Adsense

Saturday, January 28, 2012

Unlock the Power of Everlasting Triumph in the Markets - Part 1

YOUR MINDSET MATTERS

"Are you trading to learn or are you trading to earn? …Having goals based around financial outcomes when you’re still learning the basic skills of trading can actually be counter-productive. If you have expectations of earning from trading while you’re still learning, then it shouldn’t come as a major shock when you fail to meet those expectations! …There’ll come a point when you’ll be required to commit fully to your trading business. A time to narrow down the options, focus on what have been working for you and conduct your trading as a full time business.Paul Wallace

Hello:

I’d tried all the logic I knew, still, my trading results were not improving. In fact, my trading performance was getting worse. Those who thought I was good at trading had seen that I couldn’t handle the market. I’d received a brief training and practiced briefly. Having breathed the market prior to that time, I fought stubbornly and desperately, but I was floored. I slumped in the presence of those who thought I was a champion. My condition was very pitiful. I thought of giving up. “Those consistently winning traders must be gods. They must have superhuman ability. I wasn’t cut out to be like them.” I concluded. However, what would happen to me if I gave up? I’d need to subject myself to the harsh realities of the labor market. Should I accept failure and go do something else, like every Dick and Harry? Should I press ahead on my way to success? What should I do with my life? This happened to me many years ago.

Yes, there are successful traders, but they aren’t gods. They’re only humans; just like you and me. I knew I must discover what they do differently and do so accordingly or else I’d be in trouble. True, there are successful traders and they have something in common. Consider Anton Kreil who was born in a poor family, for instance. Kreil is a professional trader formerly of Goldman Sachs, Lehman Brothers and JP Morgan. While at university and by the age of 20 he built a profitable portfolio and was hired by Goldman Sachs to work on Wall Street, later returning to London to trade on their Long/Short Pan European Equities desk. At the age of 26 Kreil was a vice president of JP Morgan European Equities. He retired from the Investment Banking industry at the age of 28, and after traveling the world, returned to London in the summer of 2008 to film the BBC T.V. program “Million Dollar Traders.” 8 novice traders were provided with training and $1 million to trade during the financial crisis. They outperformed professional hedge fund managers by 4% over the 2-month period. While most of the contestants couldn’t handle the pressure and were either fired or resigned, the show proved that normal people can actually trade on par with the professionals given the right instruction. The show was aired in 2009 and received global cult status, reaching territories as far as Australia, catapulting Kreil to limelight during ensuing crisis. Kreil would soon be touring the space.

Many people admire and appreciate highly successful people. But they find it difficult to do what those successful people did (persistently and consistently) before they could become what they’re. I’ve seen multitudes of people reading popular and best-selling inspirational and motivational (self-help) books, but their life remains the same. It seems those books are making money for their authors, not for their buyers. Why? People would read or listen, yet they won’t change their mindset. Reading and listening are easy, whereas doing isn’t easy. You mustn’t put money first in what you’re doing in life. If money is your prime target, you’ll get discouraged in face of the challenges that must come your way. This is also true of trading. Fear often shows up in us when we’re at risk of losing money. When fear takes over, it cripples us emotionally and saps us mentally. A fearful spirit is more vulnerable to the enemy (irrational emotions), which tempts us to compromise sound trading convictions and to do things according to our emotions.

Can you do what successful people do? Think about those great general overseers/superintendents. I think of a general overseer who had a very humble beginning. I think of his innovations, wisdom, enthusiasm, tireless activities for the sake of his organization, laying peerless examples, preparing sermons on day-to-day basis, writing books and articles, and doing things that most members of his organization are unable or unwilling to do individually in their own small world. Many of those general overseers/superintendents have been enthusiastically active for decades. No wonder success must locate them. They must have extraordinary achievements. They have been richly rewarded and are the envy of mediocrities. These great overseers/superintendents began like you. They possessed what you posses; the difference is that they made use of what they had in unique and enthusiastic ways. They’d no advantage over you in the first place; only that you feel unable or unwilling to do what they can do. If you don’t discover the seed of greatness in you, you could spend the rest of your life as a traffic man for their organization. Many people who’ve permanently limited themselves to being followers have seeds of leadership in them. Does your overseer/superintendent recognize your ability? It takes humility to recognize that someone under one’s oversight may have a better way of doing things than one does. But then again, no one – not even an overseer – has a monopoly on good ideas.

Life starts where your comfort zone ends You got to achieve extraordinary things before people can believe and respect you. Are you satisfied with your present lot? You oughtn’t to pretend that everything is alright when it isn’t. You should be able to reveal your weaknesses in order to find strength rather than conceal your faults to appear strong.

