“There are no formulas, no strict parameters -- just trading what you see… In truth, it would be a lot easier to let the charts tell the story.” – 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 0.5%. 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.
The more trading signals there are, the more possible there’ll be trend continuation in the near time. When the markets move perpetually in a southbound mode but with weak bearish force, speculators would merely not be inclined to purchase substantial amounts of positions, and the bears would constantly manipulate the markets to the downside. In a nutshell, a resistance level that’s getting stronger would be gaining more significance than the nearby support level while this fact continues to drive down the markets. This logic should be reserved for the bull markets.
Below is the summary of some of my trading activities this week.
AUDUSD
Primary Trend: Bearish
The kind of behavior exhibited by this pair still continues this week. There are a series of bearish moves, followed by rallies which give nice opportunities to sell dearly. I was looking forward to selling at 0.9700.
NZDUSD
Primary trend: Bearish
The outlook for the USDNZD is similar to that of the AUDUSD. Some candles here are long. A long candle with no wicks tells us that even though traders are in a profitable position, they are not willing to take profits yet. This usually means that the move still has some life left in it.
AUDNZD
Primary trend: Bullish
The current bullish outlook is gravely precarious. There are times when this cross would be caught in a long-term, predictable trend. But at this time, it’s currently difficult to trade. The rally that started last week was followed by a downward move of about 250 pips.
EURCAD
Primary trend: Bullish
Like the AUDNZD, the new bullish outlook on the pair has quickly been made unsafe. A new southbound price movement has resumed, and would continue lower if the support at 1.3800 is broken. This might make me enter short with stop loss adaptation afterwards.
EURNZD
Primary trend: Bullish
The EUR has proven to be stronger than the NZD. The SMA 50 is above the SMA 200 while the price is moving along the former. The ADX 20 has fallen below the level 20 as a result of a sideways market. -DI remains above +DI, as a result of what seems to be a pullback. It’s not sensible to take any position on this instrument right now.
GBPCHF
Primary trend: Bullish
The market price on this instrument has slowly – but steadily – journeyed upwards. But it encountered some resistance levels at 1.4250 – 1.4300 region, which resulted in correction. It’s more likely that the price would go up. Certain analysts have been bullish on this cross in recent times.
Conclusion: I use unusual pairs/crosses in my analyses because they tend to move faster and in more predictable manner than popular pairs/crosses. The majors tend to be more difficult to trade, holding out in defiance of your expectation and shooting upwards or downwards when you least expect. This is also true of the Big Picture. Once again, the unusual pairs/crosses are prone to trend better and longer than major pairs/crosses.
I’d like to conclude this article with quotes from Ed Ponsi:
1. “Sometimes, you have to make the mistake and feel the pain in order to learn the lesson. For instance, in my early days, I held onto and averaged into losing trades – classic bad trading behavior. I got away with it for a while, but the reality that what you are doing is incorrect never really hits home until you feel some pain. That is when you decide, “I will never make that mistake again.”
2. “I was not exposed to currencies until I began working on Wall Street. My style of equity trading was based on trends, using a top-down analysis. Someone pointed out that as a trend-follower, currencies would be perfectly suited to my trading style. The Forex market featured fantastic long-term trends, behaved more rationally than equities, and offered plenty of volatility, which traders need to make money.”
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
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