace

Hello:

Paul Wallace, featured in my last Weekly Trading Update, would also be featured today (This is because our mindset/psychology has the greatest impact on our trading results). He explains that there’s nothing that says you’ve to stay and fight when the probabilities are against you. Running away bravely in order to fight another day is usually the sensible move. If you find that you’ve been ambushed, wherever possible it’s better to bug out, withdraw and re-group… Sometimes the disengagement from battle will give you a broader perspective and ability to make more clear-headed choices… We’ve seen the enemy and it’s us. Nowhere is this adage more prevalent than in trading. Whilst you’re in competition with all the other traders on the planet, ultimately the biggest battle you’ll face in trading (and in life) is the one with yourself. That screen is your evil twin. It’ll try and tempt you with all sorts of trouble, impulsive trades, over-trading, over-leveraging, doubling-up, the whole gamut of reckless mistakes. You’ll learn more about yourself when live trading than perhaps any other business activity. Do you really know your weakness? Have you sat down and analyzed your results, behaviors and actions? This can be the point when many traders decide to give up. They don’t like what they find. They know in their hearts that they’ve seen the enemy, it was them, and they don’t like what they saw.

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bearish

This week, the movement on this pair has been characterized by consolidation. The market doesn’t look sexy at the present, and as such it’s better to stay away from it until it becomes attractive.

NZDUSD

Primary trend: Bearish

The outlook on this pair looks similar to that of the AUDUSD. The bearish outlook, nevertheless, may be rendered invalid if the next outbreak is bullish. Then the trader could try to find a suitable entry, but should certainly not misuse his carte blanche; as it’s typical of gamblers.

AUDNZD

Primary trend: Bullish

This market is still in a sideways move. The SMA 50 is above the SMA 200, and the price is moving sideways along the former. The RSI 14 is hovering around the level 50 – indicating a sideways move. Plus the Stochastic 14,3,5 is trying to go into an oversold region.. The scenario is quite similar to what happened last week. Could this be a scalper’s paradise?

EURCAD

Primary trend: Bearish

It seems the price on this cross is trying to find an equilibrium before it continues its journey downwards. I don’t think the EUR has any chance against the CAD at the present. This is evidenced by the historical data of the market. The candles on your screen represent the footprints of buyers and sellers.

EURNZD

Primary trend: Bearish

The bears’ domination has just been started on this cross, and this may be the beginning of a long-term bearish run. The SMA 50 is now below the SMA 200, while the price is below the former. The ADX 20 has crossed below the level 30, showing that the market is trying to find some equilibrium before it continues its journey. -DI is still above +DI, indicating that the bears are still strong. A bearish continuation is more probable.

GBPCHF

Primary trend: Bullish

Bears have no chance on this instrument. Sellers, beware! There have been several bullish breakouts in the market. Plus this may continue if the resistance at 1.4550 proves to be ineffectual. Could it go up or down? The answer lies in small position sizing, as an ambidextrous trader doesn’t care whether it goes up or down. .If you peed into your pants because a position had run negative, then your risk (position sizing) was too high.

Conclusion: Paul Wallace states conclusively that you’ve paid for your trading experience in time, energy or money (probably all 3); it’s your responsibility to draw as much educational value from your experience as possible. What could be improved, what you did well and what will you do next time? You’ll find that in high performance environments, being able to stand up and debrief your mistakes is a great way to ensure that the learning process is shared and strengthened. The likelihood of that mistake happening again decreases.

A quote from Joe Ross ends this article:

“There is an axiom of trading that is difficult to accept: sometimes the markets work the way you would expect, and sometimes they don't. Most people have a belief that the world works in a highly predictable way. It's hard to accept the reality that life outcomes are uncertain. We never really know what will happen next. What events impact the price of whatever you are trading, and how will the masses react? What events did we forget to consider?”

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

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:

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

Saturday, December 3, 2011

The Most Important Trading Skill

WHO’S A WINNING TRADER?

"The central message is, ‘knowledge is not power. Education is not the key or the answer. In the end, the only thing that matters is what you can do under pressure. The strength of a great tree is the roots and the trunk, not the branches.’” - Ryan Litchfield

Hello:

In one of my former articles, I revealed that the most difficult task in trading is the attempt to retain your accumulated profit when things aren’t going your way. If the returns accrued in easy markets are extremely difficult to defend in bad markets (at least some part of the returns), then the most important trading skill is the ability to defend the returns on your portfolio. This also has to do with the ability to defend a trading portfolio. The point is to make sure that you lose as little as possible in bad markets, using very small sizes, stop loss, breakeven, trailing stop and take profit in your trading. During a losing streak, which would never announce its arrival, trading accounts and/or the returns on them can never be defended successfully with big position sizes.

It’s your long-term survival in the markets that can make you a permanently opulent trader. Kenneth C. Griffin had a humble beginning as a market speculator. When managing relatively small amount of funds, he was successful, and as a result, bigger funds were entrusted to him. Griffin has been one of the most successful hedge funds managers of all time. What do you think is his average returns per month? Well, for those who invested, huge rewards followed which Griffin attributed to his exceptional investment skills. Specifically, annual performance has been in excess of 20% since 1998. He’s already up by 15% this year.

To many traders out there, it isn’t sensible to look for around 20% returns per annum. I understand the reason behind this feeling; most traders only have small amounts of money. For example, an annualized gain of 20% doesn’t make sense on $1,000 unless it is $100,000. One former trader who was a consistently losing trader was complaining that his loss was due to the fact that he’d no enough money. Eventually, a bigger amount of money was given to him. He thought that would enable him to use bigger lot sizes. Things worked for him in the short run, but when a losing streak came in, he couldn’t survive it. This means that if one can’t manage small amounts of money successfully, it’s doubtful one would be able to manage big amounts of money successfully. The most important trading skill will forever be the ability to move ahead (no matter how slowly) no matter what the markets do.

