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Thursday, June 23, 2011

Weekly Trading Update (June 24, 2011)

“The best traders focus on the process of trading well and let the PL (profits and losses) take care of themselves.” – Steve Ward

Hello:

Bad fundamental figures could push down a market price to a level where buyers may buy a pullback if the major trend is bullish and good fundamental figures could raise the market price to a level where sellers may sell a rally if the major trend is bearish. The beginning of a new trend offers the lowest risk and highest reward opportunity to enter that trend. Trading against a trend, or counter-trend trading, is an act of standing in front of market flow which is a higher risk trading style. Trading results are generally improved by setting a profit target for each position. The benefit of a predetermined profit target is to enable speculators to close a position before the overall trend changes. Also, it’s great to add a stop to each position in order to get out of fast reversals, which might happen anytime in the week or month.

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

AUDUSD

Primary Trend: Bearish

All bullish attempts on this pair have been clearly unsuccessful. They even provided sellers with clean shorting opportunities. My short position has been positive and the risk on it has been removed. It’s very hard to see a strong Aussie right now.

Order: Sell

Entry date: June 16, 2011

Entry price: 1.0560

Stop loss: 1.0650

Trailing stop: 1.0560

Take profit: 0.9965

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 76 pips

NZDUSD

Primary trend: Bullish

The long-term uptrend on this pair is still intact in spite of the threats against it. The price pullbacks have often led to new bullish waves. I got a long position on this pair. If there are not major market-moving events, the price can enter a new consolidation phase which would be characterized by small candles. Small candles represent indecision in the market whereas large ones represent great moves.

Order: Buy

Entry date: June 21, 2011

Entry price: 0.8118

Stop loss: 0.8015

Trailing stop: N/A

Take profit: 0.8715

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: -19 pips

EURCAD

Primary trend: Bullish

I’ve no open trade on this instrument yet. The serious threat to the major bullish trend (which started last week), has continued. In fact, the price is diving noticeably. If the price level at 1.3840 is broken downwards at last, the bearish pressure may continue and the primary trend would turn bearish.

EURAUD

Primary trend: Bullish

Here, the fact that the Euro is weaker than the AUD is conspicuous. Nevertheless, the bullish bias still holds. If the present scenario continues, the northbound outlook may be violated. This is something that may happen in the nearest future, and it’d be wise to use as little risk as possible when trading this cross.

EURNZD

Primary trend: Bearish

Since I was stopped out with a profit, I’ve not traded this instrument. The trend looks downwards – making it sensible to sell rallies. Currently, the price is quoted below the SMA50 and SMA 200, confirming the bearish mode. The ADX 20 level is edging towards 30, suggesting that sellers may become more aggressive soon. The -DI is clearly above the +DI. This could be a nice selling opportunity for me.

AUDJPY

Primary trend: Bearish

Another trade of mine on this market is presently running. The primary trend has always been bearish, going down and down, and rendering nearest support levels ineffectual. There’s a great probability that this would hold. Fundamental figures would matter a lot in supporting this outlook as price continues its never ending quest to find equilibrium.

Order: Sell

Entry date: June 16, 2011

Entry price: 85.47

Stop loss: 86.47

Trailing stop: 85.47

Take profit: 79.51

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 102 pips

Conclusion: Traders must work on themselves if they want better trading results. Psychologically, those who aren’t disciplined would continue to sabotage their own efforts, even if they possess great trading systems or subscribe to great signals services. Many serious and honest-hearted traders who worked on themselves made it in the end: though the early years were difficult, the markets rewarded their efforts.

The article is ended with a quote from Dr. Van Tharp:

“In the beginning I lost a lot of money and when I had done that a second time. I concluded it must be me… At some point, I realized that nothing would change until I changed…”

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.

Saturday, June 18, 2011

Developing the Right Attitude towards Losses - Part 2

COMING TO TERMS WITH REALITY

“One of the problems in the markets is that people found lots of other people or things to blame. People who blame someone else or anything external always repeat their mistakes and avoid personal responsibility... You are totally responsible for your performance as a trader; therefore, you should devote significant time to working on yourself in order to be successful.” - Dr. Van K. Tharp

There's no need to find fault with the circumstances of our lives. We can waste time blaming other people, our background, our environment, or our life situation, but there are times when we need to close one or more chapters in life that are causing us to lose. We need to close that chapter and get on with the rest of the book.” – Joe Ross

Hello:

Many traders describe their trading experiences as an ‘emotional roller coaster’ of soaring success and plummeting disappointments, daily or weekly frustrations and challenges, and exciting accomplishments and achievements. Do you feel dejected and despondent whenever your trade turns negative? If so, may this article help you to understand that losses are normal, but they shouldn’t lead to a margin call or huge drawdowns.

