San Leon Energy: A Favorable Pullback in the Market

San Leon Energy stock (LSE:SLE) has experienced a pullback in the context of an ongoing uptrend. In long-term bear markets, there is always a bull market (or bull markets) somewhere, and San Leon Energy is no exception. The current pullback may proffer bulls with a ‘buy’ signal, as the analysis below shows. When this occurs, the market would smile at the bulls as it bares its fangs against bears. When this occurs, the price would rally again as sellers are forced to evacuate their positions. Extreme losses occur only when traders fall in love with a wrong market direction.

Technical Forecast

The company shares price was trending down until June 18, 2012. After that, it rose from a close of 7.32 (June 19) to a high of 13.00; a long way from that low. Exponential Moving Average period 21(EMA) and Stochastic Oscillator are used for this technical analysis. In June 2012, the price reached the EMA 21, tested it several times, before breaking it successfully on June 28. The market closed above the EMA and has been rising since then. The price was in equilibrium zone from July 23 to August 7, as the EMA forestalled further bearish pressure. The Stochastic reached an extremely overbought territory and has been retracing lower since then. This explains why the market is currently in a pullback.

As long as the price stays below the EMA (does not close below it), the current northbound bias remains valid. When this article was being prepared, the price was trading at 12. The levels that could prove a kind of difficult for the bulls are 13.00 and 13.50 (resistance levels), while the support levels at 11.50 and 11.00 would attempt to safeguard the buyers’ interests. What is happening at the moment is not abnormal, for the price does not journey in a straight line. If the Stochastic falls to the oversold territory, i.e. below the level 20, the bulls and the bears would inevitably start trading blows as the price struggles to find a new direction. Nonetheless, the price would have to rally (unless it has closed below the EMA) - perhaps at a breakneck speed.

Conclusion: Considering the conditions on the San Leon Energy stock, what is required of speculators is that they should be ready when good entering opportunities beckon. Adaptability has no limits. Obviously, secret purchases in a northbound market is far more upwards than secret purchases in a southbound market and shorting in a southbound market is far more downwards than shorting in northbound market.

This article is ended with the quote below:

“If you can catch a fundamental trend, you can make a year's pay in a matter of weeks.” - Joe

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/azeez-mustapha-technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Borders & Southern Petroleum: Buy Low and Do It Right

The price on Border & Southern Petroleum (LSE:BOR) is offering a peerless opportunities for traders and investors to go long - doing so at a very cheap price. What is happening on the market generally presages a bullish bias, as it would be explained below. In the near term, it appears that the price is dropping at the moment (something that is expected to be temporary). The markets that are particularly difficult require approaches that are particularly creative.

Technical Forecast

From what happened to be a slow but steady downward bias, the company stock gapped down on July 16, 2012. That obnoxious gap would have been caused by some adverse fundamentals: the market closed at 62.25 on July 13, 2012 and opened at 20 on July 15, 2012. What a massive blow to the bulls! It was a big loss in the value of the company shares. What normally was supposed to follow was a serious trending move in the market, but it rather started trading in a tight range, as it is vivid that the sellers cannot push down the price farther downwards as a result of a great demand zone not far beneath the price. Technically, 2 indicators are used on the chart below. They are ADX period 14 and MACD. Both of the indicators are showing what is known as a Convergence Pattern, which normally happens when sellers are getting whipped as the market is poised to begin a significant or tardy rally. A bullish engulfing candle appeared on August 23, followed by the present pullback so far in the price. Why does this suggest buying low?

The ADX -DI is beneath its +DI counterpart (buying pressure) as the ADX line itself is clearly above the level 30 - all showing a strong trend. The MACD histogram is above the zero line as its signal lines are heading towards the zero line. This is a potential ‘buy’ opportunity for bulls. The price is trading at 25.5 when this article was getting prepared. The demand zones at 20.00 and 19.50 should do a great job in containing the bears’ appetite. The near term supply zones are at 30.00 and if broken to the upside, the next target would be 30.50. As speculators, we are aware that accumulation and distribution zones would eventually be tested and violated.  

Conclusion: As it is now logical to buy low, one must not forget to do it right. In this kind of market situation, sellers would hardly be sustained, and as a result, it could lead to reduced gains for them. There exist diverse methods and probabilities in growing and controlling our equity curves. We may consider economic news, chart prognostication or mix the two of them - while adding further filter. The issue is that you have to know how to do this, coupled with a learning curve and real market condition.

This article is ended with the quote below:

“It's better to live by the old adage, "I accept what the markets give me.’’’ - Joe Ross

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/azeez-mustapha-technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Timeless Traits of Victorious Market Wizards - Part 5

“I do not care if it is a white cat or a black cat. It is a good cat as long as it catches mice.” - Deng-Xiaoping

The message borne by the articles in this series is that permanently successful traders have certain common traits. We’ve a lot to learn from them. One of them is Mark Minervini, who started speculating in the early 1980s. After several years of very poor trading results, he began to trade successfully, especially after he’d gone through a book titled: Superperformance Stocks (by Richard Love). This book wasn’t popular, but it brought about the breakthrough Mark needed in his trading career. It highlighted what winning stocks have in common. Mark sharpened his trading skill and made compounded yearly profits of 220%, in a period of 66 months. That’s we can say that he turned $10,000 to $3,300,000, according to an estimate. He’s become adept at risk control, as losing streaks don’t have any significantly adverse effects on his portfolios anymore. Roughly 15 years ago, he won a trading competition in the United States when he made 155% profit. He was one of the interviewees in the popular book titled: Stock Market Wizards (by Jack Schwager). He was also interviewed in TRADERS’ (July 2012). A few of his quotes end this article.

Traits of Successful Market Wizards

17. Victorious market wizards neither water weeds nor uproot flowers: As old as this saying may be: Cut your losses short and let your profits run, it’s a timeless truth in the markets. It makes a perfect logical and rational sense. Sadly, many traders cut their profits (for the fear that they might go negative) and run their losses (for the hope that they might go positive). This is counter-intuitive. Losses are weeds on your portfolios while profits are flowers. You shouldn’t uproot the flowers and water the weeds. Allowing negative positions to run is like watering weeds. Victorious market wizards do exactly the opposite, reversing the wrong mindset. If one of their positions is performing well and going as expected, they allow it to run for as far as possible. When a position doesn’t go in a forecasted direction, they quickly cut it short, and patiently search for another trade setup, based on their rules. You must never widen your stop loss under any circumstances, even if a position is moving against you. The price mayn’t come back to your entry level again and this would have an adverse effect on your portfolio.

