“Only trained eyes can see what the financial markets have to offer.” – Naspoz
Hello:
Often and often, there are great similarities between trading and other areas of human endeavor. Many of those who succeed at their careers love what they do and are ever ready to spend their energy, time and resources to achieve goals that tend to elude an average individual. Very few of them have financial gains as their top priority. Many beginner traders are quickly attracted to trading and tend to think it’s very easy to make money (because they think the secret to riches lies in some newly-purchased trading system/software). It’s very common for traders to say they love trading at first – having great faith in their trading strategy. Nevertheless, it’s difficult to make money consistently in trading simply because the human mind isn’t wired to do the right things in the markets. It’s also sure that your passion for trading would be seriously tested by the financial markets. If money is your only objective in anything you do, you’d quit when you face great hindrances. Are you motivated to make money? This is an inverse attitude because the best traders/investors aren’t motivated to make money; they’re motivated by drive to be the best or by the joy of trading or by the desire to work on themselves.
Below is the summary of some of my trading activities this week.
AUDUSD
Primary Trend: Bullish
The strong resistance at 1.0800 easily rejected the advance of the bulls. Since then the price has zigzagged down. It’s obvious that the Aussie is running out of stamina. The trend may turn bearish at last, and therefore I’ll go short anytime from now.
NZDUSD
Primary trend: Bullish
My long trade was exited at breakeven during a short-term sell-off on this pair. The possibility of northbound continuation seems intact, but I’m not dogmatic on this point.
Order: Buy
Entry date: June 30, 2011
Entry price: 0.8265
Stop loss: 0.8157
Trailing stop: N/A
Take profit: 0.8857
Exit date: July 12, 2011
Exit price: 0.8265
Status: Closed
Profit/loss: 0 pips (breakeven)
EURCAD
Primary trend: Bearish
I’m looking for a short trade in this market; either later today or early on Monday. Based on the past price actions, it makes a lot of sense to sell a rally in a vivid downtrend, especially with the expectation of more weakness in the Euro.
EURAUD
Primary trend: Bearish
Later today or earlier on Monday, I’d go short on this cross. It’ll just be a sell-on-a-rally approach; just like the EURCAD. The price is trying to consolidate, and one of the most reliable entry methods for many, many years has been the breakout of an area of consolidation.
EURNZD
Primary trend: Bearish
It’s hard to tell when the downtrend will end, when a weak currency is pitted against a strong one. The price is quoted below the SMA50 and SMA 200. The ADX 20 level is pointing around 50, suggesting that the trend is very strong, but may be temporarily stalled. The -DI is also far above the +DI.
Order: Sell
Entry date: June 30, 2011
Entry price: 1.7531
Stop loss: 1.7649
Trailing stop: 1.7381
Take profit: 1.6949
Exit date: July 11, 2011
Exit price: 1.6949
Status: Closed
Profit/loss: 582 pips
AUDJPY
Primary trend: Bullish
I had to go short on this instrument. There’s been a serious threat to the bullish bias, and this is expected to continue, which would soon force the primary trend to turn bearish. Only a very small portion of the portfolio would be exposed; something that goes against the mindset of the starry-eyed trader.
Order: Sell
Entry date: July 12, 2011
Entry price: 85.42
Stop loss: 86.46
Trailing stop: N/A
Take profit: 82.46
Exit date: N/A
Exit price: N/A
Status: Open
Profit/loss: 49 pips
Conclusion: An average person doesn't have a chance at profitable trading because he or she concentrates on all of the wrong things. You won’t learn the real secret of trading success watching the financial news, reading financial magazines, or reading the mainstream financial newspapers, because the media will totally ignore the most significant aspects of trading success. But you can learn it by studying risk management principles. You must learn little-known, closely-guarded secrets that are not published in books and that you’re not likely to find unless you accidentally stumble upon them.
The article is ended with helpful quotes from Joe Ross:
1. “Trading and investing decisions are often driven by fear and greed… When we are greedy, we tend towards buying. However, it's a little more complicated than that. Regret and hope also come into play. We may buy and sell to avoid feelings of regret, or may hold on to a losing position out of denial and a fruitless hope that a loser will turn around.”
2. “Other emotions have a more indirect influence. Due to inattention, we may make a trading error. For example, when we are tired or frustrated, we may act too soon or too late. Similarly, during a serious drawdown, it's hard not to feel a little depressed and frustrated to the point that we just want to give up the whole business of trading or investing altogether.”
3. “The impact of common emotions of fear, greed, hope, and regret may seem obvious to many. But it's possible that incidental emotions elicited by events that have nothing to do with the markets may bias our decisions. It just goes to show that trading is a psychological endeavor. Keeping extreme emotions at bay is paramount. The more we can stay logical and objective, the more we'll trade profitably.”
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
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.
No comments:
Post a Comment