As far as trading success is concerned, perfectionism is an extremely harmful mindset. Every trading system will have periods of losses – whether in a day or a week or a month. No trader on earth can avoid losses. Whenever you open a position, either your stop or target will be hit, or either you close it in a negative zone or a positive zone. There’s no way around these. You need to resolve to stop feeling sorry for yourself and dwelling on negative thoughts whenever a trade goes negative. So, you have a loss in the market. A loss is a loss. You only suffer when you believe that it shouldn't be that way. Arguing with reality causes all suffering. Until you understand this, you don’t understand life and trading. Loss trades would test your commitment to trading mastery and forever change the way you view the markets when you were still a beginner. However, they’ll also give you the opportunity to develop valuable qualities befitting a great trader.

The notion that market makers run stops is nonsense as the weight of capital required to force the market in a desired direction to run a couple of stops would be possessed only by a select few institutions and central banks – even then, long-term manipulation of this market is practically impossible by a single player.

“I often meet people that actually think I and other instructors hardly ever lose,” reveals Sam Seiden, “They want to take our classes because they think they will learn to never lose and only have winning trades all the time. We have a high winning percentage but we certainly have losses. None of us like to lose; I know this firsthand from competing in sports. Just like in sports, however, falling down in practice is a must if you are going to skate faster. Striking out from faster pitches is a must if you are going to make it to the big leagues; swinging your driver harder and slicing the ball 100 times is a must if you are ever going to hit a 300 yard drive straight. Imagine what would happen to the casino if they tried to eliminate the losses. They would be out of business and none of us would have a playground in the middle of the desert to enjoy. Losing in trading is great so long as it's proper losing. To become a professional winner, you have to first become a professional loser.”

Just as a pair of inexperienced skaters needs time and patience to find their balance on the ice, you need time to adjust to the trading principles that work. Eventually, though, you’ll reach success.

I trade what I see, not what I think. For my own benefit and that of my clients, I carry out my simple analyses and retrograde calculations and open positions; which include risk management settings that make me the average losses that are much smaller than the average profits over a long period of time. In spite of inevitable losses, I’d have profit to declare on annual basis. I know that I just have to stay with this and go thru it day by day, week by week, and month by month.

The key is to manage your open trades as opposed to just sitting back after entry and hoping things work out. With good risk management applied, you’re protected if your position is filled and moves negative. If the position moves in your favor, then raise your stop.

NB: Please watch out for my coming articles with these titles: ‘Resist the Lure of High Risk – Part 3,’ ‘Carrying Out Stealth Raids in Weak and Strong Markets,’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Advanced Gap Trading – Trading with Insane Accuracy,’ ‘3 Recent Gap Trades,’ ‘Trading for a Livelihood – One of the Best Jobs in the World,’ ‘If I Were a Trading Neophyte…,’ ‘Developing the Right Attitude towards Losses - Part 3,’ ‘The True Holy Grail – The Long Sought for,’ ‘Achieve Success through Sensible Risk-to-reward Ratio (An Interview with a trading Enthusiast),’ ‘ Clarifying Some Issues – Part 5,’ ‘The Change from 4 decimals to 5 Decimals,’ ‘Optimization of the USDCAD Hedging Strategy – Bringing the USDCAD to Subjection,’ ‘The Proper Way of Using the Bollinger Bands – Learn the Truth from the Horse’s Mouth,’ ‘Monthly Trading Report (June 2011),’ etc.

I end this article with the 2 quotes below:

“I started trading because I wanted to make profit, however my mind was still focusing on not to lose. For me this was buried deeply in my subconscious so I did not recognize it. I think about two weeks ago I decided I'm trading to win, after I got stopped out 4 times in a row. Of course I will be stopped out on occasions in the future. However I trust and focus on the profitable trades that will follow.” - Marcus de Maria

“Minimize your mistakes and trade at 95% efficiency or better. You make a mistake when you don’t follow your rules. If you don’t have rules, everything you do is a mistake. When traders do have rules, most of them have trouble trading above 70% efficiency (3 mistakes every 10 trades) simply because they haven’t worked on themselves. Trading at 70% efficiency will destroy the results from a good trading system.” - Dr. Van K. Tharp

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

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

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

Friday, June 17, 2011

Weekly Trading Update (June 17, 2011)

“I take little risk per trade in terms of the total portfolio.” – John Bollinger

Hello:

The best position a market speculator can take is to follow the line of the least resistance. This is the easiest and the most profitable trading approach; which can be applied to any financial markets since it’s non-market specific. The strategies that enable traders to swim along the flow of the current, and not against it, have been identified as the most successful strategies. For many years they’d been tested and trusted, especially when they were used with sensible money management. When a rule-based discretionary method signals a trade in the direction of the prevailing trend, the trader would have better chances of success which enable her/him to take advantage of the market fluctuations in the direction of the major trend. As soon as the entry order is triggered on the broker platform then all that there’s left to do is sit back and let the strategy play itself out. Then you’d later manage the open trade based on whatever happens.

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


AUDUSD
Primary Trend: Bearish
I’m still waiting for a clear signal. The market acted with frenzied movements this week. There was a bearish move at the beginning of the week, followed by a serious bullish correction in the middle of the week, then followed by a massive bearish resumption towards the end of the week. The lesson: Never trade against the trend.

NZDUSD
Primary trend: Bullish
I was stopped out of my long position (at breakeven) by a strong downward move on this pair. The primary trend remains intact. It’s only a protracted downward move that can change the primary trend. Even if one is caught on a wrong side, a safe position sizing would allow only relatively low drawdowns.
Order: Buy
Entry date: May 30, 2011
Entry price: 0.8156
Stop loss: 0.8156
Trailing stop: N/A
Take profit: 0.8758
Exit date: June 13, 2011
Exit price: 0.8156
Status: Closed
Profit/loss: 0 pips (breakeven)

EURCAD
Primary trend: Bullish
There’s been a serious threat to the primary uptrend. From last week to this week, the market has fallen by over 500 pips. Yet it’s logical to wait for a clearer direction before one would enter. If the primary trend turns bearish, I’d need to sell a rally. But if the bears eventually fail, I’d go long.

EURAUD
Primary trend: Bullish
The movement of this cross is quite similar to that of the EURCAD. This was caused by the weakness in the Euro – something I’d anticipated. The market seems to have found a support at 1.3370. If the support holds, I’d need to look for a new buying opportunity. If not, the prevailing trend might turn bearish, and I’d sell. In a notoriously volatile market where fortunes can be made and lost in seconds, it’s judicious to trade what one sees.


EURNZD
Primary trend: Bearish
My last trade was stopped out with some profit. The NZD is having some difficult time gaining any meaningful strength against the Euro. There’s no clear winner at the present, since the market has been ranging throughout this week. Currently, the price is quoted below the SMA50 and SMA 200, suggesting a possible bearish resumption. The ADX 20 level is around 16, confirming a ranging market. The -DI is not clearly above the +DI, and the other way round. This shows a seriously ranging market. I’m staying out for now.
Order: Sell
Entry date: June 6, 2011
Entry price: 1.7916
Stop loss: 1.7926
Trailing stop: 1.7721
Take profit: 1.7592
Exit date: June 13, 2011
Exit price: 1.7694
Status: Closed
Profit/loss: 222 pips

AUDJPY
Primary trend: Bearish
As I said last week, a strong rally on this cross gave a nice opportunity to sell in the ongoing bearish bias. The key is to look for another nice shorting opportunity. This may give us early signals to ride new bearish waves, though I admit there are many times these trends don’t move our way.
Order: Sell
Entry date: May 19, 2011
Entry price: 86.91
Stop loss: 87.95
Trailing stop: 86.91
Take profit: 80.95
Exit date: June 14, 2011
Exit price: 85.71
Status: Closed
Profit/loss: 120 pips

Conclusion: When asked about the most important thin he learned on his way to becoming a professional trader, John Bollinger, the creator of Bollinger Bands, mentioned the quotes above and below:

1. “I can tell you what it was: discipline. I believe that ultimately it all comes to that. I can remember a friend who was basically good at what he did. However, he tended to be impatient… In my opinion, this friend’s lack of discipline caused him to never have any success implementing his ideas. I have developed the discipline to enter the markets every day and engage in a struggle to manage complications, while proceeding in a focused and disciplined manner. I do this everyday and I think that this is exactly what matters: You just have to go thru with your plan day by day. That is the difference between successful trader and those who would very much like to be.”

2. “My first trade was the perfect beginner’s trade, and I will also tell you why… It was a total loss which from the start sensitized me to the risk inherent in the business of speculation – which is exactly what beginners need. If the first trade is a big win, there is a danger that you will overestimate yourself and subsequently commit big mistakes. A negative experience at the beginning may, as it were, be a huge win in the long run.”

3. “Psychology is key in trading. To put it in a nutshell, I would say that trading is nothing but a psychological game with yourself.”


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.

Saturday, June 11, 2011

“Trading is never without risk, but the length of time for which you accept that risk is under your control. When you’re able to control events, the probability of you making money increases dramatically.” – Jim Augustine

Hello:

It’s believed that trading can be more profitable in some periods than others. For example, the London session is the busiest trading session, followed by the New York session. It’s also noted that most market movements occur in the middle of the week, i.e. Tuesdays and Wednesdays. Some educators encourage traders to trade during the London and/or New York Sessions only; they encouraged their students to carry out most of their trading activities during the middle of the week. Moreover, they advise traders to desist from trading on Mondays and Fridays, because of thin and often unpredictable market movements.

It sounds logical to trade during busy sessions and when the markets are most likely to move very well. But does this guarantee success?

This was part of what I learned when I was getting my feet wet, and I traded only during the busiest sessions and days. As a novice, I didn’t know that the secret to success is disciplined psychology and risk and money management, not any trading systems, whether manual or semi-automated or fully automated. In spite of trading during the recommended sessions and days, my trading results were a mess.

This flies in the face of what the majority tend to believe: I discovered that all trading sessions and days are unpredictable – not only Sundays, Mondays, Fridays and Asian sessions. The market may even move powerfully when it’s expected to be quiet. It may be quiet when it’s expected to move powerfully. What brings losses for some on Mondays or Fridays also brings profits for others the same time. The busiest sessions and days that seem predictable may also move against you massively anytime and damage your account if you don’t cut your losses. Contrary to the impression some analysts and educators are trying to give, the trading world gasps at the unpredictability of the markets.

Some traders go for a few pips per trade; some go for hundreds or thousands of pips.

Certain traders open and close their trades in a matter of seconds. Some trade during Asian sessions only – carrying out short-term raids in the markets. It isn’t uncommon for some professionals to get the trend movement and speculate on the range for a pair/cross from London opening… and set their plans for intraday trading and wait to execute it around New York opening time. Some traders open new positions at the opening of the markets on Mondays and smooth them on Fridays. Some buy bull markets at the open and sell them at the close; buying bear markets at the close and selling them at the open. I follow gap trading signals on Mondays, at the close of the New York session and ride the trades for 2 weeks. I ride my swing trades for 2 weeks as well; whereas I ride position trades for as long as possible - months. My hedging trades are placed immediately the market opens and they’re ridden for as long as possible, until the exit criterion is met.

There’s no better time to trade. It doesn’t matter how you trade and when you trade: what matters most is how you manage the trading risk and your money. Traders need more than strategies and market analyses. They also need to apply sound risk management. Any trading activity whatever that’s short of safe risk control measures is tantamount to gambling. A good trading risk and money manager can survive and move ahead despite any market days and conditions.

NB: Please watch out for my coming articles with these titles: ‘Resist the Lure of High Risk – Part 3,’ ‘Carrying Out Stealth Raids in Weak and Strong Markets,’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Advanced Gap Trading – Trading with Insane Accuracy,’ ‘3 Recent Gap Trades,’ ‘Trading for a Livelihood – One of the Best Jobs in the World,’ ‘If I Were a Trading Neophyte…,’ ‘Developing the Right Attitude towards Losses (Part 2) – Coming to Terms with Reality ,’ ‘The True Holy Grail – The Long Sought for,’ ‘Achieve Success through Sensible Risk-to-reward Ratio (An Interview with a trading Enthusiast),’ ‘The Change from 4 decimals to 5 Decimals,’ ‘Monthly Trading Report (June 2011),’ etc.

I end this article with a quote from Joe Ross:

“…Some traders may work under the false belief that merely by making a bunch of trades they can increase their odds of success. They wrongly assume that they can make any trade for any reason, and that the more trades they make, the more profits they will realize. Even though you have to risk money to make money, and similarly, you must execute trades to make profits, it doesn't mean that just putting on trades guarantees success. Obviously, you must use trading methods that are viable, and use them under those market conditions where they have proven effective in the past. It's important to remember that you must carefully monitor market conditions, and apply a trading method when it is likely to produce a profit…”

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

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

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

Thursday, June 9, 2011

Weekly Trading Update (June 10, 2011)

“My trading results are my responsibility and they are the consequences of my beliefs, my thoughts, and my actions.” - R.J. Hixson

Hello:

The Foreign Exchange market, being the largest market in existence, and dwarfing all other global stock, commodity and derivative markets combined, offers peerless trading opportunities for interested ones the world over. Moreover, its innate risk can only be curbed by truncating losses and giving profits some leeway. This is what really smart traders ought to do. One isn’t smart by sticking to losing trades. The more period speculators use creating impressions that they know the future, the more they’d be reluctant to close losing trades. This often leads to emotional commitment which is extremely dicey and of sticking to the decision to ride losing trades to the end. Chances merely amplify the uncertainties of tomorrow as the issue of increase or decrease of portfolios thus turns into elementary matter of saving one’s face, with pecuniary contemplation relegated to the background. As proven by the time and history, this eventually leads to cataclysmic and irreparable drawdowns.

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

AUDUSD

Primary Trend: Bearish

This pair has failed to gain any noteworthy bullish momentum since last week. It’s unlikely that there would be any sustained rise in price. I’d be looking for an opportunity to short this pair.

NZDUSD

Primary trend: Bullish

My long position is still open. The NZD has been rising slowly but steadily, being a very strong currency at the moment. It’s getting difficult for its counterparts to gain any strength against it. If the factors that contribute to the strength of the NZD continue, even a correction in the market would only lead to a stratospheric rise.

Order: Buy

Entry date: May 30, 2011

Entry price: 0.8156

Stop loss: 0.8156

Trailing stop: N/A

Take profit: 0.8758

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 100 pips

EURCAD

Primary trend: Bullish

This market has been rising steadily since last week, and this was expected to continue. But the bullish journey was stalled when the Euro was eventually weakened. My long order reached a breakeven.

Order: Buy

Entry date: June 3, 2011

Entry price: 1.4158

Stop loss: 1.4058

Trailing stop: 1.4158

Take profit: 1.4747

Exit date: June 9, 2011

Exit price: 1.4158

Status: Closed

Profit/loss: 0 pips (breakeven)

EURAUD

Primary trend: Bullish

The stronger Euro is also visible on this instrument – it may even be the beginning of a sustained bullish trend. If the Aussie continues its present lack of stamina, the bulls would only continue reigning. The bull market starts where the bear market ends.

EURNZD

Primary trend: Bearish

On this cross, there was a bullish correction in the midst of a downtrend, followed by some ranging movement earlier this week, before a sharp sell-off that occurred later this week. This shows that the strength of the Euro couldn’t withstand the strength of the NZD. Currently, the price is quoted around the SMA50, and below the SMA 200. The ADX 20 level is around 30. The -DI has just crossed the +DI, signaling a renewed bearish pressure.

Order: Sell

Entry date: June 6, 2011

Entry price: 1.7916

Stop loss: 1.7926

Trailing stop: 1.7721

Take profit: 1.7592

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 325 pips

AUDJPY

Primary trend: Bearish

Buyers have long been fighting a losing battle in this market. The bearish move has going slowly but surely. The trend is clearly bearish, and any upward correction would simply create a ‘sell’ signal. When you’re the first to know when this happens then you’ve the edge.

Order: Sell

Entry date: May 19, 2011

Entry price: 86.91

Stop loss: 87.95

Trailing stop: 86.91

Take profit: 80.95

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 148 pips

Conclusion: Trading the financial markets isn’t a bed of roses, neither is it picnic. It requires much time, effort, and dedication, as well as patience and realistic expectations.

If you can do this, your patience would be richly rewarded, and in time you’d see the results.

This update is ended with quotes from Ryan Schofield:

1. “You don’t need to know for certain what price will do next to make money from trading – leave predictions to the analysts and focus on keeping the probabilities in your favor.”

2. “Trading is a game of probabilities, with every trade decision, you’ve to ask yourself: ‘What are the probabilities of this trade reaching my profit targets over my stop loss?’ ”

3. “The less you get caught up in attempting to ‘hit home runs’ or pick the big winners, the more enjoyable and profitable trading becomes.”

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.

Saturday, June 4, 2011

Monthly Trading Report (May 2011)

“… There’s a way to know exactly when to exit and how much you’re willing to accept. More importantly, the [market] can gap as much as it wants, but you’d lose only the predetermined amount you decided upon when you entered the position.”- Jim Augustine (square brackets mine)

Hello:

It’s been decided that I’d report my trading results on monthly basis, especially the trading results from the strategies I use to give my trading signals. These trading strategies are used on the accounts made accessible to my clients who see how I open trades and manage them, and thus trade accordingly. The trading results from my weekly trading update wouldn’t be included because I’ve already made references to them in my articles.

The USDCAD Hedging strategy account grew by 1.6% last month. You know how much this would be if you were managing millions of dollars. This strategy, which is non-directional and suitable for passive investors, ensures that profits are made regardless of market directions. The USDCAD is a slow pair which mayn’t experience upwards or downwards moves of up to 150 pips for many weeks in a year. This characteristic allows very slow but steady growth on my account on annual basis.

The Gap Trading strategy has been modified to give more and better trading signals (this modification would be explained in a future article). The strategy account grew by 3.2% last month, excluding open profits. This 3.2% increase resulted from around 640-pip gain since I use 0.01 lots for each $2000 in the account. If this risk was increased fourfold, the account would’ve grown by 12.8%. But this kind of risk is too high for me. I’m a funds manager, not a gambler: little drops of water make a mighty ocean

If one uses high risk, one might see one’s trading account sailing thru the air in one period. The next period the account would be plummeting to the ground. Behold the trader (using high risk) that suffers heavy losses with the most hyped and the supposedly best strategy in the world! Behold the trader (using low risk) that survives and makes profit with a terrible system!

This issue of risk management bears repetition. It’s true that there’s no such thing as risk-free trading, and that’s why the risk MUST be managed. Always put capital preservation, not profits, first

In 2008, Dr. Van Tharp declared in an interview that, with a terrible system, you still have the chance to meet your objectives through position sizing. When you have a superb system but don’t understand position sizing, you probably won’t meet your objectives. Picking the right entry prices has nothing to do with trading success and neither do amazing trading systems with high percentage wins. It’s evident that if traders would be more interested in sound position sizing techniques that work, the experience of many traders would change for the better. Doing so, you can escape many trading woes and anxieties that majority of traders suffer today.

Satisfaction outweighs the sacrifice when attempts are made to apply sound risk management.

You may consider signing up for my trading signals services and see how I survive the markets uncertainties and move ahead gradually, and do so along with me. You can do that here: http://www.fxinstructor.com/en/analytics/ituglobal

Also, the team at Fxinstructor.com now concentrates their efforts on helping traders make progress to the greatest extent possible. There are immense benefits in taking advantage of their services. You’d be glad you do so.

NB: Please watch out for my coming articles with these titles: ‘Resist the Lure of High Risk – Part 3’ ‘Is There Really the Best Time to Trade?’ ‘Carrying Out Stealth Raids in Weak and Strong Markets,’ ‘Worst-case Scenarios’, ‘Effective Swing Trading in Forex’, ‘Advanced Gap Trading’, ‘3 Recent Gap Trades,’ ‘Trading for a Livelihood,’ ‘If I Were a Trading Neophyte…,’ ‘Developing the Right Attitude towards Losses (Part 2),’ ‘The True Holy Grail,’ ‘Achieve Success through Sensible Risk-to-reward Ratio (An Interview with A trading Enthusiast),’ ‘Monthly Trading Report (June 2011),’ etc.

This report is ended with more quotes from Dr. Mircea Dologa:

1. “Even if you’re a lucky fellow, and have discovered either by your own study or thru mentorship, the most consistent and symbiotic trading technique, there remains the problem of assimilating and practicing it.”