18. Victorious market wizards acknowledge that profits will take care of themselves: You can’t force the markets to give you profits. You just need to do what’s right; profits will come naturally. You’d seldom trade flawlessly, though you can carry out your trading plan flawlessly. Neophytes care more about huge profits than flawless execution of their trading plans. Majority of speculators are opinionated against the realities in the markets - they feel they are correct in their opinions. It’s one of the reasons many of them don’t use stops. They want to be right. Neophytes tend to buy one new trading system after the other, instead of sticking to a particular system. If the new system experiences a losing streak (something normal for all strategies under heaven), they abandon it and go for another new system. They are just under illusion. Neophytes prefer instant gratification while brushing aside important aspects of trading victory. I realize that no matter how much you warn people, they’ll still prefer to do wrong things. Unless checked by grim consequences, the human mind isn’t wired to do right things. For example, some traders will continue to trade without stops, some traders will continue to use big position sizes in the markets that they cannot predict with an utmost certainty, etc. You need rock-solid discipline to follow time-tested trading principles that can guarantee your permanent success.  You need courage too. You just need to be courageous in doing what’s right when using your trading approach

19. Victorious market wizards can pinpoint high probability and low risk entries: Winning trading methods enable speculators to enter the markets at better prices. Victorious market wizards buy low and sell high, but they do it right. This means that they buy low in an uptrend, and sell high in a downtrend. Even if one is to sell an all time high, or buy an all time low, it’ll be after there’s a confirmation that the trend has really changed. Market wizards have various methods they use to achieve this.

20. They know where they will exit for a loss and where they will take their profit: For every trade they open, market wizards know where they’ll exit if it does not go in their direction. They also know where they’ll take their profits and pat themselves on the back, if they’re right. Every trade ought to be open with hard, physical stop loss level and take profit level, while the loss from a stop trigger would be smaller than the reward from a take profit trigger. Speculation has to do with making average winners that are bigger than average losers, and doing that consistently.  Successful traders have a deep love for trading, and as a result of this, they press on, even in a difficult market condition.

Conclusion: This is the concluding article in this series. As from next week, I’ll begin to feature renowned super traders the world over. Their strengths, weaknesses, trading beliefs and lifestyles would be discussed. This would encourage you; goading you towards your financial aims and ambitions. Instead of allowing dread to paralyze your potential, do something to move forward. Don’t be discouraged by dread. Rise up and become the master of your own destiny. Ponder about victorious market wizards and sack you fear. If you allow yourself to be discouraged from trading and investing, you might realize that the outside world is harder than you think, and you’ll forfeit the opportunities that markets offer you. Those who stay in their comfort zones aren’t going anywhere. Discouragement and dread would only leave you with no achievements. According to Dr. Janice Dorn, if… you begin to move in the direction of your fears - slowly and steadily - you will find that they have less and less power over you. Your world begins to expand. You understand that fear is really False Evidence Appearing Real (F.E.A.R.). You begin to see that you have the power within you to face these fears and to control them. They are real only if you allow them to be real. 

This article is ended with quotes from Mark Minervini:

1. “I dropped out of school in the eighth grade to work as a musician playing the drums in the studio and performing live… Early on, I made every mistake you can think of. For about five or six years I did not make any money trading; in fact I was at a net loss. If there is such a thing as a natural born trader, then I was an unnatural. Although I had trades go my way from time to time, it was how I handled the trades that went against me that created a problem and hurt my performance.”

2. “I do not avoid a trade based on the time of day. I make a trade when the stock is set up and starts to move in the direction of my trade… Probably the most important turning point was when I started religiously cutting my losses short, keeping them very small. I really started to focus on not losing as my Number One goal. This is the most important area of speculation regardless of style or strategy. To be successful, you simply must keep your losses smaller than your gains… I am always thinking risk management first. I would rather have a small position than no position or a position that I cannot get out of easily… My goal is to control my drawdown and equity curve.”

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/azeez-mustapha-technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Petropavlovsk: This Is Really a Difficult Market

The shares price of Petropavlovsk (LSE:POG) have gapped down with significant selling pressure. This is a bear market, but the market condition has been very difficult recently. The crucial thing is to pinpoint high probability entries or stay out of this market - as the analysis below would reveal. Every trader may derive gains from their ideas, since your trading ideas can be enhanced if you could gain an insight into where neophytes would like to open orders; and trade against them (a kind of mea culpa on the part of neophytes when they are proven wrong). Actually, this stock is oblivious of your gains or position sizing; including where you plan to smooth your position.

Technical Forecast

When looking at the big picture, this company stock has been trending downwards. The price has gapped down. It is clearly a weak market, and buying would not have been recommended. Technically, 4 Simple Moving Averages are used for this analysis. They are: SMA period 10, SMA period 20, SMA period 50, and SMA period 200. The colors representing the SMAs are highlighted on the top left of the chart below. The SMA 200 shows that the long-term trend is down, as it is also supported by the SMA 50. During this bear’s reign, a short-term rally took place between May 31 and June 15, 2012. This was a threat to the bear’s reign, because the rally was strong enough to make the SMA 20 cross the SMA 50 to the upside; therefore suggesting a possible change in the trend. A ‘buy’ swing signal could have been taken on June 27 and held for several days when a bull candle appeared as the price rested on the SMA 50 (while it essayed to breach that indicator to the downside). Following this, a bogus ‘buy’ signal was generated on July 13, but the price plummeted. Since then, the market has entered a difficult phase.

Another bullish correction started on July 25; which proved to be a trap for buyers (do not forget what I said at the beginning of this article), because personally, there was no rational reason to buy at that time, no matter what the fundamentals were saying. I wonder why anyone would want to buy a weak market when a change in the trend has not been properly confirmed. The current alignment of the SMAs does not support a new order. When this article was being written, the stock was trading at 405.1. There are resistance levels at 405.15 and 405.2, as sellers are trying to force the stock to move towards the support level at 404.5. If the price is taken to the next support level at 404.0, bulls might renew their forlorn battle again the bears. There cannot be logical trading approach if there are no trading plans. The market situation is not sexy at the moment, and I would recommend staying out of this market. Bears can inexorably push down the price with terrific rapacity.

Conclusion: There would soon be a time when the price on Petropavlovsk would be safer to trade. Entering the market at better prices can result in prepossessing moves, but not at this moment.  If the entry rules on this stock are eventually fulfilled, then an order ought to be opened with courage. You will have a better experience irrespective of what happens to that order. Traders love to realize gains as soon as positions are opened, though the gravity of this kind of expectation develops with intriguing feelings. Then, if the market shows any spurious signs of reversal, they would want to cut their profits - in most cases, prematurely.