It Isn’t Late To Experience Permanent Victory

I’ve always said that trading myths have infected the human society. Do trading myths match the real facts? The answer is worth knowing. Why? Because the truth about trading can free you from needless fear, brighten your outlook on your future in the market, and influence the way you think about trading. Very few top traders would reveal the secret that gives them a huge edge over other traders. In a sense, trading in the market is like playing a game of poker; a really big game of poker. The players (at least, the good ones) attempt to keep their cards close to the vest. Think about it. The worst thing you can do in a game of poker is to show your opponents your cards. If you do, they’ll know when they should bet and when they should fold. Nonetheless, here’s the good news: The secret is available to you free of charge. In the series of articles bearing the main topic above, the secret would be revealed systematically. “I used to blame the markets for my lack of progress in trading,” one trader admits. “However, in time, I realized that I’d to make effort too.” You need to realize that the time has come for you to act. You need to learn and apply the principles that will ensure your everlasting triumph in the markets. You need to learn how to avoid margin call permanently. You need to learn how to pull out returns from the markets on annual basis – no matter what happens in the markets. You need to know how to trade with calm and lasting peace of mind. You only got to change your mindset. You need to empty your past bad trading experiences and develop winning trading mindset.

Many people have passion for trading, but they don’t understand how the markets actually work. In time, many traders learn that if they confront the issues that are impeding their success, they’ll usually feel better about themselves and their trading. Here, I’m not talking about trading styles that’ll make you smile today and cry tomorrow. Unlocking the power of everlasting triumph in the markets might require the utmost patience on your part. But payoff – permanent victory – is worth it.

Conditioning Your Mindset

How do you take control of your destiny in the financial markets? You’ve to repeat what you must do as often as necessary until they become part of your subconscious mind. You’ve to remind yourself of these constantly until they become your second nature. You’ve to say them to yourself repeatedly until you start reacting to them automatically. Personally I’ve reached a level of complete calm, peace and serenity in the markets. I know what to do when placing trades and managing trades – whether they’re negative or positive. My positive reactions to market situations now come naturally and automatically. You can use your willpower to achieve this. Just declare to yourself what must happen to you in your trading career and they’ll come to you eventually. This method has proven to be highly effective! If you liked, you might recite the points below (every morning) for the next 30 days. You’ll eventually discover that your willpower would override negative, irrational and suicidal emotions and trading styles. You’ll naturally do the right things and be rewarded eventually. You’ll ultimately discover that you’re trading effortlessly; with positive returns in the long run.

Please recite these points in quiet surroundings:

1. I, Mustapha Azeez (mention your name) will surely be one of the best traders in the world, and nothing will stop me from achieving my aim.

2. My past flops are not part of me. They happened, but they’re not me. I’m not a failure. Trading failure isn’t part of me.

3. I couldn’t care less whether losing and breakeven traders are 90% or 95% or 98%. What I know is that I’ll be among the 10% or 5% or 2% winning traders. Nothing will preclude me from joining this group.

4. Others may find trading very hard, but it’s not going to be hard for me. The difficulties and uncertainties in the markets will be my permanent ally. All future uncertainties and unpredictability of price movements will work in my favor in the long run.

5. I totally reject all forms of discouragement from those who thought they failed in the markets or who think they know those who failed. My lot as from now is with successful traders.

6. As a trader, my future trading results will be a testimony to others, including doubting Thomases and detractors. So shall it be.

7. Financial freedom is the ultimate reward of my journey as a trader. Noting will prevent me from attaining this noble goal.

8. As a trader, I’ll be a blessing to my family, my friends and others. I’ll be a blessing to the trading world. This will come to pass.

9. I’m going to choose only positive expectancy trading systems, and nothing more. Positive expectancy has worked in the long past, and therefore it’ll work for me. It’s stood the test of the time, and it’ll work for me. It’s been practically effective for over a century. It’s survived all market types and conditions, and it’ll work for me.

10. I expect losses in trading, but they won’t last forever. My losing streaks are temporary. I believe that, through positive expectancy, I’ll always recover my losses and move ahead in the long run. This is a timeless fact and it’ll always work in my favor.

11. What I’m going to learn from the articles in this series, not in abstract terms, but concrete terms, will work for me. The knowledge will be my power to achieve permanent triumph in the markets.

12. Lasting solution to my trading problems begins right now. The solution starts coming to me right now. This is my will, and it’ll come to pass.

13. I’ve decided to trade only what I see; and nothing more than what I see or what I think will happen.

14. As a trader, I will have peace of mind, calm and tranquility – knowing that my risk is constantly under control.

15. I, Mustapha Azeez (mention your name) will never trade without stop loss. I’ll honor my stop levels always and never widen them. This is my permanent insurance policy in the markets. Nothing on earth will ever make me run my losses. If I’m stopped out of trades, I’m stopped out. This is my will and it’s so.

16. I’ve decided to give safety priority over profit. I’ll always use small position sizing. I’ll consider this before I open my orders. Nothing will tempt me again to use big position sizing. I hereby declare myself free of greed.

17. No matter what happens, I won’t cut my profit prematurely. I’m determined to run my profit until my breakeven stop or trailing stop or target is hit. This is my will and I’ll do it.

18. My breakeven stop and trailing stop won’t be too tight as to cause premature exits; neither will they be too wide to cause too much exposure. I’ll always use optimum parameters as they’ll be revealed.

19. I hereby decide to follow my time-tested trading plan. I’ll let profits take care of themselves. I’ll be satisfied with whatever profit I earn on annual basis.

20. I’m totally free. I’m no longer a trader that’ll be glued to the screen, running mental because of price fluctuations. I’ll use the minimum time possible trading and achieve commendable results. This is my will and I’ll do it.

