Deron Wagner: Stop Losing in the Markets

LEARN FROM MARKET WIZARDS - PART 5

“Illusions are something very pleasant; but the only disadvantage is that they tend to burst like a bubble.” - Wolfgang Kurz

Deron Wagner didn’t know anything about stock markets before 1997. He read about an article that mentioned the performance of Excite.com stock - something that kindled his interest in trading. He wasn’t aware of how long it’d take him to become a successful trader. When he went into trading, he began to lose (because of some traits that are common in novices). He lost continually for some years; until he came across trading principles that work for him. He’s stopped losing since then. This means that he makes more money than he loses.

Deron established Morpheus Trading Group (MTG) in 2002. He’s a trading expert and author (having written some best-selling trading books). He, with his colleagues, has been managing money for others with their time-tested trading methods. He’s a proven track record. He’s been a constant participant at many trading/investing events across the globe. He’s been featured on many famous financial media. He was also interviewed in TRADERS (August 2012).  He’s down-to-earth in his market analyses and trading discourses. More than 4000 interested people have been benefiting from his newsletters, sent totally free of charge. His official website is Morpheustrading.com.

Lesson

There are numerous valuable lessons one can learn from Deron Wagner. Some of them are explained below:

A). No matter how good you think you’re in the knowledge of the financial markets, your perception would change when your hard-earned money is at stake. No matter how much you’ve read about trading, you’ll realize that theory is different from practice when the market shows you its true color.

B). If you lose in the markets, don’t despair. It means you’re only paying tuition fees to the markets. Eventually, you’ll stop losing more than you gain and become a great trader and harvest profits from the markets on annual basis. It may take some time and perseverance to achieve this. Just make sure you learn from your mistakes and never repeat them.

C). The best strategies are trend-following strategies. One of the best trading methods is to buy pullbacks in an uptrend or sell rallies in a downtrend. Some indicators can be used to attain this aim (like moving averages). It pays to go with the overall trend. When a trend changes, it must be confirmed before one starts going with it.

D). It is very dangerous to trade without stop loss or to refuse to go out of the market that’s going against you. There are no other ways protect your account as a private trader. This is a way to deal with the permanent uncertainty in the markets. You mayn’t make profits sometimes, but you can make your losses to be as small as possible. By taking risk management serious, you’ll never lose a huge percentage of your portfolio. When you specialize on not losing, you’ll eventually make money and go ahead in the markets.

Review

Trading success has to do with the time you earmark for speculative activities, not the time you earmark for systems optimization and analytical investigation. Every soul on earth has 1440 minutes per day allocated to her/him. However, only heavens know how much of your time you spend on trading on daily basis. There are many activities in which you engage yourself on daily basis; plus the time you spend with your loved ones. It seems there’s no enough time for these activities. Trading remains a serious area of human endeavor and you need to take it as such if you want to be victorious and you’d have to see how you can balance your trading career with other things that matter in your life. How do other adverse experiences in life affect your trading career? If you can’t make money as a part-time market speculator, you’d find it difficult to do so even if you go full-time. Trading full-time doesn’t remove the challenges you face when trading part-time. Spending more time on your screen doesn’t make you a better trader.

This article is concluded with some quotes from Deron Wagner:

1. “Unfortunately, I think many traders cannot learn to separate their egos from their trading decisions until they have experienced enough pain to realize that intelligence has little to do with profitability in this business.”

2.  “I once read, and now truly believe, that the most successful traders are out of the markets more than they are in the markets. 80 per cent of a professional trader’s profits are made from 20 per cent of their winning trades. The “80/20 rule” is known as Pareto’s Principle, and it definitely is true for our historical performance. Therefore, if odds are good that it will be challenging to find a few winning trades that will constitute that 20 per cent of winning trades, it is best to stay on the sidelines and wait for better opportunities to develop.”

3. “Poker is luck in the short term, but skill in the long term. It is also a battle of psychological wits, much like the stock market. Proper risk management techniques and discipline is also crucial in poker, just like trading.”

 Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

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

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

Create Resources Holdings: The Stock Is Bound To Rise

It is expected that the Create Resources Holdings stock (LSE:CRHL) will rise as explained below. Bears do not have any chance here any more! It is high time sellers smoothed their positions and changed their bias (or else they will be caught in a wrong direction). What is bad news for sellers is good news for buyers: what is a cause of sorrow for the farmer is the cause of joy for the partridge. Traders and investors may now want to determine their goals on this market and reap rewards from it.

Technical Forecast

The shares have been in a long-term downtrend; being perpetually bearish. Technically, the Exponential Moving Average (EMA) period 21 and the Stochastic default parameters are used. Recently, the price traded constantly under the EMA 21, mixed with extremely tight ranging and short-lived rallies that were followed by bearish continuations. But on August 14, 2012, it reached an important accumulation zone around 0.475. After this, the price found it very difficult to continued going down. In fact, what happened on August 14 was rather followed by a new buying wave, and then some period of almost no activities between bulls and bears. On September 21, 2012, the price crossed the EMA 21 to the upside - closing above it. We can also see that the Stochastic was completely in the oversold territory prior to this day.

This is an auspicious time to go long on this stock. Do not be afraid of any pullback in price. This is expected to happen because the Stochastic has jumped into the overbought territory (as the stock may yield to gravity in the near-term). Once the Stochastic heads down a little or goes near the oversold area, it would jump up again. The longer the price stays above the EMA, the stronger the northward bias is.

Conclusion: The reality is that Create Resources Holdings shares are bound to rise. This is not a realm of fairy tale. I am not asking someone that is suffering from a severe asthma to try to become a marathon winner when at 65. Can I bet my socks on this matter? What if other analysts start mocking me, jeering at me, branding me a liar? Would I still have enough courage to stick to my forecast? Do I have any evidence to support my claim? I repeat, based on the analysis revealed above, Create Resources Holdings shares are bound to rise. Time will tell.

This article is ended with the quote below:

“In this business you have to know exactly what you are doing.” - Merlin Rothfeld

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/authors/azeez-mustapha

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

Iofina PLC - BUY

Iofina PLC shares (LSE:IOF) are expected to continue going up from the upward breakout that occurred on August 24, 2012. Brave speculators stand a chance to harvest financial rewards from this market. The present price situation is testing the courage of investors and traders, no matter the type of trading approach and knowledge possessed.

Normally, a market bias happens in retrospect. The analysis of a bias for today and tomorrow is merely a game of possibilities. Yet, it is possible that the trend will continue upwards.

Technical Forecast

The stock had been trading in a tight range prior to the current bullish run. From June 2012 the price started to consolidate to the upside, and the upside effort turned into a bullish breakout, starting from August 24, 2012. This new bullish trend has held its ground since then. For this technical analysis, Average Direction Movement Index (ADX) period 14 and MACD (default parameters) are used. The ADX 14 is above the level 40, showing that the current uptrend is strong. It might even go to levels 50, 60 and 70. The ADX +DI is far above its -DI counterpart - which shows a serious bullish pressure. Moreover, the MACD histogram and signal lines are all clearly above the level zero. What we have on this chart is a Bullish Confirmation Pattern. As long as this pattern is in place, the market will continue to rally.

As this forecast was being prepared, the stock was trading at 70. The nearest support lines are 60.50 and 60.00, which are expected to check immediate bearish attempts. The nearest resistance lines are 80.00 and 80.50, which are expected to be violated as the bullish attempts continue. Though humans have a far-from-perfect record when it comes to guessing the future, the probability exists that this market would continue upwards. You would need to ride this bullish trend for as long as possible. Do not be in a hurry to sell this stock: haste is slower than patience.

Conclusion: The signal we have on Iofina is BUY. 80% to 20% statistical possibilities are present in the financial markets. Most of our gains are realized from a few winning positions that are allowed to run. The colossal gains of a few positions are realized from those who speculate indiscriminately on too many stocks and end up damaging their portfolios. By picking your stocks carefully, you have a better probability of having average winners that are bigger than average losers.  You should bear it in mind that the type of chart analysis used here shows that the northward pressure is bound to continue. Having said so, this means that shrewd speculators may want to open long positions only in the direction of the trend, trusting that the present market bias will hold.