This article is ended with the quote below:

“Regardless of whether you use indicators or trade from chart patterns; if you are a scalper, a swing trader, or a position trader -- trading for the long-term is the only thing that makes a lot of sense.” - Joe Ross

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/azeez-mustapha-technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Xcite Energy: An Opportunity to Buy Very Cheap

The shares price of Xcite Energy (LSE:XEL), though in an overall downward trend, is giving buyers a unique opportunity to buy very cheap and ride their profits to the sky. While it is good to follow the line of the least resistance, one should know when the least resistance would become the greatest resistance. Normally, a market bias shows incongruence in accumulation and distribution. In the case of the price on the company in question here, accumulation is becoming stronger than distribution. It is no longer ideal to short this market as the technical analysis below shows. You could be sliced up by the market that threatens to break down, but which does not.

Technical Forecast

This stock (LSE:XEL) has largely been bearish. Looking at the chart, we see that the market has been in a downtrend. However, the price has recently been consolidating to the upside as the supply zones below the price are getting more and more effective. Technically, Trendlines and Relative Strength Index (RSI) period 14 are used. The trendlines confirm that the price is edging upwards as it consolidates. The upper trendline is currently acting as a kind of resistance level. On August 20,2012, a distinct bullish candle attempted to break it to the upside, but the attempt was checked as the price failed to close above it. Once a candle closes above the upper trendline, it means the days of the bearish pull are numbered. The RSI 14 has gone above levels 50 and 60 respectively - now targeting the level 70. The RSI itself is giving a ‘buy’ signal which would be confirmed once the price closes above the upper trendline.

The more objective your analysis is, the more effective it will be. The price is currently 84, the nearest supply zones are 85.00 and 85.50 (the zones that could be under bullish attack any moment), whereas the effective demand zones are 84.00 and 83.50. There would be some volatility as bears continue to fight a possibly losing battle against bulls.

Conclusion: This is one of many trading setups that tend to be traded by Smart Money. A speculator who has witnessed a lot of irrationality in the markets would be wary of another irrationality, more than a speculator who has not witnessed such. It is merely a matter of waiting for the best opportunity. Patient buyers prefer to wait for unique opportunities in the markets, and then they do the right thing at the right time (as neophytes languish). The race the dog has run for many years is a leisurely gait for the horse.

This article is ended with the quote below:

“To understand any market, you have to know the longer-term demand and supply.” - D.R. Barton, Jr.

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/azeez-mustapha-technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Timeless Traits of Victorious Market Wizards - Part 4

“There will come a time when you believe everything is finished. That will be the beginning.” - Louis L'Amour (Great American Storyteller)

If you’ve lost up to 50% of your account, it means you aren’t competent: You ought to stop trading and go for further training (or why should you receive a margin call?). But some who’ve had huge drawdown because of gargantuan position sizes would prefer to treble their sizes and open revenge positions…. As if they’ve not learned their lessons. Each trader needs to be fully responsible for the outcome of her/his trading activity.

It’s true that financial instruments afford you unbelievable chances. Successful traders abound. It’s simply that they know what it takes to be successful. It’s therefore beneficial to imitate those successes; also learning from dangerous trading styles that didn’t improve the statistics on your portfolios. In the end, you’ll be familiar with what it takes to be a permanent victor. Utter perseverance is the wonderful cure for ignorance. Do you want to know the trading principles that work? Would you like to be a victorious market wizard in the foreseeable future? Would you prefer to know trading strategies that work? Please read the part 4 of the articles in this series.

Traits of Successful Market Wizards

13. Each position carries the same weight: It does not make sense to think that one trade will be better than other. You ought to treat every trade of with the same zeal. Every trade has the same potential. Sometimes, the trade you believe will be a winner can be a loser; while the trade you feel as worthless could go on to be a winner. You mayn’t refuse to trade a new setup because the last one produced a loss. Victorious market wizards can quickly forget about any recent negativity and open a new position with bravery and zest - just as they did with the position that went to negative. Cristiano Ronaldo - a highly successful football striker - knows that the ability to score more goals comes only when one does not lose hope after some goals have been missed or thwarted; that’s when one pays attention on more opportunities to score. Victorious market wizards know how to pass over closed positions and analyze the markets for new setups.

14. Victorious market wizards focus on the price: Beginner traders tend to believe that analyses should be complicated for them to be successful. They put Andrew’s Pitchfork, Fibonacci levels, Trendlines, Ichimoku Kinko Hyo, Alligator, Gator Oscillator, Chaikin Oscillator, DeMarker, Fractals, Market Facilitation Index, Parabolic SAR, Commodity Channel Index and so on, on a single chart. Putting too many analytical tools on a chart wouldn’t help you in the long run, because you won’t be able to focus on the price as you’re engrossed in the analyses of those things. In addition, each indicator has different parameters, different configuration, and different way of generating signals. Did you want your charts to look like Michelangelo’s paintings before you can become a market wizard? Price is the most important thing on the chart. Besides, winning strategies and analyses should be simple and effective. While you gain more experience as a trader, you’d start cleaning up your charts and focus on the price. Successful traders focus on king of the market. Price is the king. No matter how smart you think you’re, you’ll eventually acknowledge there’s no empirical or statistical evidence that complicated analyses are batter then simple ones. You ought to make your career easier for yourself. One again, price is the king of the financial markets.

15. Victorious market wizards don’t look for perfect market information: You can be a winner without having ‘insider’s information.’ You don’t need to know all the available trading facts about a particular instrument before you can trade victoriously on it. The possibility exists that you mayn’t be satisfied with the kind of market information at your disposal. There’s no amount of market information that can guarantee that you’d always make 100% accurate trades. Victorious traders acknowledge this truth. They can still make sound trading decisions even when they know that the information they’ve isn’t flawless. They’re ware of this, and can still execute trading setups based on the data at their disposal. Speculation is no picnic: but they remain victorious in the markets.

16. Victorious market wizards don’t trade against the trend: Gallant traders go short in weak markets and go long in strong markets. Buying in a weak market and selling in a strong market is a recipe for pecuniary ruin. Though, I’d say that there are trading methods that help find cheaper prices in bull markets and dearer prices in bear markets. Counter-trend trading is vicious if done by neophytes. Don’t buy simply because the market is oversold, or vice versa. If you’re not comfortable with trading an overextended market, you might sit on your hands until you get confirmation of the next movement in the market.

Conclusion: The last article in this series would be made available next week. No matter which trading approach you use, there’ll be winning periods and losing periods, yet you can’t become a master trader if you quit. You can’t afford to fail to work yourself up into success. You just need to familiarize yourself with dos and don’ts of the financial markets. You’re invited to have wonderful trading experiences here: www.advfn.com

This article is ended with quotes from Jessica Peletier, a successful female trader and blogger:

1. “Thankfully, the only vicious, irrational, stressed out freak you ever have to work with as a trader is yourself.”

2. “I have never met a successful trader that could quite happily quit and go do something else entirely. For me, trading is all there is. I cannot imagine a life without trading in some form or another.”

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/azeez-mustapha-technical-analysis

Regency Mines: The Shares Skydive

The shares on Regency Mines have consistently shown weakness up till now: something that is expected to continue further. This is a bear market and it is very dangerous to go long right now. On the other hand, a discreet seller would have made a huge profit in this market, particularly those who sell rallies in the near-term. This is a high probability methodology. A high probability methodology is a speculation idea or stratagem that can produce average winners that are bigger than average losers - that survive a transitory losing streak. This enables speculators to stay in the markets for eventual gains.

Technical Forecast

Regency Mines stock has plummeted severely, and it seems there is no end in sight to this weakness. The price consolidated lower at the beginning of this year, topped at 2.65 (in April in which there was much volatility), and has continued to fall since then. The price closed at 0.865 yesterday. Imagine what amount of money a trend-following short-seller would have made! Technically, ADX 14 and Stochastic default parameters are used on the chart representing this stock. The EMA is sloping down seriously as the price remains below it. As long as the price remains below it, the current scenario will remain valid. The Stochastic is in the overbought region, and it can stay in that region for a very long time. The important resistance levels are 0.900 and 1.00, whereas the crucial support levels are at 0.800 and 0.700. The aforementioned resistance levels ought to do a good job impeding possible bullish effort.

When would the price turn and become dependably bullish? This question might come to your mind. The answer is that only selling at higher prices would be recommended now. A versatile speculator that has a strategy which makes money in bear markets would only buy rallies into resistance levels. It would be sensible to buy only if the market closes above the EMA 14. Remember, only when it closes above the EMA. At that time, the Stochastic should be heading to the overbought region, meaning that the trend has changed. While in this market, an adept risk managing trader would only sustain a negligible drawdown even if they were caught on the wrong side of the market. The effect of the uncertainty is limited to the amount of the portfolio that would be lost on a position if the price goes contrary to the expectation. Woes betide the adamant bull if they refuse to stay out of the market (i.e. only the permabull will suffer in this kind of the market)… or else their adversaries would be forced to expiate their rashness.

Conclusion: You can now see what is happening to the Regency Mines shares. Technical analysis clears up ambiguity and makes a possible market bias clearer. It invites insightful investors and shows them the realities of the markets.  It should be averred that the market is moved by people - tangible people’s reactions. The volatile fate of a portfolio shows the results of a market speculator, apart from what transpires on the chart. A highly skilled speculator will realize gains eventually, irrespective of what transpires on the chart. Conversely, a mediocre trader speculator will probably not realize gains, irrespective of what transpires on the chart.

This article is ended with the quote below:

“If a stock is not doing what I expected, that is a reason enough to sell. So, it is not a fixed time frame, but rather how things are going compared to my initial expectations. You can always get back in.” - Mark Minervini

 NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Centamin Egypt: This Upside Breakout Is Tenable

 The company stock of Centamin Egypt has broken out to the upside - outside of a prolonged consolidation. It is likely that the price would continue to go up as the analysis below shows. The chart below utilizes daily candles (24-hour candles). Based on criteria it is often noticed that signals on the 24-hour time horizon are more significant than signals on smaller time horizons. 

Technical Forecast

This company stock (LSE:CEY) was actually bearish recently. After a spell of the bear market, the market entered a frustratingly protracted consolidation phase, especially starting from April 5, 2012. Until July 25, there was no clear victory between buyers and sellers. Then on this very day, the price rose from a low of 56.6, and the stock was trading at 69.05 at the time of writing this article. Technically, the ADX 14 and the MACD (default parameters) are used for this analysis. The MACD histogram is already above the zero line, while its signal line has almost crossed the zero line to the upside. The ADX itself, while confirming the recent sideways movement in the price, is showing further weakening of the market pressure. What is available on the price chart shows that we currently have a Convergence Pattern on it. This happens when sellers are getting tired of their wrestling against buyers. As the strength of the trend weakens and the MACD threatens to start going up, it shows that the bear pressure has thinned out.

Albeit the contemporary price market conditions are different, the dread, fright, emotions resilience has been constant as far as speculators are concerned. Yesterday the price went above 70.4 level but the price was pushed down. We should note that this is no big deal since a price does not go in a straight line. There pullbacks in a bull market as well as rallies in a bear market. Yesterday formed a candlestick pattern called an ‘inverted hammer’ whereas today shows a ‘hammer’. What is happening today means that further southward plunge has been rejected as the price is poised to continue moving up - despite all. It would have to push through the supply levels at 69.50 and 70.00 before going up further. The demand levels at 68.50 and 68.00 could inhibit bearish attempts.

Conclusion: Speculation is closely related to accumulation and distribution. Decreasing accumulation portends that decreasing distribution could impact the market. What is more preferable here on Centamin Egypt stock is increasing accumulation and decreasing distribution. It is one way of seeing significant move. Each market speculator would usually look for a bias and chart pattern, yet it ought to be in agreement with the reality on the chart. No price is too expensive for bulls, even if analytical tools are telling so, though it could be extremely low to be smoothed according to its innate characteristic.  

This article is ended with the quote below, which is from one of the most experienced traders alive today:

“Instead of reacting with stunned paralysis, the winning trader views unfavorable market conditions as a learning opportunity. It is a time to gain more market experience. The optimistic trader objectively studies the markets, trying to understand how the market moves and why. It isn't a time to be stuck, but a time to think creatively and sharpen trading skills. It's at times like these that it's time to stand up and cultivate a fighting spirit.” - Joe Ross

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Timeless Traits of Victorious Market Wizards - Part 3

“One can have no smaller or greater mastery than mastery of oneself…” - Leonardo da Vinci

Fantasies are among the cheapest things in the world, since everyone fantasizes. Nevertheless, carrying out what you fantasize is sometimes not impossible, providing that it borders on reality. So realistic goals in trading are the objective plans that guide you as you journey towards financial freedom. When a trader does not know what she/he is doing, nothing will work for them. The message here is that you can achieve long term success with the most important aspect of trading - risk management and rock-solid discipline. Without this you cannot be a permanently victorious winner in the markets. Would you be amazed that we are serious about helping as many traders as we can to be the best traders they can be as they continue their journey to financial freedom? Trading principles that work are non-market specific. Read on this article as you’re exposed to more timeless traits of triumphant market wizards.

Traits of Successful Market Wizards

9. Victorious market wizards know that the markets will be there on Monday morning: When I was still a novice, it wasn’t uncommon for me to be dejected because I wasn’t online when a trading opportunity occurred. That was ludicrous. Victorious traders acknowledge that they don’t need to be trading every time. You might think that one trading setup is your last opportunity that mustn’t be missed. This is plainly farcical. There’ll be many opportunities to go long on the GBPUSD at 1.5600 or sell the EURGBP at 0.7900.  You oughtn’t to punch your PC or break your android phone when you discover that you failed to notice a fabulous trading setup. You’ve to be grateful that your portfolio is safe. There will always be trading opportunities in a foreseeable future; even tomorrow. Be thankful if there’s no huge negativity on your portfolio (usually sustained from emotional trades). More speculation opportunities are coming your way. The markets will always be there on Monday morning.

10. Victorious market wizards honor their stop orders: When triumphant experts trade, they use hard stop loss orders, not imaginary stops. The issue of stops is controversial, and as a result of this, more articles would be written on this very topic in future. Stop loss must be respected; it mustn’t be widened under any circumstances. In the past, I declared without mincing words that trading without stops is one of the suicide trading techniques that would eventually lead to pecuniary ruin. Your stops are your life insurance policy in the markets. I’ll have to be blunt here: without judicious use of stop loss, it’s completely impossible to enjoy everlasting success in the markets. Success without stop loss order would eventually prove to be transient. It’s no wonder that some so-called market professionals of the past are no longer trading (they crashed and flopped). Taking one’s small loss and looking forward to the next trade is better than smarting and running to toilet now and then because of a negative trade that’s going protractedly against you. The probability that a negative trade would later go positive is only 50%. One who fails to close a small loss could be later forced to close a colossal loss. Great institutions, funds, and investment groups have collapsed or morbidly affected because their speculators failed to put and honor hard stops. Excessively huge position sizing and lack of stops are often the reason why so-called [rogue] traders ululate and wail like babies when the markets become precipitously irrational. A stock that has gone against you by 500 points could just be starting a 6000-point journey. The stock could even travel far farther than this and might not reach your entry price during your generation. Victorious market wizards always use stops, even if it sometimes appears daft to do so. They don’t also open additional trades in the losing direction.

11. Victorious market wizards do not feel a price is overbought or oversold: The price on the GBPCHF isn’t oversold at 1.5082 if bears will still prefer to short further at 1.5000. Market wizards do not buy because a market has fallen too much, or sell because a market has risen too much. Majority of speculators grapple forlornly with financial instruments as they’re looking for turning points in the markets. No matter the observation period preferred, majority of market speculators employ any chart analysis and analytical tools at their disposal to pinpoint expected reversal areas in the markets. Rather than going against the market because they thinks the price is too cheap or too expensive, victorious market wizards sell short when there’s a rally in a context of a downtrend or go long when prices are on sale in a context of an uptrend. Victorious market wizards wouldn’t look for reversal areas. They’d prefer the reversals to occur; thus get confirmed before they make their money somewhere in the middle of the new trend. They’d make sure that the newly formed bias has been confirmed, contrary to most speculators who look for reversals before they occur. Majority of speculators dread trading with the flow in overbought and oversold markets. A market bias is prone to hold its ground rather than capitulate, therefore is it sensible to trade against the flow, rather than go with the flow of the markets? However, this won’t prevent you from managing risk if there are eventual reversals.

12. Victorious market wizards increase their position sizing in winning streaks and decrease their position sizing in losing streaks: For instance, if I traded currency markets with a $100000 - account, I’d use 0.5 lots per trade with 100-pip stops (with the assumption that I wouldn’t exceed 0.01 lots for each $2000). If the account increased to $120000, I could increase the position sizing to 0.6 lots (thus making it 0.8 lots if the account increased to $160000 or 1.0 lots if it increased to $200000).  Initially, if the account was decreased to $90000, I’d reduce my position sizing to 0.45 lots or 0.4 lots if the account was decreased to $80000. What certain gamblers have branded minuscule position trading volumes has been part of my effective safety rules in the markets. A female trader once reveals that, by risking 1% or less per trade, she finds it easy to remain indifferent to an individual trade. Never increase position sizing during a losing streak, with the hope of recovering your losses quickly. You must always control the exposure of your portfolios, since you aren’t sure whether the next trade would be a winner. You just need to stop doing what doesn’t work for you and embrace the winning principles that have stood the test of the time. The permanent safety of your account is far more important than the returns you anticipate. Sometimes, it’s a few trades which are allowed to run that’ll recover your truncated losses and add more value to your portfolios - thus pushing you ahead. It might even be a few trades per annum. Diligence and perseverance are needed in trading.

Conclusion: Part 4 of the articles in this series would be available next week. Financial instruments reward people with money as they put their portfolios at stake. In this regard, putting portfolios at stake is what brings financial freedom. This is a staunch principle of speculation and market activities. Are you a successful trader? If you’re, please continue to enjoy the fruit of your effort. If you’re not, solutions are available. The benefit of doggedness in trading shows that your success is closer to you than you think. Even if your trading performance is satisfactory, you can still do better than that. You’ve not reached your fullest potential. Your present track record is never the most astounding that can come from you. You’ve not attained the summit of your glory in trading. There are tools and services that can help you have the best trading experience available anywhere. For top-notch experiences, you can subscribe free here: www.advfn.com

This article is ended with a quote from Dr. Janice Dorn:

“If you are not in constant attention to the small still voice inside of you that keeps you centered and in the present, you  will always feel the most fearful when you should be the most greedy and vice versa. If you are watching every tick, hanging on every piece of news and noise that comes to you through the media, fibrillating on a minute to minute basis between fear and greed, in a state that you cannot sleep or are in terror, or so elated that you know your position will just keep going up and up, then you really need to get a grip and get over yourself…  You have the power to be a consistently profitable trader if you get right with yourself, go with the flow, stay centered and take total responsibility for your thoughts, beliefs and actions.”

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

NB: If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Falkland Oil and Gas: Bulls Are Recalcitrant

The company shares of Falkland Oil and Gas (LSE:FOGL) are showing strong determination to keep going up, as the technical explanation below reveals. The long-term trend on the company price chart has been bullish; despite the turbulent past. The price has become inebriated by incessant bullish pressure. A potentially new phase of the dominant trend has been identified and would be monitored. But I would like to point out that an idea used for following a line of the least resistance does not preclude the usefulness of other similar ideas.

Technical Forecast

The price movement on the Falkland Oil and Gas chart has been turbulent and volatile so far in the year 2012. Those who traded with tight stops would have been whacked unless they entered with high reward and low risk trading strategies. In this analysis, I make use of 4 Simple Moving Averages: SMA period 10, SMA period 20, SMA period 50 and SMA period 200. You may take a look at the chart below. On the top left side of the chart, you would see the values for those SMAs and the color that stand for each them on the chart. In July 2012, heavy bearish pressure brought the price to the SMA 200 (which shows that the long-term trend of the stock is bullish). On July 19, further bearish plunge was checkmated by the SMA 200, which serves as a great demand zone, and therefore preventing the classical Death Cross on the chart. Bears flailed and floundered as the price tested the SMA 200 several times before their desperate effort thinned out. The price was given a new lease of northbound energy after this - the price has wheeled upwards.

In order to apprise the present scenario further, a gap-up which occurred on August 6, 2012 has been followed by further bullish momentum. This means that we should anticipate volatile movement on this market, more probably to the upside. At the present, there is a candlestick pattern called a ‘hanging man,’ which shows that the attempt by sellers to pull down the price was foiled by buyers (especially in this context of an uptrend). The market was trading at 90 when this article was being prepared. The nearest distribution zones are 90.50 and 91.00 and the nearest accumulation zones stand at 90.00 and 80.50. The latter zones should work in support of the bull’s interest.

Conclusion: A meaningful speculation technique proffers a clean series of criteria for trading on medium-term observation period. Bears would have to brook the current outlook as the stock might inevitably go up. Mean reversion journeys in prices would only be identified as they are if they persist for about a few trading days as opposed to the overall trend. Transitions from bearish phases to bullish phases would be possible if the foregoing overextended trend on the upside occurred when a bearish trend is violated to the upside. It does not matter if this occurs as a result of the lower lows or while the intraday speculation is still extant.  

This article is ended with the quote below:

“The first thing I always look at is the chart. That is the most important thing.” - Stephen Temes

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

Lloyds Banking Group: The Shares Are Indecisive

The Company shares have not been going in a clear direction since the middle of June 2012. After a recently bear market, Lloyds Group’s stock has been raging in a vivid equilibrium zone till now. Nonetheless, there is an interesting formation on the company price chart as explained below, for further southward plunge has been clearly halted, while bulls and bears are currently engaged in a battle of wits. Could this prove pyrrhic in the long run, or would the bulls come out home and dry? Even there are prices that go significantly upwards in an overall bear markets, for what happened in the past will always happen again.

Technical Forecast

As I said earlier, Lloyds Banking Groups has been generally bearish so far in 2012. The southward move happened especially from the middle of March until the beginning of June 2012. The price went moderately bullish after this - until June 18, 2012. Since then it has been moving sideways (till now). Technically, there are two horizontal lines drawn to underline the recent price action on the chart. The upper line stands around 32.50 while the lower line stands around the price level at 29.00. This shows that the shares are in a vivid equilibrium zone. There have been several tests of the upper and lower lines, with no clear breakouts above or below any of them. Those breakouts in price had been bogus and spurious: a trap for neophytes. It is good to stay out of this market until a candle closes above or below one of the horizontal lines, while another one appears outside the ranging zone.

Studying the present market situation of the stock (LSE:LLOY), the Relative Strength Index, period 14 is above its level 50 and pointing up slightly towards the level 60. This signifies that it is more likely for the price to break out northwards, because the bears’ pressure seems to have been halted as buyers are re-gaining their stamina. At the time of writing this article, the price was at 31.3. There are support levels at 31.00 and 30.50. At the upside, there are resistance levels at 31.50 and 32.00 (hurdles the price would need to overcome if the price is to trend upwards).

Conclusion: Trading gurus have realized long ago that prices are pushed by dread, misgivings and avarice - exactly the feelings that push some people to violence. Price movements invariably portend the general opinion concerning the worth of some financial instruments, though their mean deviations correspond to the bid and ask prices. Traders would sometime give up part of their portfolios making retracements negligible and would prefer to make it an insider’s secret. 

This article is ended with the quote below:

“The most important thing in trading is risk management, not leverage. If the risk is under control, the profits will come sooner or later.” - Gabriel Grammatidis

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

Monthly Trading Signals (August 2012)

“You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You must do the thing which you think you cannot do.” - Eleanor Roosevelt

You could have possibly seen my monthly analyses on some exotic crosses. The crosses analyzed aren’t the only instruments traded with the type of analysis used. Below you’d find some pairs and crosses on which I opened positions on a monthly basis. Personally, this is what I do, not what’s recommended that others should do. Below are just 10 of my open trades. The maximum duration for each trade is one month, and we should note that the orders have been running before this article was written.

1. Instrument: EURNZD

Order: Sell

Entry date: August 1, 2012

Entry price: 1.5155

Stop loss: 1.5368

Take profit: 1.4568

Status: Open

Profit/loss: 3 pips

2. Instrument: AUDJPY

Order: Buy

Entry date: August 1, 2012

Entry price: 82.13

Stop loss: 8.12

Take profit: 88.12

Status: Open

Profit/loss: 94 pips

3. Instrument: GBPCAD

Order: Sell

Entry date: August 1, 2012

Entry price: 1.5693

Stop loss: 1.5906

Take profit: 1.5106

Status: Open

Profit/loss: 21 pips

4. Instrument: GBPAUD

Order: Sell

Entry date: August 1, 2012

Entry price: 1.4908

Stop loss: 1.4908 (breakeven)

Take profit: 1.4320

Status: Open

Profit/loss: 104 pips

5. Instrument: NZDJPY

Order: Sell

Entry date: August 1, 2012

Entry price: 63.57

Stop loss: 63.57 (breakeven)

Take profit: 64.27

Status: Open

Profit/loss: 70 pips

6. Instrument: AUDCAD

Order: Buy

Entry date: June 18, 2012

Entry price: 1.0528

Stop loss: 1.0322

Take profit: 1.1122

Status: Open

Profit/loss: 57 pips

7. Instrument: NZDUSD

Order: Buy

Entry date: August 1, 2012

Entry price: 0.8123

Stop loss: 0.7921

Take profit: 0.8721

Status: Open

Profit/loss: 62 pips

8. Instrument: AUDUSD

Order: Buy

Entry date: August 1, 2012

Entry price: 1.0507

Stop loss: 1.0305

Take profit: 1.1105

Status: Open

Profit/loss: 64 pips

9. Instrument: USDCAD

Order: Sell

Entry date: August 1, 2012

Entry price: 1.0016

Stop loss: 1.0219

Take profit: 0.9419

Status: Open

Profit/loss: -1 pips

10. Instrument: NZDCHF

Order: Buy

Entry date: August 1, 2012

Entry price: 0.7932

Stop loss: 0.7717

Take profit: 0.8517

Status: Open

Profit/loss: -2 pips

The position sizing is 0.01 lots for each $2000 (thus making it 0.05 lots for each $10000). When an order goes positive by 70 pips, I move the stop to breakeven. From 200-pip profit upwards, I use 50% trailing stop.