21. I’ve begun my journey to lasting success in trading. All the above declarations are solemn: they’ll be observed solemnly.

Conclusion: In your future trading activities, view challenges as something that’ll strengthen and sustain you. The second part of the articles in this series would be made available at the end of February 2012.

NB: Even in the presently turbulent market, you can experience permanent safety and victory from correct knowledge of trading, risk control and self control. If you’d need further information or you’d like to have a professional attend to you, please contact FXInstructor.com.

I’d prefer to conclude this article with a quote from Dr. Woody Johnson:

“Humans are impulsively driven by greed and the desire to dominate. They will take the easiest way to get and keep what they want. This often has negative and unintended consequences that are frequently destructive. And humans are not naturally prone to accountability or self-discipline, which is why we need laws, rules, boundaries and limits in society. Trading requires self-imposed limits and these limits must be created through personal accountability.”

NB: Please watch out for my coming articles with these titles: ‘Does High Hit Rate Work Always?’ ‘My Typical Trading Day,’ ‘A Trader’s Trick Entry Technique – Sighting Golden Trading Opportunities,’ ‘Making Money out of Losses – A Blessing in Disguise,’ ‘Achieve a Better Hit Rate with Gap Trading (Using the Logic Yourself),’ ‘Play the Markets Victoriously with Nano-cent Accounts,’ ‘Why It’s Difficult to Do the Right Things in the Markets,’ ‘How to Identify a Sideways Market – Be Safe!’ ‘A Negative Expectancy System – Pushing Against the Wind?’ ‘Trading Signals,’ ‘An Intraday Moves Catcher – A Wealth Generating System,’ ‘Unlock the Power of Everlasting Triumph in the Markets (Parts 2 - 12),’ ‘How to Handle Uncertainties in the Markets,’ ‘The Issue of Stops (Come Back! Oh Come Back!),’ ‘A Hedge Funds Strategy,’ ‘My Hedge Funds Strategy Update,’ ‘Experiment with Different Exit Tactics,’ ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple Positive Expectancy System – Trading Effortlessly,’ ‘Testimonies from My Subscribers (2),’ ‘Resist the Lure of High Risk – Part 4’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Gap Trading Revisited,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses - Part 4 (Losses Aren’t Abnormal),’ ‘The True Holy Grail – The Long Sought for,’ ‘Forex Trading Vocabulary,’ ‘ Clarifying Some Issues – Part 6,’ ‘Navigating Turbulent Markets – A Double Timeframe Analysis,’ ‘Before You Open that Trade,’ ‘Cogent Trading Biases,’ ‘Overview of My Signals Strategies - Can You Become a Super Trader?’ ‘Winning Trades, Losing Trades,’ ‘Uncertainty Has Become My Ally – An Interview with a Dogged Market Speculator,’ ‘The Cost of Discipline,’ ‘Monthly Market Review,’ ‘I Can’t Express How Grateful I’m to You!’ ‘Yearly Trading Update (2012) – The Big Picture,’ ‘What We’ve Decided to Do in the Markets - Trend Following It Is!’ ‘Annual Trading Results (2011) – I Was Perfecting My Trading Skill,’ ‘Monthly Trading Report (December 2011),’ etc.

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Thursday, January 26, 2012

Weekly Trading Update (January 27, 2012)

“It’s important for a trader to have a solid approach and clear setups, which he then trades consistently without giving much thought to each individual trade. Since we’ve developed and internalized these setups, we can trade consistently.” – Philipp Schroeder

Hello:

The currency market’s incredible growth has done little to change the ratio of winning to losing traders. The majority still lose most of the time, and they still don’t have to. Reading some books, buying a charting program, opening a brokerage account and starting to trade isn’t a trading business plan. Random reinforcement (as it relates to harmful trading practices) occurs when a trader attributes a random outcome to skill. It’s especially harmful if a neophyte who wins a few trades, without a plan, continues to trade without realizing the losses until it’s too late. Sorry, this is not to sound bumptious or cast aspersion on beginner traders. Emotions and ego make it difficult to change our behavior patterns. As I’ve talked about it before, the art/science of trading can be broken down into three key components: 1.) A set of high probability indicators/strategies that generate high probability trades. 2). Consistent execution of those trades. 3).Successful management of those trades. Speculators ought to carry out the foregoing with unflinching pertinacity. Whether you’re developing your own trading system or following along with a successful trader, using stops and safety parameters will help you develop good trading habit.

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

AUDUSD

Primary Trend: Bullish

Yes, the outlook on this pair remains bullish. The market has moved tremendously to the upside. It pays to wait for a price retracement before entering long. As the price is retracing right now, I’m looking forward to entering long at a support level. Guess what that level is?

NZDUSD

Primary trend: Bullish

Like its AUDUSD counterpart, the movement on this pair is also bullish. I placed a ‘buy’ order earlier this week and it’s now positive (having achieved a 130-pip movement). The stop was moved to breakeven – in case something drastic happens in the markets. Bad news can be another hint. If the relevant currency was affected by good news in the past, but suddenly there’s bad news. That as well could well mean the end of an existing trend.