This article is ended with the quote below:

“Trading for a living involves more than getting in and out of the market at the right time, and more than thinking about moving averages and indicators. Trading is a business, not just a job, and every business in the world has to be managed. Every business involves the managerial functions of organizing, planning, delegating, directing, and controlling. If you, the trader, are to perform these functions well, you must learn to practice self-discipline and self-control.” - 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/authors/azeez-mustapha

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

Joe Ross: Trading Is a Calling

LEARN FROM MARKET WIZARDS - PART 4

Joe Ross has been described as one of the most eclectic and one of the most experienced traders in the world. He’s a BSc in Business Administration (University of California, Los Angeles) and an MSc in Computer Science (George Washington University, Virginia). As far as trading and investing is concerned, he got his feet wet when he was as young as 14 years old. He uses trading approaches that generate constant gains from the financial markets. In the year 1988, he established an institution named Trading Educators Inc, and has been the head of that business since then. Numerous traders have been trained by that institution. Joe says this about himself: “When I began trading 56 years ago, self-discipline and self-control were two of the largest mountains I had to move in order to become a successful trader. Doing so was not easy… In my 77 years of living, I've experienced many events and changes in the markets. I was born during the "Great Depression." Times were tough for most people. I can remember not having anything to eat. I remember being frightened by the news of the Japanese invasion of Pearl Harbor. I've witnessed numerous speculative booms and busts. Recessions, depressions, market crashes, bank failures, the S&L crisis, wars and rumors of war, and vicious inflation have all occurred during my lifetime.”

Great Joe is known as a Super Trader and a Market Wizard - having been victorious in the past vicissitudes in the markets. He’s mentioned in Who’s Who in America. He’s known for some proprietary terms like “Ross Hook, the Law of Charts, and Traders Trick Entry.” He has written 12 important books about trading and investing. These books have been translated into many languages other than English. Today, Joe Ross still trades, invests, coaches, instructs, and writes. Many people have benefited immensely from his trading lessons, including me. We really owe him a debt of gratitude. I think the best way to meet this Trading Master is to visit his website at Tradingeducators.com (you can be exposed to his trading world by subscribing to his newsletters.).

Lesson

There are helpful lessons we can learn from Joe. What can be learned from him are what most market wizards have in common. These are just a few lessons out of the numerous that Joe offers:

It takes many years to become a permanently successful trader - not weeks or months. One who learns fish farming for 5 years would tend to be more successful than one who learns fish farming in just a few weeks. Once you reach the level of competence in trading, you can continue to enjoy your career for as long as you exist.

It pays to ride the trend. There are winning strategies that can be used for consistent gains in the markets. Simple strategies can also be very lucrative. With those strategies, you can beat the markets every single year.

You need rock-solid discipline to stick to what you know are right in the markets. Traders tend to become undisciplined when they become greedy. They’re often ruined by greed. You can avoid loss by sticking to your winning trading ideas or getting out of the markets when the loss is still small.

Conclusion: Invariably, speculators who are still struggling hopelessly with the markets often pray that the secret of successful traders be revealed. In the articles in this series, I hope that your trading career would be transformed by reading proven advice from victorious market wizards. Terrific trading methodologies give us but a glimpse of what lies ahead in a market, they assures us that some informed decisions can be made. The future of our trading career will be glorious, satisfactory and rewarding. You can count on that, confident that trading and investing can be a career of a lifetime, and that it brings financial freedom.

This article is concluded with some quotes from Joe Ross:

1. “Although a positive mindset can do wonders, it's essential that you be flexible. It's necessary to be realistic when setting goals. Research studies have shown time and time again, that when we set goals that are too high, we fail and give up. That's why people can't lose weight or keep New Year's resolutions. They set goals that are impossible to achieve. So set realistic goals. You don't have to take home huge profits every day, you don't have to trade every day, and you don't have to stay with just one market and one time frame. Accept what you can get.”