Who’s a Winning Trader?

Who’s a winning trader? One who usually survives bad market conditions is a trader that’s truly great. A winner knows that even with 10% - 30% returns per annum, she/he will soon grow rich. A winner isn’t someone who doubles her/his account time and again. A winner is the person who can survive in the markets for the rest of her/his trading career – no matter how small the annual profit is. A winner doesn’t fear loss for she/he knows that a loss would only take away a very small portion of their account (something negligible). A winner knows that after a loss, she/he will still be breathing, and therefore she/he has nothing to be afraid of. A winner doesn’t dread taking trades from new setups because of a recent string of losses.

If you gain between 30% to 50%, or more than that per annum, you’re a victor. If you gain 20% or 15% returns per annum, you’re a victor. If you gain 10% or 5% or 2% in a year, you’re a victor. You’d just need to be thankful for the fact that your capital is intact (those who have had big drawdowns on their capital are worse off). You’re still a winner even if all you have at the end of a trading year is your capital; as long as your annualized loss is less than -10% (those who have had margin calls are far worse off). You don’t need to lose what you have before you can appreciate it. As a risk manager, when in a losing streak, the more frustrated you are, the calmer you got to be (knowing that a winning streak is around the corner). A good year is ahead.

Please, leave any trading misconceptions behind.

Permanent victory in the market may be hard to achieve, but it’s not impossible. Despite the fact that some academics and economic theorists espoused the line that it’s impossible to profit on the long term, many people active in the markets – traders, investors, and some analysts – have known for years that markets aren’t efficient and that they’re affected by people’s behavioral and emotional biases and attributes. Small position sizes enable you to continue staying in the markets, for your portfolio would be your reinforcements when the market conditions are favorable to you. It pays to continue to stay active in the markets, for the best trading months and years may still be ahead of us.

I conclude this article with quotes from Ryan Litchfield:

1. “A good trader is ambidextrous. Upside and downside moves are seen as equal opportunity. A good trader appears fickle and almost too willing and eager to leave trade that is not going as planned. A good trader never loses. A good trader sees the small amount of money associated with being stopped out as a cost not a loss. The good trader sees that cost as the price to find out if a potentially big move would happen.”

2. “Ok, so if you can't dictate the outcome, then your odds are 50/50 every day that you are in the market. 50/50 you say??? Yes 50 / 50. Time and time again the market moves the opposite way that was expected. News stories can reverse the direction of a stock or market and the market often reacts the opposite way the news might suggest. Trading must involve a comprehensive plan for a move in any direction.”

3. “Contrary to popular wisdom, being successful in the market has little or nothing to do with winning. In fact trading, which is often compared to warfare and battle, is not about winning and losing at all. If it rains on your picnic did you lose? Hey it looked like a nice day. Was it your fault that a sudden storm showed up and your picnic was washed out? Since you can have nothing to do with the direction of a stock or the market, how can you win or lose? The market is going to do what it is going to do whether you play or not, all you can do is to act and react so as not to get run over. If you have taken a position and it moves against you, it is not your fault unless you did not anticipate that possibility and have an exit strategy in place.”

NB: Please watch out for my coming articles with these titles: ‘Making Money out of Losses – A Blessing in Disguise,’ ‘Achieve a Better Hit Rate with Gap Trading (Using the Logic Yourself),’ ‘Play the Markets Victoriously with Nano-cent Accounts,’ ‘Why It’s Difficult to Do the Right Things in the Markets,’ ‘How to Identify a Sideways Market – Be Safe!’ ‘A Negative Expectancy System – Pushing Against the Wind?’ ‘Trading Signals,’ ‘An Intraday Moves Catcher – A Wealth Generating System,’ ‘Unlock the Power of Everlasting Triumph in the Markets (Parts 1 - 12),’ ‘How to Handle Uncertainties in the Markets,’ ‘The Issue of Stops (Come Back! Oh Come Back!),’ ‘A Hedge Funds Strategy,’ ‘My Hedge Funds Strategy Update,’ ‘Experiment with Different Exit Tactics,’ ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple Positive Expectancy System – Trading Effortlessly,’ ‘Testimonies from My Subscribers,’ ‘Resist the Lure of High Risk – Part 4’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Gap Trading Revisited,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses - Part 4 (Losses Aren’t Abnormal),’ ‘The True Holy Grail – The Long Sought for,’ ‘Forex Trading Vocabulary,’ ‘ Clarifying Some Issues – Part 6,’ ‘Navigating Turbulent Markets – A Double Timeframe Analysis,’ ‘Before You Open that Trade,’ ‘Cogent Trading Biases,’ ‘Overview of My Signals Strategies - Can You Become a Super Trader?,’ ‘Optimization of the USDCAD Hedging Strategy - Bringing the USDCAD to Subjection,’ ‘Uncertainty Has Become My Ally – An Interview with a Dogged Market Speculator,’ ‘The Cost of Discipline,’ ‘2 Examples of the USDCAD Hedging Trades,’ ‘Monthly Market Review,’ ‘You Are a Blessing to the World of Trading,’ ‘Annual Trading Results (2011) – I Was Perfecting My Trading Skill,’ ‘2012 – Another Year of Victory in the Markets,’ ‘Monthly Trading Report (December 2011),’ etc.

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

Yahoo! Messenger ID: saazalmu

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: