“A
very conservative position sizing strategy can generate great results. For
instance, you could risk ¼% equity per trade and generate something like a 60%
return in a year through the effects of consistent results and compounding.” – Ken Long
Last month, prices broke previous highs in an uptrend,
whereas falling instruments broke previous lows. This makes it appear that no
kind of bias can last forever, and this kind of velocity could be stalled
during market equilibrium. Analyzing with indicators apart, trading biases are
vividly seen on the charts. This is a good way to recognize trends. When prices
trade apart in negatively correlated markets, they emphasize what indicators
also signal. Based on the happenings of some chart patterns, an uptrend
possibility is made available (for instance, a market plunges while the
indicator on the chart points up). These kinds of patterns show that the plunge
in the price may be short-lived as this may occur around great demand or supply
zones. Besides, some hidden patterns are just what they are – hidden patterns.
These are what underline the validity of a trend and proffer a great
probability of a good trading signal. It’s known that a form of analysis in
which indicators rise portend the bulls’ supremacy and bullish pressure
pertaining to the kind of timeframe used. When a form of analysis in which
indicators plunge on a chart, it portends overall bearish bias in the kind of
timeframe used.
Below is the summary of some of my trading forecasts this month:
AUDUSD
Primary
trend: Bullish
This
pair rose by more than 600 pips in the month of June. We are still very much in
the bullish bias – though it’s not uncommon for the price to pull back to some
support zones, and therefore giving excellent opportunities for buyers to go
long. With the ADX 20 and the MACD currently showing a Converging Pattern, this
propensity may be grounding to halt since the ADX itself is below the level 30.
AUDJPY
Primary trend: Bullish
This cross rose in the most past of the
last month – something that has continued till the time of writing this
article. We have a Converging Pattern as well on the Daily chart (The ADX line
is below the level 30 as the MACD signal line has crossed its zero line to the
upside, staying there). It is likely that this propensity would continue,
especially if the Yen shows more weakness.
EURNZD
Primary
trend: Bearish
Since
the beginning of June 2012, this exotic cross has fallen by more than 900 pips;
a great bearish trend indeed! No doubt, the EUR still continues to be weakened
against the NZD as we have some Confirmation Pattern. The ADX 20 is showing a
strong trend and currently above the level 45 (–D1 is below +DI), and the MACD
is clearly bearish. I would like to go short at an appropriate price.
EURCAD
Primary trend: Bearish
The price
development on this market has not been very much interesting – especially in
the recent times. However, the trend last month was bearish (but slightly).
From the monthly high of 1.3031 the price reached a low of 1.2742: a mere 280
pips (approximately). The price has continued to fall this month as the price
is becoming gradually weaker. We have a Divergence Pattern on the chart and
this could just be the beginning.
AUDNZD
Primary trend: Bearish
Although the Aussie was generally weakened against the Kiwi
last month, the price movement remains sluggish and undecided. Last month, the
price reached the level at 1.2661 and has been rising gradually since then; but
this could be a trap. The ADX line is below the level 30 (the MACD is still
showing some weakness in the markets). Even the ADX +DI and –DI has been
undecided, as the price seems to be rallying (albeit weakly). It’s better to
stay out of this market now.
GBPCHF
Primary trend: Bullish
This cross has been a kind of difficult to predict in
recent times, owing to the manipulation going on the CHF itself. Strictly
speaking the last month was bullish; but not that much. The price velocity was
below 300 pips last month, and in this month, the price has been indecisive so
far. We have a Converging Pattern right now and the price may stubbornly move
up a little bit before finding the next turning level.
Conclusion: While we assume our trading
stance for this month, we would do well to remember some costs that can be
incurred while trading. For instance, accurately
calculating price slippage, spreads and other speculation-related expenses may
seem to be a challenge for most trader, especially when using some trading
software. In most cases, we would be better off if we think of our trades in
terms of pips and percentage returns or drawdowns – rather than in terms of
deposit or base currencies. Nonetheless, in the course of their long-term
career, many traders have become aware of this challenge and can tackle it with
some touch of professionalism. We
would also need to pay attention to the fundamental figures coming out the
world over. These figures are only ignored at our own risk.
As it’s my habit, his article is ended by
the helpful quotes below:
“The typical novice trader thinks that part of successful
trading is actually pulling the trigger as often as possible. They usually
believe that the more they trade, the more they make, which in reality couldn't
be farther from the truth.” – Sam Evans
“Keep in
mind that events don't make you afraid. It is the interpretation of those
events that makes you afraid. You are scared because you mentally believe that
you are about to get hurt, there is no way out, and that there is nothing you
can do. If you were to think instead, "I'm not going to get hurt, I have
several alternatives I can pursue, and there is a lot I can do to get out of
this," you wouldn't feel fearful at all.” – Joe Ross
If you want to receive permanently free winning Forex
trading signals, please send me an email titled: “A Request for Free Trading
Signals.”
Your questions and opinions are highly welcome.
Thank you.
With best regards,
Azeez Mustapha
Forex Signals Strategist, Funds
Manager &Coach
Yahoo! Messenger ID: saazalmu
If you want to receive permanently free winning Forex
trading signals, please send me an email titled: “A Request for Free Trading
Signals.”
NB: There is risk of loss in
trading, but it is possible to be a successful trader.
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