“Despite their knowledge of trading, the vast majority of traders experience fear on a level that compromises their capacity to trade effectively. This problem eventually comes to a boiling point somewhere in the evolution of a trader. At this turning point they either leave trading, continue to suffer losses, or begin to take a closer look at themselves. They recognize that the Holy Grail is not “out there” in their system or methodology. The trouble lies within them. And the culprit is fear. The solution also lies within them.”– Rande Howell
Hello:
Sun Tzu once said “He who knows when he can fight and when he cannot, will be victorious.” Knowing when not to trade is equally, if not more important, than knowing when to trade. Those who think they got to trade day in day out are laying foundation for our success: we’ll benefits from their mistakes. Longevity and safety of your account are far more important than overnight profits. George Soros made 40% annual profits for 10 years in a row. Jim Simons made 40% annual profits for 15 years in a row (these are rough estimates). They become trading legends. So legends aren’t those who double their accounts always, but those who make presentable consistent profits over a long period time. The problem is that most of us enter into the trading world with the wrong mindset (inculcated into us by deceptive marketers and sly seminar people). And in most cases, 90% of traders won’t heed simple advice until they learn their lessons thru trying experiences. I solemnly pray this doesn’t happen to you!
AUDUSD
Primary trend: Bearish
This pair experienced a gap down at the beginning of this week, and as a result of this, there’s been a bullish rise. However the long-term bias remains bearish – unless there’s a consistent move above the 1.0000 level. My last sell order was closed with 12-pip loss upon generation of a ‘buy’ signal. I’m still holding the position.
Order: Buy
Entry date: January 31, 2011
Entry price: 0.9968
Initial stop: 0.9868
Current stop: 1.0059
Exit date: N/A
Exit price: N/A
Status: Open
Profit/loss: 180 pips
Percentage growth: 1.8%
NZDUSD
Primary trend: Bullish
The movement on NZDUSD is similar to that of the AUDUSD, except that the bias on the former is still bullish. The gap down at the beginning of the week later caused a rise in price. It was because the price hit a demand zone after a temporarily forceful pullback in the price; and in the context of an uptrend. The trap that was set for a partridge caught an iguana.
EURCAD
Primary trend: Bullish
The trend movement on this cross is predictable with over 70% accuracy. In the present bullish run, it seems nothing would impede the movement on the market except an exponential weakness in the Euro; something that would happen eventually.
EURAUD
Primary trend: Bullish
I’m having a short trade on this pair. The strong resistance at 1.3890 seems impregnable to buyers - which may halt the current bullish move. A gap up at the beginning of the week may be a sign that buyers would soon become casualties on this market. Whatever the market does, the most important thing is to observe your trading rules and take actions accordingly. Not all fruits are edible.
Order: Sell Stop
Entry date: January 28, 2011
Entry price: 1.3700
Initial stop: 1.3800
Current stop: 1.3528
Exit date: N/A
Exit price: N/A
Status: Open
Profit/loss: 269 pips
Percentage growth: 2.6%
EURNZD
Primary trend: Bullish
The price on this exotic cross has been moving up since last week. The battle between the bulls and the bears has been critical and it seems the price was reaching some equilibrium before the sellers’ stamina thinned out. The price has moved above the SMA 20. The ADX 20 level is, nevertheless, showing low volatility. +DI is only slightly above its –DI counterpart. My former short trade gave me a profit of 100 pips (the market moved in my favor, and later reversed. It hit my risk-adjusted stop). I got another short position. The market looks tricky.
Order: Sell
Entry date: February 2, 2011
Entry price: 1.7832
Initial stop: 1.7932
Current stop: 1.7725
Exit date: N/A
Exit price: N/A
Status: Open
Profit/loss: 191 pips
Percentage growth: 1.9%
AUDJPY
Primary trend: Bearish
The considerable gap down in the price at the start of this week caused a steep rise in price, which was curtailed as soon as the price hit the upper Bollinger Bands. The market has been indecisive since then. If the price can’t push the upper Bands constantly higher, then a steep fall in price looms. Please bear in mind to minimize losses and capitalize on profits. By doing this, you’ll not see the market as a bete noire.
Order: Buy Limit
Entry date: January 13, 2011
Entry price: 82.00
Initial stop: 81.00
Current stop: N/A
Exit date: January 20, 2011
Exit price: 81.82
Status: Closed
Profit/loss: -21 pips
Percentage growth: -0.2%
Conclusion: Without patience and rock-solid discipline, no one can have long-term success on the markets. More frequent trades don’t mean more profit (it may even contribute to faster drawdown). I often ask myself this question: “What did I gain in my novice years when I was in a hurry to make big money?” Answer: Nothing. Please take note. Be patient!
This article is ended with quotes from Joe Ross, a highly effective eclectic trader with over 50 years of experience:
“Those who stay on the cutting edge will prosper. Traders can prosper under any market conditions. Be prepared to go where the money is. Do not tie yourself to… one single time frame. You will need to display a great degree of flexibility and adaptability in 2011.”
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:
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NB: There is risk of loss in trading, but it is possible to be a successful trader.
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