2. “A professional traders has a few emotions. Many readers would be surprised to hear this, but we’ll mention the word ‘confidence’… and they’ll understand it rather quickly. Nothing can be done without it. No trader will use a trading strategy without having a full confidence in its efficiency. But it’s hard work to acquire confidence. It takes many months, even years to get acquainted with the optimal tools that you’ve tested and which are prone to give the best trading results. Confidence is a rare friend that once acquired, will assist the trader day-after-day.”

3. “You attitude is based on the confidence that you have in your store of experience. Keep in mind that slumps and joys are two indispensable emotions in trading process. Being under pressure shouldn’t change this attitude. At the end, there’ll always be a new day and the sun will rise again. But keep one thing in mind: preserve your capital by holding to the rules concerning the ‘tiny bits’ stop losses.”

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

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

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

Friday, June 3, 2011

Weekly Trading Update (May 30 - June 3, 2011)

“You can't know exactly what will happen, but as long as you have properly managed risk, a losing trade isn't fatal.” - Joe Ross

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 4-hour charts, looking at the trend. 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 I’m stopped out. 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.

In addition, the competitive financial markets system produces not only winners who prosper but also losers who suffer. Traders survive and prosper only when they take trading ideas that work serious. Could the traders that are prosperous be encouraged to help those who are still suffering in the markets?

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

AUDUSD

Primary Trend: Bearish

Bullish attempts have been constantly rejected on this pair. There’s a strong resistance at 1.0750, which must be broken sharply for the upward trend to resume. If not, the downward trend would continue.

Order: Sell

Entry date: May 20, 2011

Entry price: 1.0662

Stop loss: 1.0765

Trailing stop: 1.0662

Take profit: 1.0065

Exit date: May 27, 2011

Exit price: 1.0662

Status: Closed

Profit/loss: 0 pips (breakeven)

NZDUSD

Primary trend: Bullish

The Kiwi is very strong at the present, and I’ve a long trade on it. There’s a retracement which may be a new opportunity for buyers. However, if the retracement proves to be the beginning of a new trend, then I’ll close the present position with a small loss, looking for a way to go short. It’s that simple: if the price is rising, go long. If the price is falling, and the trend is bearish, then sell and sell short.

Order: Buy

Entry date: May 30, 2011

Entry price: 0.8156

Stop loss: 0.8058

Trailing stop: N/A

Take profit: 0.8758

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 9 pips

EURCAD

Primary trend: Bullish

The resistance at 1.3900 was challenged successfully – something that has resulted in a strong northward move. This upward move has resulted in a visible bullish trend. The trend is still early enough to be taken advantage of. I have a long trade on the cross.

Order: Buy

Entry date: June 3, 2011

Entry price: 1.4158

Stop loss: 1.4058

Trailing stop: 1.4158

Take profit: 1.4747

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 147 pips

EURAUD

Primary trend: Bearish

The trend on this cross still remains bearish, though the price has shot up. My last trade on it was stopped out with a good profit. If the present scenario continues, the primary trend may turn bearish. This depends on some fundamental factors; things that are interlaced.

EURNZD

Primary trend: Bearish

The price is trying to trudge to the upside, but this looks limited. If the Euro fails to maintain the presently precarious supremacy, there’ll be sharp sell-off on this instrument. Currently, the price is quoted above the SMA50, but still below the SMA 200. The ADX 20 level is above 30. The -DI is below the +DI, indicating a bullish pressure.

AUDJPY

Primary trend: Bearish

The price has been caught in what looks like a kind of zigzag movements. The price would threaten to rise, only for it to fall. The market seems quiet now, considering the coming NFP release. When this kind of release is expected, the markets are usually in graveyard silence ahead of the news.

Order: Sell

Entry date: May 19, 2011

Entry price: 86.91

Stop loss: 87.95

Trailing stop: 86.91

Take profit: 80.95

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 67 pips

Conclusion: Even though trading ideas that work sound simple, putting them into practice and benefiting from them is quite another matter. Traders could spare themselves many financial woes if only they’d endeavor to follow these ideas.

This update is ended with a quote from Dr. Woody Johnson:

“If you choose to avoid all pain and discomfort, and remain in the comfort zone, you will never experience growth. It cannot happen in the comfort zone.”

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.

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.