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Friday, April 8, 2011

Weekly Trading Update (April 4 - 8, 2011)

“I speak with market speculators both new and experienced and realize they are talking about something they think they completely understand when in reality, their perception of the truth is very wrong.” – Sam Seiden

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. My preferred leverage is 1:100 and my position size is 0.01 lots for each $2000. The risk per trade stands at 1%. The Stops are my life insurance policy. I use the Price Behavior rules for strategic decisions and customized indicators 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 with a risk-to-reward of 1:3, riding the trend until the target is hit or for a maximum of 2 weeks. 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.

Every time you make a trading decision you got to choose: The pain of discipline or the pain of regret. Discipline is tough – and something we may try to avoid. But in sports and in trading, short-term pain is often the only path to long-term gain. In the heat of battle it’s too late to prepare. Either you’re ready for the challenges of trading or you’ll be haunted by the “what ifs,” “if onlys,” and “I should’ves” that accompany the failure to be prepared. That’s the pain of regret.

AUDUSD

Primary Trend: Bullish

Could this pair reach the 1.0500 level and break it and move higher? I believe this could happen only if the present fundamentals that drive the markets remain unchanged. Otherwise, there would be a nice opportunity to sell. Please prepare for that opportunity.

NZDUSD

Primary trend: Bullish

The direction of the NZDUSD is clearly similar to that of its AUDUSD counterpart. There must be a change in the investors’ risk appetite for any meaningful selling pressure to occur. You can take your profits now and then, whenever you’re right. Small risk would bring small profits (and better safety). Plus small profits can make a huge difference. There’s an open trade here.

Order: Buy

Entry date: April 5, 2011

Entry price: 0.7681

Stop loss: 0.7481

Current stop: 0.7681

Take profit: 0.8279

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 148 pips

EURCAD

Primary trend: Bullish

I have a long trade on this cross. The primary trend remains bullish, but there’s now some bearish divergence that can’t be overlooked. There may be a serious bearish move if the present situation changes, but the bullish trend is supposed to resume if there’s a significant weakness in the Loonie.

Order: Buy

Entry date: April 5, 2011

Entry price: 1.3741

Stop loss: 1.3541

Current stop: 1.3741

Take profit: 1.4333

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 94

EURAUD

Primary trend: Bullish

The EUR is having a hard time maintaining supremacy over the AUD in the present context of an uptrend. Could this be an opportunity to buy a pullback, or the present pullback would eventually result in a new trend? Only time would tell? You merely need to use your discretion and trade only what you see, for behavior resulting from a market expectation is hard to teach a computer.

EURNZD

Primary trend: Bullish

There’s been a bearish signal in the present context of the primary trend. I’m looking for an opportunity to enter at the right time. The price has now gone below the SMA 20. The ADX 20 level is showing a strong trend. +DI has gone below its –DI counterpart. It’s clear that the present scenario has a greater probability of continuation. If the strong EUR can’t currently withstand the NZD, what would happen if the former eventually weakens?

AUDJPY

Primary trend: Bullish

The Yen is now one of the weakest currencies out there. If the level 90.00 is successfully broken on this cross, then the present bullish scenario may continue. If not, the resistance may cause the price fall. However, there must be a significant decrease in the strength of the Yen for this to happen. Take risk control serious – no matter what happens. Focusing on risk management is the best and the wisest trading decision you’ll ever make.

Conclusion: As a final world for this week trading update, I’ve always said that it’s better for traders to find strategies that work for them rather than depending on automated software for their financial fate. Brendan Egan has more to say about this:

I luckily never got fully sucked into this, but boy oh boy was I tempted at times. There are claims all over the internet of automatic trading computers that can place trades and think for you whilst you're off at school, work, or on the golf course. I don't have any experience with them, but from the people I have talked to who have tried them out they are something you absolutely must avoid.

I mention this because I know a lot of people online get sucked into false promises, and from what it sounds like a lot of these trading robots offer a whole lot of false hope. If you really want to learn how to trade and be successful in the markets, you have to put in the time one way or another to learn about how the markets work and to gain enough experience to be successful. There's no substitute in the trading world for hard work and experience.”

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

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

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

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