AUDNZD

Primary trend: Bearish

This bearish cross isn’t looking attractive right now, and I’ll have to stay out of the market as a result of this. The SMA 50 is below the SMA 200, while the price is hovering around the former. The RSI 14 is still winding around the level 50. The Stochastic 14,3,5 didn’t get to the overbought zone in it’s recent move and is heading down. Sitting on the fence remains the best decision for now.

EURCAD

Primary trend: Bearish

The bullish movement that started last week still continues – something that threatens the current bearish outlook. You shouldn’t be beguiled by the price moves! This market is consolidating at this moment; plus I might set a Buy Limit pending order in an attempt to buy low. Even if there’s another slippage, my position can still go positive. Slippage is the difference between the price at which we wanted to have our order executed and the price where it actually did get executed.

EURNZD

Primary trend: Bearish

In the presently consolidating move that has resulted from a minor bullish correction, the market seems poised for another major leg down. The SMA 50 is far below the SMA 200 while the price is hovering around the former. The ADX 20 is around the level 15 – showing a directionless market. +DI and –DI are intertwined. This gives no conspicuous direction, but it’s clear that the strength of the Euro can’t withstand the strength of the New Zealand dollar at the moment.

GBPCHF

Primary trend: Bearish

The threat to the previous bullish scenario prevailed eventually. Those who sell higher are in for a nice ride down. But the level at 1.4300 looks like an adamant support. If price is able to break that level, the bears’ stamina will be renewed. Just play safe, ride the trend and avoid a margin call. Someone said that his kids and their husbands and grandkids have all managed to stay out of jail all their lives. Have you ever managed to stay away from margin call in your entire trading career?

Conclusion: Extensive observations of historical data have revealed that it isn’t unusual for market efficiency to diminish at times. This usually occurs when there’s high insecurity, and the market needs some time to collect new information before prices properly reflect the changed condition. However, this uncertainty can only offer high rewards to traders who’re willing to take risks, especially in the near-term. But note that without a professional trading plan and conservative risk control measures, there’s no chance for long-term survival in such ever changing market ambience.

I’d like to conclude this article with a quote from Sam Seiden:

“The day someone decides they are going to pursue a trading career, they are typically making that decision because of the potential financial prize. In other words, they are making that decision because of the perceived benefit. What most people don't understand, let alone consider, is that they are about to step into a "mine field" of traps that have the potential to drain and destroy your bank account and your self-confidence all at once. When I look at the traders who do well and those who don't, there is an obvious observation. The group of traders who focus on the prize tend to lose money and never achieve their goal. The group of new traders that focus on the traps and risk tend to succeed and reach their goal. As always, it's one group providing income for the other; that's trading.”

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Friday, January 20, 2012

Examples of the USDCAD Hedging Trades

"For me the most important thing is intuition. The markets represent an ‘intelligent chaos’ globally. This is a fantastic idea. There’s not a deliberate intelligence in the markets, it’s more of structural intelligence. I think that the only way to have good performance in the markets and to earn money is with the help of intuition.Jochen Steffens

Hello:

Here are a few examples of recent trades that were opened based on the rules of the strategy discussed here. This is what follows the optimization of the USDCAD Hedging strategy. Developing an extensive trading system is only worthwhile if one can be sure that the trading signals of the system can be implemented in real trading. A correct trade may first go in the forecasted direction before a trend reversal. One of the first signs of a trend reversal is the breaking of an important trend line. However, the violation of the trend line mayn’t only be a signal of a change in trend; it could also be a sideways trend or a price pattern, which later proves to be a reversal or a consolidation.

The current value of a price is also something that mustn’t be ignored. Value, and its relation to price, is a matter of future price gain. Future prices will emerge from what other people do after you get filled. Any transaction is an agreement over current price with a disagreement over future prices. Or as Buffet puts it: price is what you pay, value is what you get. If value for us is determined by future transactions, it can’t be known the moment we put in our order. Only afterwards will it become clear as the position starts showing us a profit or a loss. Therefore one needs to have a strategy that can handle this kind of scenario; even if it’s a choppy market. A hedging strategy is well adapted to handle choppy markets easily. The choppy market cannot make up its mind. It often changes direction for no apparent reason – something clearly visible on many timeframes. This means investors are torn between being bullish and bearish and neither the bulls nor the bears can gain the upper hand. This usually happens during periods of no dramatic news or just before a change in the trend. This market is usually difficult to assess and trading usually produces more loss than gains (unless one uses a hedging strategy). Entry into such a market, calling both long and short trades would therefore be recommended.

A market can definitely rip higher for long time, but at some point it’ll have to rest and consolidate, and sometimes it’ll even come back down to earth and reverse all those spectacular gains. When trading with this strategy, entry should be made in the medium to long term main direction, but having the possibility of a reversal in mind. A corresponding signal and an early entry may likely return or not return to the vicinity of the stops placed.

Trade Examples

There is a need to show you some trades that were taken based on the trading method discussed here. Spreads were not considered in these examples. The trades were only on the USDCAD. They were placed on the same day and nearly at the same time.