2. “It is often difficult to stay upbeat. There are times when nothing seems to click. Your trading strategies don't work, or you may have trouble getting an accurate read on the markets. It's a common ailment. Depending on your past experience, there are times when the market doesn't seem to behave in the way you anticipate, especially if you trade your opinion instead of what you see.”

3. “Self-control is often the key to trading success. Masters of the markets are disciplined. They don't sporadically act on a whim. They develop specific trading plans and follow them. Trading is largely a matter of capitalizing on odds… Even though self-control is vital for trading success, many traders have problems with maintaining self-control. It's a common ailment not restricted to trading. You are not alone. Whether it is in losing weight or in breaking bad habits, people have great difficulty in maintaining self-control.”

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

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

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

What I’ve Decided to Do in the Markets

TREND FOLLOWING IT IS!

“The trending market is an ideal market to trade and make money. What trend following is not is prediction or forecasting about how the markets will go. Trend following is based on reacting to price, price and again, price. It is not based on trying to predict price directions.” – Michael Covel

Hello:

Perhaps the most crucial aspect of the dynamics of the market is their current bias whose relevance is due to the reality that it causes the nexus between trend development and the mindset of both Smart Money and Dumb Money. 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. Because of this, the dynamics of the market proffer crucial explanation of the popular ‘trading mentality,’ i.e. a field of study that attempts to expatiate on market reactions by analyzing the psychology of Smart Money and Dumb money. Owing to their characteristics, market biases proffer some speculative methods.

Biases happen any moment, and as such, they’re what we need to realize desired gains. Vividly, the bias ought to be in place, therefore positions sometimes mayn’t be opened in an extremely bearish trend or smoothed in an extremely bullish trend. Trading against the extremely bullish trend or extremely bearish trend isn’t the most crucial thing for a trader - the pundits of this style would merely have you misguided. The most crucial thing is the general trend. Our belief is that if a bias has started, it should keep on going. It’s much more for that to hold than it to be void especially when positions have been opened. At times, a bias may last more than expected. It can thus be challenging for speculators to keep on riding their profits when the bias still holds and not to exit based on fear.

When an analyst thinks a market is oversold, it isn’t oversold. Being oversold or being overbought is simply something imaginary. This should be construed to mean a similar thing from a financial newscaster who announces that an economic item is rated a ‘buy’ due to a turning level. No matter how logical the explanation is, or the kind of ‘degree’ they hold, whether they’re wearing a $5 tie or $50 tie, in most cases they’ll only achieve 50% accuracy in their analyses. If they’ve more than that, it means that they short weak markets and buy bull markets.

An adept rule-based speculator enjoys more free time than a mechanical trader. Adeptness has to do with the tendency to go with the flow of the markets. Mean reversion speculation is anti-trend (selling in an uptrend and buying in a downtrend, looking for turning points). Many traders feel that an overextended bearish market could be ready to rally and do so protractedly. But the reality is that it might still fall by 600, 800, 1000, 1300 pips before it even goes up. One of the major reasons traders buy renowned and world-famous pairs is that analysts talk about them and investors are often aware of them. If the overextended market continues in the direction that people don’t expect, then investors get whacked. As a result of this, everybody would be looking forward to strangling the prime economic forecaster, as investors holding other instruments are apprehensive. Invariably, you’d see some suave ape who’s shown on the screen or other type of media, often a forecaster whose studies were published in the previous year and adjusted some days prior to the occurrence, safeguarding his studies by reducing the likelihood while announcing that he still prefers the scenario since it remains overextended. Or it might be that the pair displays a temporary halt in its journey and some speculators feel it’s now great to enter contrary to the established trend and realize gains in counter-trend or mean reversion trading. They may not realized, yet they’ve fallen in love with a wrong direction and would go on opening positions against the trend, usually with heavy losses, till they receive a margin call or forfeit their portfolio.