Conclusion: Speculation remains one of the most challenging endeavors under heaven. You grapple with speculators on the opposite side of your trades and always you grapple with your emotions as well - whenever you decide to open or smooth orders. Obviously, there must never be open positions without stop orders.

This article is concluded with the quote below:

“I have been trading for almost eight years now, have taught thousands of people worldwide and worked for a fund, yet I would be a lair if I said that I never doubted my plan when taking a trade from time to time. It is human nature to doubt oneself from time to time. I wouldn’t be human if I didn’t! However the difference between me and a novice trader is actually quite minimal. I will never let my doubts get in the way of taking a trade which meets the criteria of my trade plan.” - Sam Evans

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

For more articles at FXempire.com, go to:http://www.fxempire.com/author/mustaphaazeez/

Open an account here: eng.fxclearing.ca/ib/915

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If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Yahoo! Messenger ID: saazalmu

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

Timeless Traits of Victorious Market Wizards - Part 2

“Chance only favors prepared minds.” - Louis Pasteur

Intriguing questions about trading have been raised by many. Yet, we’d be happy to say that we’ve derived joy from helping others to become better traders. No achievement is better than the awareness of the fact that your professional activities are a huge benefit to some people out there. It’s great to help people achieve financial freedom - the end result of traders’ struggle in the markets - as a result of your effort to help traders achieve their greatest potential. In a phenomenal profession like trading, lifting people out of the quagmire of financial defeat is the greatest goal. We’re lucky to have had trading role models who are willing to reveal time-tested trading facts to us, hence the Part 2 of the series that bears the topic above.

 

For instance, account balances in trading are a result of managerial skill, not trading accuracy. Negative and positive positions are different from skillfully managed and carelessly managed positions. A positive position might cause some roll-down on your portfolio, whereas a negative position might add some value to your portfolio. As long as a market speculator sticks to a plus expectancy strategy, she/he is skillfully managing a position, irrespective of whether this ends in a plus zone or a minus zone. Why? The reason is that if she/he does this for many samples of positions, she/he would eventually become victorious.

Traits of Successful Market Wizards

5. Victorious market wizards don’t choose money as their number one aim: The reward of being good traders is pecuniary. It isn’t judicious to assume that the ultimate result of the acts of speculation isn’t financial reward. This is the end result of our passion for the markets. However, pecuniary benefit shouldn’t be our number one goal in trading; otherwise we’ll get discouraged when the going becomes tough. In this age when most people crave instant gratification, the promise of financial reward tends to turn us into inordinately and irrationally emotional traders who make poor trading decisions based on subjective reasons, not logical trading process. Those who put money first will inevitably get discouraged and quit when they face challenges. Successful traders have self-improvement and trading mastery as their priority, not pecuniary benefits. They are aware of this fact, and wouldn’t let returns cloud their aims and ambitions as traders. A market wizard can measure his trading efficiency by how they flawlessly execute their trading plans. Really you don’t make mistakes if you trade and lose: you make mistakes only if you don’t follow your trading rules. Your trading efficiency is measured by your ability to avoid mistakes when executing your orders and carrying out trade management. Pecuniary benefit is a mere outcome of flawlessly executing your killer trading plans. Those who think they can predetermine how much percentage returns they can make on weekly, monthly or annual basis are simply having their heads in the clouds. When you target 20% returns on a weekly basis or 50% on a monthly basis, you’re simply going to become an over-trading gambler who does things based on fantasies. You just need to set realistic goals in trading and lower your expectations. You may incur an overall loss in the month you’ve planned to surprise your girlfriend with a winning lotto ticket from the markets, and you may come up with a profit when you least expect it, but you can’t predetermine how much you’re going to make in a given period. 

6. Victorious market wizards work on themselves for self improvement: Veteran traders inevitably discover that they need to conquer themselves before they could conquer the markets. The greatest adversary on the way to your trading success is you, because of certain Achilles’ heel you cannot control. There’s a need for you to understand trading psychology and behavioral finance and how they affect your lot in the financial markets. Honest-hearted and serious trading experts have been involved in a series of courses and models that have enhanced their personalities; helping them to discover their true self and potential. This often takes longer than we think. Those who’ve worked seriously on themselves have gone to the next level in trading. They now trade effortlessly and profitably. There are experts in this field, e.g., Dr Van K. Tharp, Dr Woody Johnson, Dr Brett N. Steenbarger, Steve Ward, etc. Without working on oneself psychologically, permanent success is not possible in trading, as it’s a matter of time before one discovers that other trading principles cannot work in the long run without this extremely crucial factor. This fact is ignored at one’s peril.

7. Victorious market wizards carry out extensive research on the markets: Trading veterans have learned myriads of things about the financial markets. They’ve learned what work and what don’t work. They’ve read numerous books, magazines, etc about trading. They’re really trading geeks. Most importantly, out of all the vast information possessed by an individual market wizard, she/he has narrowed everything down to what works for her/him.

8. Victorious market wizards use charts as a primary decision making tool: Price is king and this is no longer a classified fact. If you remove your analytical tools on a chart (cleaning up the chart), you’d see that it’s easier for you to see what’s happening to the price. The simplest and the most effective way to determine whether the market is up or down or sideways is just to look at it. Other analytical tools are only secondary. Making speculative decisions without considering pure price actions is suicidal. It’s far better to base one’s decision on what the price is doing. This might seem commonplace, still it matters a lot when it comes to how market wizards detect great trading opportunities and reap gains eventually. The logic is to watch as price actions develop, returns are realized from taking action while new setups are valid, not when they’re late. Getting ready to take advantage of classical developments on the chart is feasible if you have a wealth of experience. This isn’t to emphasize that market wizards don’t lose or that they can prognosticate future prices with insane accuracy. Conversely, all traders look at the same charts the world over. The only thing trading veterans do is that they can use the current market data to act in advance of what might occur tomorrow. You can endeavor to make it a habit to base your trading decisions on what’s happening on the charts. Back-testing and curve-fitting are great only when testing a strategy, but you make money only when you come to grips with the uncertainty of the future.