Example 1:

A. Order: Buy

Entry date: November 18, 2011

Entry price: 1.0268

Stop loss: 0.9768

Take profit: 1.0418

Exit date: November 23, 2011

Exit price: 1.0418

Status: Closed

Profit/loss: 150 pips

B. Order: Sell

Entry date: November 18, 2011

Entry price: 1.0270

Stop loss: 1.0770

Take profit: 1.0120

Exit date: December 2, 2011

Exit price: 1.0120

Status: Closed

Profit/loss: 150 pips

Example 2:

A. Order: Buy

Entry date: September 5, 2011

Entry price: 0.9869

Stop loss: 0.9369

Take profit: 1.0019

Exit date: September 12, 2011

Exit price: 1.0019

Status: Closed

Profit/loss: 150 pips

B. Order: Sell

Entry date: September 5, 2011

Entry price: 0.9862

Stop loss: 1.0362

Take profit: 0.9712

Exit date: September 16, 2011

Exit price: 0.9792

Status: Closed

Profit/loss: 70 pips

Note: Prior to the examples shown above, a pair of short and long trades was opened on August 22, 2011. The short trade hit its 150-pip target on August 31, 2011 while the remaining negative trade later got its loss reduced to approximately -50 pips on September 2, 2011 (owing to some rally on the USDCAD). The remaining negative trade was closed after the exit criterion was met. As you can see, one trade was closed at +150 pips and the other trade was later closed at -50 pips. The closed profit was bigger than the closed loss. That is the logic. Also remember that 4-hour charts are used only for the purpose of examples. The strategy is non-timeframe specific.

A Free Gift to Interested Readers

This strategy has already been sent as a gift to my trainees and subscribers, but I also want to give it free to 20 readers only. Only 20 of my readers would get it free, and therefore, it’ll be on first-come-first-served basis (for the early bird catches the worm). After 20 copies have been sent out, no more copies of this strategy would be made available by me. This is one way of compensating avid readers of my articles. Readers now have a chance to posses this strategy. It’ll be in form of an easily understood and do-it-yourself format. It comes with simple explanation, entry criteria, exit criteria, alternative exit, stop loss, effective trade management and other valuable hints. It’ll also contain recent trades and their accompanying charts. Please send me an email titled ‘A Request for Strategy’ to get your own free copy before it’s too late.

I conclude this article with a quote from Jochen Steffens:

“At the risk of oversimplification, you’ve to turn off the mind for trading. The mind is very powerful and helpful in all areas of life, but usually not on the markets. It’s more of a limiting factor here. That’s because the mind is completely overwhelmed. During trading we have ‘voices’ in our head that recommend doing this or that or expecting one or the other movements; but the many voices aren’t only needless but counter-productive. Use your mind when you define and test a setup – turn your mind off during trading. I think that trading is approximately 80% psychology and 20% technique.”

NB: Please watch out for my coming articles with these titles: ‘My Typical Trading Day,’ ‘A Trader’s Trick Entry Technique,’ ‘Making Money out of Losses – A Blessing in Disguise,’ ‘Achieve a Better Hit Rate with Gap Trading (Using the Logic Yourself),’ ‘Play the Markets Victoriously with Nano-cent Accounts,’ ‘Why It’s Difficult to Do the Right Things in the Markets,’ ‘How to Identify a Sideways Market – Be Safe!’ ‘A Negative Expectancy System – Pushing Against the Wind?’ ‘Trading Signals,’ ‘An Intraday Moves Catcher – A Wealth Generating System,’ ‘Unlock the Power of Everlasting Triumph in the Markets (Parts 1 - 12),’ ‘How to Handle Uncertainties in the Markets,’ ‘The Issue of Stops (Come Back! Oh Come Back!),’ ‘A Hedge Funds Strategy,’ ‘My Hedge Funds Strategy Update,’ ‘Experiment with Different Exit Tactics,’ ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple Positive Expectancy System – Trading Effortlessly,’ ‘Testimonies from My Subscribers (2),’ ‘Resist the Lure of High Risk – Part 4’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Gap Trading Revisited,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses - Part 4 (Losses Aren’t Abnormal),’ ‘The True Holy Grail – The Long Sought for,’ ‘Forex Trading Vocabulary,’ ‘ Clarifying Some Issues – Part 6,’ ‘Navigating Turbulent Markets – A Double Timeframe Analysis,’ ‘Before You Open that Trade,’ ‘Cogent Trading Biases,’ ‘Overview of My Signals Strategies - Can You Become a Super Trader?’ ‘Winning Trades, Losing Trades,’ ‘Uncertainty Has Become My Ally – An Interview with a Dogged Market Speculator,’ ‘The Cost of Discipline,’ ‘Monthly Market Review,’ ‘I Can’t Express How Grateful I’m to You!’ ‘Yearly Trading Update (2012) – The Big Picture,’ ‘What We’ve Decided to Do in the Markets - Trend Following It Is!’ ‘Annual Trading Results (2011) – I Was Perfecting My Trading Skill,’ ‘Monthly Trading Report (December 2011),’ etc.

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Thursday, January 19, 2012

Weekly Trading Update (January 20, 2012)

“Remember, the definition of effective trading is not solely connected to profit and loss, but to consistent execution. Profit that is not associated with a plan and follow-through of all of your rules is profit that is not helping you become a better trader.” – Dr. Woody Johnson

Hello:

Forex trading is nothing other than speculation on certain price developments. It’s not a prognosis. One has to be careful with market predictions, yet a negative trade shouldn’t cause consternation, provided it’s being handled by an experienced trader. It often takes a lot of time and effort to analyze a situation or individual instrument. We learn thru this and increase our knowledge but this also leads to the assumption that a situation would have a likely or an unlikely outcome. Human nature leads us to choose the probable outcome and wager our socks on it. And that’s the inborn shortcoming. It’s important that we don’t take the analysis as a reality. We can speculate on the possible outcome, but we’ve to be aware that this is just that: pure speculation. Using a big position sizing because you think a particular trade must go in your direction can push you into a quandary. Risk has to be carefully considered. If you’ve analyzed something and have studied the situation very carefully or believe a story that you’ve read, you’re already in a precarious situation. Any time something looks like a too sure thing you need to step back and examine the situation again. There aren’t 100% chances in the market. You can do risk-to-reward assessment for every trade and determine a ratio but it’ll never be 1:0. Therefore you eventual success is contingent on cutting your losses and riding your profits.

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

AUDUSD

Primary Trend: Bullish

The bullish trend still continues but the market has been caught in an equilibrium zone. A break below 1.0350 may cause a turn in the trend while a break above 1.0450 might cause a renewed bullish strength. You should have the gumption to see the right direction and go with it.

NZDUSD

Primary trend: Bullish

The trend remains bullish, and it’ll be nice if one buys a dip in price as soon as one spies a rally after the dip. But if this approach fails, one would need to orient oneself with the bears. The first change of direction earns the most profit, but it’s very difficult to be first.

AUDNZD

Primary trend: Bearish

In the current bearish scenario, one might need to continue to sell every rally as it’s true of the recent historical data. The RSI 14 is still winding around the level 50. The Stochastic 14,3,5 is heading to the overbought region, paving a way for a sell opportunity. Only a trader with desultory attitudes would trade without a clear-cut plan.

EURCAD

Primary trend: Bearish

In the currently massive bearish scenario, the market seems to have bottomed at 1.2870 and has rallied by over 200 pips since then. Could this be the beginning of a new lease of bull market or an opportunity for traders to sell higher? These possibilities apply to both long and short trades – only in opposite directions.

EURNZD

Primary trend: Bearish

The outlook on this cross is similar to that of the EURCAD. The SMA 50 is far below the SMA 200. The ADX 20 is very close to the level 30 – supporting a possibility of some new bullish power. +DI is above –DI. Only time would tell if the present rally would hold out long enough.

GBPCHF

Primary trend: Bullish

The bullish trend is now seriously threatened, and if this threat continues, the trend may change completely. The CHF has gotten some renewed strength, so one would need to adjust accordingly, rather than using gut feeling. How important rally is gut feel? Did your grandpa or great grandpa ever sell tickets on the Titanic?

Conclusion: Joy and fear in trading are very easy to describe but very hard to deal with. Simply put, you should only trade if you can watch from the side lines. Any joy, fear, greed or excitement will disrupt your analytical behavior. If you are convinced that there is only one direction, it is best to trade something else. Emotions are a terrible trading companion – especially in currency trading.

I’d like to conclude this article with quotes from Dr. Brett N. Steenbarger:

1. “We pursue short-term pleasures (and avoid short-term discomfort) at the expense of longer-term rewards… It’s difficult to tolerate even normal drawdowns unless you have confidence in your methods.”

2. “These include trading slumps and increased personal expenses that change how traders trade and lead them to place P/L ahead of making good trades. By worrying too much about how much money they make, traders can no longer follow markets with a clear head.”

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Sunday, January 15, 2012

Weekly Trading Update (January 9 - 13, 2012)

“To me, this is a no contest. I want to be liberated from watching the screen for hours on end on those days where the market goes nowhere. I also want to avoid psychological stresses as the market swings up and down. On good days, price moves directly to your target with barely a flicker. On other days, it gets there through a series of price gyrations. If you watch every move, your emotions are on a roller coaster as your paper profits expand and contract. The temptation to exit a trade early is sometimes huge.” - David James Bennett

Hello:

On the battleground of the financial markets, this year’s battle has already begun in earnest and I’m determined to fight gallantly. Nevertheless, things don’t always go according to plan. You know that statistics gleaned from small samples are of little value, and also that strategies with a good expectancy are almost certain to have bad runs of several losses in succession. Such runs are simply random fluctuations in a series of results which will revert to the statistical norms in the long run. Because bad runs are to be expected, you must anticipate them when determining the amount of capital needed to play the game… An important part of any strategy is the opportunity to profit provided. A good strategy which provides few opportunities may well be a lot less profitable than a mediocre strategy which provides a lot of opportunities. Hope isn’t a strategy. Think about the casino owner, or your local bookmaker. They do not berate themselves if one of their clients has a big win. They do not change their entire business plan if they have a few unprofitable days. They do not tinker with the rules of their games after a few losses. They know the odds are in their favor, and in the long run their profits are assured. There is a difference between a marketer’s illusion and the real world. The sometimes mendacious price moves have no regards for your feelings. The percipient speculator isn’t necessarily subjected to pusillanimity. A better understanding of the currency market helps traders to manage risks associated with trading leveraged markets. Learning how to manage the use of leverage is difficult for most and many professional traders trade small size (less than 1% of the account value per trade) to minimize risks.

Some market patterns may be illusory. Most of the market participants may see a head-and-shoulders pattern where it’s not. That’s because most of them don’t know the precise definition of this pattern. Many market patterns that graphically resemble long-term patterns aren’t valid in the short-term. Patterns are valid only if certain fundamental and psychological requirements are fulfilled. For example, if a big investor wants to carefully exit at a special price, then the classical patterns develop in the daily and weekly charts – for instance, the head-and-shoulders pattern. These patterns aren’t valid intraday because there are too many false signals.

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

AUDUSD

Primary Trend: Bullish

This pair fell a little before finding a support at 1.0230. The general trend remains bullish but traders would need to find a good entry price lest they’re stopped out before the price moves in the forecasted direction.

NZDUSD

Primary trend: Bullish

Like its AUDUSD counterpart, this pair retraced a bit before finding support at 0.7860. This may provide a good buying opportunity. One may even put one’s stop around the support line 0.7800 if one is to go for position trading. This line is an important level that won’t be overcome that easily.

AUDNZD

Primary trend: Bearish

The market rallied by around 130 pips before being pushed down by a supply level at 1.3040. The RSI 14 went above the level 50 and then fell below it. The Stochastic 14,3,5 reached overbought region and is now headed down. This is a clean sell signal. However, some may want to assume a bullish position (If the Stochastic later falls below the level 20, it would add more to the bullish argument).

EURCAD

Primary trend: Bearish

Is the price move on this cross really nefarious? Not so. The trend has continued to be bearish, and it pays to sell every rally. Traders who’ve been doing this would’ve made several successful trades. But as far as risk control is concerned, one mustn’t do anything feckless.

EURNZD

Primary trend: Bearish

The outlook on this cross is similar to that of the EURCAD. The SMA 50 is far below the SMA 200. The ADX 20 reached level 82 before moving down; providing a good opportunity for short sellers. –DI, which was dominated by +DI, regained its supremacy, showing that the bears remain in control. A bullish move may be specious.

GBPCHF

Primary trend: Bullish

This instrument experienced a serious southbound move last week. It fell by over 250 pips, breaking a few support levels. The price later hit a major support zone and is now trying to move up. The primary trend remains bullish. In the present scenario, immature traders will take profit the moment they start making profit or they’ll stay in a trade long term when they start making losses thinking it’ll recover.

Conclusion: Do you remember a trade where at first you have this small adverse movement against you, before the trade finally takes off? I think every trader knows what I mean. In fact, when you open a position, costs are incurred, putting the position in the red from the start. If you can picture that, then the trade where you get stopped out before it materializes isn’t hard to imagine either. Wouldn’t it not just be cool if we could do something about this?

I’d like to conclude this article with the quotes below:

“Too many traders are not getting the results that they want, and they need to "change" something (thoughts, emotions, behaviors) in order to get different results.” – Dr. Woody Johnson

“Think of Las Vegas. Have you ever realized how much money a casino loses in a day? The number is huge, but they don't care because they know they have a plan that ensures the gains are greater than the losses, so the most important thing for them is to trade their plan.” – Sam Seiden

“One of the best ways to enforce good discipline is to ensure that when entering any trade, there are always predetermined stop and take profit orders entered and that the amount of capital you risk is at least as much as you aim to win. The only adjustments that should be made after that should be to trail the stop tighter (to minimize losses/guarantee profits) while extending the profit target. Once the action starts, you can be sure the trade will succeed or fail within the reasonable risk-reward criteria that were decided with a cool head. What’s more, when relying on orders and not staring fixedly at every tick on open positions, trading becomes a much less stressful and emotional experience.” – Elizabeth Gregory

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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

Sunday, January 8, 2012

2012 – Another Year of Victory in the Markets

“Self-disciplined begins with the mastery of your thoughts. If you don't control what you think, you can't control what you do. Simply, self-discipline enables you to think first and act afterward.” - Napoleon Hill

Hello:

Happy New Year!

The Year 2011 had come and gone - gone forever. What a difficult year it was! It was the most difficult year in my entire trading career, but I came out of it triumphantly. My trading results for the last year would soon be published. It’s no wonder that good and bad trading years produce good results, provided one does the right things in the markets. At the beginning of the last year, I told my clients and readers that we would experience losses and profits, but we would come out victoriously by making more money than we lose in the long run. And that’s exactly what happened. Did you come out of the last year’s markets victoriously? If you came out victoriously, then accept my hearty congratulations. If not, there’s no need to despair. Even though your situation may seem desperate, remember that you aren’t alone and that sadly nearly every trader is coping with the mercurial nature of the markets. While in the short term it may seem that your problem will never be resolved, trading results often do improve with the passing of time.