I’ve experimented seriously with over 120 trading ideas, but trend-following has stood the test of the time. Thomas Stridsman (CTA), who’s been developing strategies for

model-based investing since the early 1990s, declares that he’s decided to do only trend-following. The notion behind this idea is plausible, anywhere the strongest trend is, is where returns can easily be realized... For trading purposes, I’ve decided to do only trend-following; and only trend-following I’ll do. This kind of trading approach has proven timeless. We make gains while the trend is still extant. 

Could I say I’m better than other traders? I feel I’ve an advantage in believing that any trader can be successful, myself included. That’s what my methodology is all about. As a result of this, I shrug off all misleading moves and noises regularly. I’m not misled by incongruous financial data that have no long-term effect, since I stay focus on my time-tested analysis, which has to do with offering myself with high-risk, low-reward opportunities that would ensure my ultimate victory in the markets.

Those going with the flow of the markets are aware that even if a trend has been happening for a long time, and they think there are still more gains to make, they may still trade in that direction, and as often as not, they’d win. Never forget that the Forex market is the best trending market that exists, and therefore the best trading method to use on it is trend-following. It’s no secret that trading with the trend will normally provide the best results.                                     

I’d prefer to conclude this article with these quotes:

“…A truly great trader will learn to take his money off the table and be satisfied with what he made.  It is the greedy trader who overextends himself.  It is the novice trader who fights the trend.  It is an even greater novice who believes that there is such a thing as "support.” – Joe Ross [Paraphrase]

“The trending market is arguably the type of market that best lends itself to being traded and offers the greatest earnings prospects… The trending market is an ideal market to trade and make money… You should only trade in the direction of the main trend” – Thomas Wacker

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

Copyright (C): Fx Empire, LLC

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

Send the request to: saazalmu@yahoo.com

Yahoo! Messenger ID: saazalmu

http://www.ituglobalforex.com

NB: Trading has become a calling!

Get Ready To Buy Petroneft Resources Shares

The current market situation on Petroneft Resources (LSE:PTR) has now become extremely attractive for traders and investors. The shares price has reached a stage where it would soon favor the bulls. A new long-term bullish wave is expected soon (as the pernicious bearish pressure is repudiated). Then the price would start going up in a northward bias, since a northward bias would be of higher highs and higher lows, each low should create a new higher high; if bearish attempt fails. This would be an opportunity to create long orders.

Technical Forecast

This stock has already been in a very long-term downtrend, as the chart below shows. Four Exponential Moving Averages (EMA period 10, EMA period 20, EMA period 50 and EMA period 200) are used in this analysis. The color representing each EMA is shown at the top left on the chart. The EMA 200 confirms this long-term downtrend. In the past the best strategy would have been to go short, or opening new short orders as the price retraced to the EMA 10 or 20. But now this approach is no longer valid, because further short order is no longer recommended. The indicators are now showing a trendless market. The logical thing to do now is to get prepared to buy. WHEN?

The market began a weak rally in August 2012, but further rally was rejected within the same month. The price has been corrected lower a little. In this month, the price found a unique bottom at 6.875, and it is not expected to go down beyond the level at 6.00 (and the demand level at 5.50): if this forecast would be valid. After all, it is expectations for the future that are traded on the stock market. The stock was trading at 7.375 as this article was being written. There are supply zones at 7.50 and 8.00. Eventually, this stock would become very attractive for buyers when the EMA 20 crosses the EMA 50 to the upside. The currently ineffectual and superfluous southward pulls would soon be obliterated.

Conclusion: Petroneft shares should rise after an overextended bearish run. Going short in the present price situation, as it is true of similar market conditions, has often been likened to grappling with a leopard. The stock markets proffer adequate predictability for us not to obfuscate matters by prevaricating trading methodologies.

This article is ended with the quote below:

“The odds are you won't get it perfect the first time you try it. However, in life as in trading, he or she who waits watches others harvest. They must live with the pain of regret because they didn't act, they delayed, and they hesitated.” - Loiuse Bedford

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/authors/azeez-mustapha

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

Royal Bank of Scotland: What Next?