Conclusion: Not only do majority of traders fail in the markets, studies reveal that majority of other business ventures flop as well. Most flop because of ineffectual business tactics. Indeed, speculation on the markets can be likened to ventures. Speculators require more than strategies - they require sound trading principles. Besides, those principles would have timeless golden rules, trading psychology, position sizing, risk assessment plan and so on, incorporated into them. The part 3 of the articles in this series would be available next week. 

This article is ended with the quotes below:

“The biggest secrets are always in plain view, and the best view is to look in the mirror…. If you are thinking or behaving in an undisciplined or unorganized way when you are not trading, you will trade in an undisciplined and unorganized manner. Without discipline and rigorous attention to detail, you will not be able to trade successfully. This is also true if your personal life and relationships are not going well, because you will be unable to give complete focus to your trading-- and you will fail.” – Dr. Janice Dorn

“Eliminate fear, fear of failure and fear of trading. If you suffer from fear then trading is not for you…. Aim for consistency. One of the keys of successful trading is to repeat good habits time and time again, boring but profitable.” - John Bartlett

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

Monthly Market Updates on Exotic Crosses (August 2012)

 “If there is one vital lesson I’ve learned in my own trading career that has served me better than any others, it is to keep things as simple as possible in trading as this is really nothing more than a game of probabilities and mental fortitude… Now, while we are happy to look for those rewards in the market, we often let the excitement of making money overpower the reality of losing money… Just because you are a trader, it does not mean that you have to trade all the time.” – Sam Evans

Last month, the currency markets experienced great volatility and trend-based pressures. The instruments that went up did so without moderation, and so also were the instruments that went down. Speculating on seriously falling markets remains one of the most agreeable trading methods. Extremely falling markets would soon offer traders excellent opportunities to enter the markets long at very cheap prices. Even position traders would like to speculate on low prices and anticipate them to rise in value. When a trend goes down for a long-period of time, timing the accurate turning point for a bullish market is the knowledge that victorious traders ought to have. There are many ways to speculate on the markets that seem to have gone too far. 

In July, 2012, there were gaps that occurred at the beginning of the markets. A gap that opened lower in a downtrend showed that the bears were dying to get their hands filled. This could not have been interpreted in other way, except to mean mere southward pushes. The bulls’ aspiration was overwhelmed with bearish pressure, till the bears were satisfied. The markets were then forced to drop further. What was the outcome of this? The bears have subjugated the bulls. The bulls were really in a pitiful condition as the markets tended to go against them.

Below is the summary of some of my trading forecasts this month:

AUDUSD

Primary trend: Bullish

The AUDUSD rose by over 280 pips last month - something that could have been gained as returns provided profits were allowed to run. On the chart, we see a bullish Confirmation Pattern that is still early enough. The ADX line is trudging upwards (now at the level 27), while +DI is above -DI. The MACD signal line and histogram are now above the zero line. The bullish trend is still valid.

AUDJPY

Primary trend: Bullish

This cross did not trend that much in the month of July 2012, but the bias is still to the upside. The perpetual strength in the JPY could end anytime soon and the cross might garner enough stamina to assume a significant bullish stance. On the chart, we have a Convergence Pattern; which mean that the bears are getting tired in their desperate battle against the bulls. If their strength is exhausted, the cross might rise.

EURNZD

Primary trend: Bearish

Early last month, I said this cross was in a bearish mode. The cross fell by well over 500 pips in the month of July. The bias is still down. On the chart, we have a conspicuous Divergence Pattern, showing sellers’ supremacy. The fact remains that the EUR is weaker than the NZD. The next support level is 1.5100, and if it is successfully broken, the price might trend lower to 1.5000.

EURCAD

Primary trend: Bearish

This cross also nosedived by far more than 500 pips in the month of July 2012. The present Divergence Pattern on the chart stands for a confirmation of the present southbound bias. Both the signal line and the histogram of the MACD are clearly below the zero line, while the ADX line is far above the level 40. This shows potent bearish pressure. The price may be corrected up a little before it moves down further.

AUDNZD

Primary trend: Bullish

This exotic instrument had a significant rally last month, but it is currently having a serious correction. It was corrected lower by more than 100 pips as the price in the month of July 2012 ended at a low of 1.2928. This potentially gives us a great opportunity to buy cheaper in the context of an uptrend. However, there are obstacles to overcome in the distribution zones at 1.3000 and 1.3050.

GBPCHF

Primary trend: Bullish

This market is currently around 200-pip bearish correction after it moved up by 500 pips last month. The ADX line went up above the level at 40 - hence the present bearish correction. I still maintain a bullish scenario on this market, assuming that the current price action would afford me the opportunity to buy cheaper. There are demand zones at the levels 1.52000 and 1.5015.

Conclusion: Next week, you would have the privilege to see some trading signals that were taken with the kind of analyses used here. Being a market speculator, you show know your level, be faithful to your trading rules, and be brave about the trading convictions you have. If you do what you need to do to be a permanently triumphant trader - some may not like you, but your success in trading might endear you to many who crave trading success. Sure, you can try to be just like every other trader moving downwards rather than upwards. But that’s so boring! Being a permanently successful trader makes you stand out in a good way. It doesn’t make you weird. It makes you likable.

It’s part of the FXEmpire.com’s mission to make you thrive as a trader - to metamorphous into a market wizard, and flourish as a market speculator.

The article is concluded with the quotes below:

“However, it is true that trading is difficult. Of the many who try, few realize lasting success…. While the risks and sacrifices can be many, you don't have to give up your whole life to become a trader. Initially you might not be able to spend as much time with your family as you would like, but that is a choice you make, not one that is put upon you. You might have to work extra jobs to build up capital needed for trading or to pay for trading expenses… I don't believe it's necessary to focus exclusively on trading. You want and need to have a life.” – Joe Ross

 “The KISS approach’ – ‘keep it simple & stupid’ and is more important then ever for today’s trading world. With thousands of systems, indicators, markets and brokers, it is easy to fall into the trap of information overload. Media also brings most moves into the limelight in which the contrarian should mostly tend to look the other way. Any market can only move in the directions; up or down (and of course sideways). With this in mind, primarily you can flick a coin and the outcome of up or down will have a 50.50 chance. Why make the process more difficult by suffocating these probabilities with a hundred indicators or a thousand possible news outcomes?  "Simplicity" is key” – James King

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

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