Sam Evans states that instead of blaming the market for your losses or your strategy, step back and ask yourself whether you are actually causing the problems by not following a plan or disciplining yourself and your actions day to day? It can be easy to think that the world is against you sometimes and that you have the worst luck around, particularly during those times when you are enduring a string of losses in the markets and every time you seem to take action, it goes the other way. I have been there and have the t-shirt hanging in my wardrobe! All I can say though is that there is always somebody else out there in a worse position than you. This is a time to look around and take pride in what you already have rather than only focusing on what you don't have. The markets are not going anywhere and you have the time to make this work.

This year, excellent trading opportunities lie ahead of us. I believe trading this year would be much easier than that of the last year. I’m ready to face the uncertainties and unpredictability of the markets and be home and dry. I just need to do the right things, and profits would take care of themselves. Are you ready to face the uncertainties of the markets? You’d need to focus, not on your past trading results, but on what you’ll gain in the future. You need a good trading quality. It’s the quality of being strong, bold and valiant – the opposite of timidity and cowardice. Being courageous doesn’t necessarily mean that we’re never afraid. Rather, a trader with rational courage takes right action in spite of fears. Successful traders have been willing to go against the crowd. Although they live in the environment where people hold mythical and negative views about online trading, they don’t let fear of what others would think hold them back from doing what they know would benefit them. Rather, they boldly take a different course in life.

Technical knowledge is a requirement but insufficient for trading success. Self knowledge enables the effective application of technical knowledge for reaching objectives. Granted, doing the right things in the markets isn’t always easy. Nevertheless, one must do what’s right in the markets, or one’s in trouble. What did I say? It’s mandatory that you discipline yourself, including having enough patience to wait for good trading opportunities. Patience is a rare and precious quality. Without discipline, you’ll achieve nothing.

Lastly, have you ever wished that someone could take your hand and lead you safely thru trading uncertainties? If so you may find solution by signing up for the services of the trading team at FXInstructor.com.

Please let me conclude this article with quotes from D.R. Barton, Jr:

1. “…A trader can have the best strategies and market knowledge and still get kicked around in the markets if s/he doesn’t apply those tools in a disciplined way.”

2. “When I talk to people who have blown up their accounts, positions that were too big for the account size have almost always entered into the conversation. Again, people have many reasons why they put on positions that are too big: they want their accounts to grow faster, they want to make up for past losses, or they want to hit a weekly or monthly profit goal after going through a drawdown. It is actually fairly difficult to blow up an account if you use proper position sizing methods—that’s actually a main part of the idea. Implementing proper position sizing models is a discipline that, when followed, grants you the gift of time: time to make mistakes in other areas and learn from them while keeping losses small enough so that you can live long in the markets.”

NB: Please watch out for my coming articles with these titles: ‘A Trader’s Trick Entry Technique,’ ‘Making Money out of Losses – A Blessing in Disguise,’ ‘Achieve a Better Hit Rate with Gap Trading (Using the Logic Yourself),’ ‘Play the Markets Victoriously with Nano-cent Accounts,’ ‘Why It’s Difficult to Do the Right Things in the Markets,’ ‘How to Identify a Sideways Market – Be Safe!’ ‘A Negative Expectancy System – Pushing Against the Wind?’ ‘Trading Signals,’ ‘An Intraday Moves Catcher – A Wealth Generating System,’ ‘Unlock the Power of Everlasting Triumph in the Markets (Parts 1 - 12),’ ‘How to Handle Uncertainties in the Markets,’ ‘The Issue of Stops (Come Back! Oh Come Back!),’ ‘A Hedge Funds Strategy,’ ‘My Hedge Funds Strategy Update,’ ‘Experiment with Different Exit Tactics,’ ‘Mastering the Market Equilibrium Zones – A Time-sensitive Method,’ ‘How I Apply Risk Management – Part 3,’ ‘A Simple Positive Expectancy System – Trading Effortlessly,’ ‘Testimonies from My Subscribers (2),’ ‘Resist the Lure of High Risk – Part 4’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Gap Trading Revisited,’ ‘3 Recent Gap Trades,’ ‘Developing the Right Attitude towards Losses – Part 4 (Losses Aren’t Abnormal) ,’ ‘The True Holy Grail – The Long Sought for,’ ‘Forex Trading Vocabulary,’ ‘ Clarifying Some Issues – Part 6,’ ‘Navigating Turbulent Markets – A Double Timeframe Analysis,’ ‘Before You Open that Trade,’ ‘Cogent Trading Biases,’ ‘Overview of My Signals Strategies – Can You Become a Super Trader?’ ‘The Cost of Discipline,’ ‘Monthly Market Review,’ ‘Uncertainty Has Become My Ally – An Interview with a Dogged Market Speculator,’ ‘2 Examples of the USDCAD Hedging Trades,’ ‘I Can’t Express How Grateful I’m to You!’ ‘Yearly Trading Update (2012) – The Big Picture,’ ‘What We’ve Decided to Do in the Markets - Trend Following It Is!’ ‘Yearly Trading Results (2011) – I Was Perfecting My Trading Skill,’ ‘Monthly Trading Report (December 2011),’ etc.

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

If you want my coming trading articles delivered directly into your inbox (I don’t support spamming in any way), you can send me an email titled “Request for Trading Articles.”

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.