On August 1, 2012, I wrote an article about Royal Bank of Scotland Group (LSE:RBS). Here is the link to that article: http://www.advfn.com/newspaper/azeez-mustapha/7605/royal-bank-of-scotland-group-buyers-gain-upper-hands. In it I said that buyers would gain upper hands, especially following a long period of bearish run. The technical analysis used showed that the stock was supposed to rally after an extended downward movement. The technical reason behind this was also given. The forecast has proven to be correct as the stock perked up - not for a somber future - but a brighter one.

Some readers and speculators ask, WHAT NEXT? As the recent chart on RBS shows, institutions are now holding long orders as some misinformed private traders still remain short. This signifies a nice chance to maintain bullish orders on the market. 

Technical Forecast

As far as this market is concerned, the price has turned bullish. This has been imputed to bullish pressures, as the price now possesses the temerity to subjugate bears conspicuously. Since late July, the price has been trying to go northward despite some pullbacks in the price. For this analysis, Parallel Trendlines and Relative Strength Index (RSI) period 14 are used. The Trendlines show that there has been a sharp rise in the price for several days, especially since the beginning of September 2012. The bullish pressure would be valid as long as the price stays above the lower Trendline (price is expected to break out of the upper Trendline as the northward rally continues). Even if the price breaks the lower Trendline to the downside, the bullish bias would still remain intact; as long as the RSI 14 stays above the level 50. Even this forecasted downward correction would only enable new buyers to enter at a lower price in the context of an uptrend. 

Right now, there has been some insignificant bearish pulls. This is normal and expected, given the fact that the RSI 14 has gone into the overbought region (a correction was bound to happen here). Once again, as long as the RSI 14 remains above the level 50, the current bullish run is valid. When this article was being prepared, the price was closed at 274.4. As the market opens, immediate support levels would be around 274.00 and 265.50; immediate resistance zones that the price would need to break before going further up would be 275.00 and 275.50. I would recommend only long positions at this stage. Going short could be catastrophic. Irrational behavior may preclude traders from making wise decisions.

Conclusion: Though trading the RBS shares can be an emotional issue, careful and honest analysis of what the market is doing will help us realize the fact.  Probably one of the best things speculators can do continually to their advantage is to buy pullbacks in an uptrend (or sell rallies in a downtrend). 

This article is ended with the quote below:

“I believe the market speaks in terms of price.” – Ken Long

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/authors/azeez-mustapha

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

Anton Kreil: BBC Million Dollar Trader

 LEARN FROM MARKET WIZARDS - PART 3

Anton Kreil was born in Liverpool in 1979, into a poor family where money was a very scarce commodity. During his early years, he’d to live through a series of hard times, but at the age of 13, he decided to try whatever he could do to get out of poverty and become successful in life. From the age of 18-21, he was at Manchester University, where he studied Economics. At this time, he’d decided not to measure his own income by the average national salary. He worked as an institutional trader for Goldman Sachs, Lehman Brothers and JP Morgan, having built a profitable portfolio for himself prior to this period. 

He became a Vice President of JP Morgan European Equities at the age of 26, and retired from the investment banking industry at the age of 28. He toured the world and went back to the UK in 2008 to produce a BBC program titled: Million Dollar Traders. Several neophytes were provided with funds to speculate on the markets during the credit crunch: they even did better than some hedge funds managers. Although certain contestants failed emotionally and had to drop out of the program, it became apparent that ordinary folks will really perform like skilled traders if given proper training. That show became popular throughout the world - something that threw Kreil into limelight. Kreil is currently the CEO of the Institute of Trading and Portfolio Management. He plans to go to space very soon and make an attempt to become the first trader to make a trade from space.

Lesson

There are helpful lessons you can learn from Anton Kreil.

a) Your background doesn’t determine your future. Even if you were born into a poor family, that doesn’t mean that you’d be poor for the rest of your life. Your life is what you make it.

b) As a trader (especially as a professional), if you can continue in this journey to financial freedom (a goal that many traders like Anton Kreil has reached), you’d eventually not need to judge yourself by average national salary. I’ve seen financial experts calculating the income of a lifetime of a BSc, an MSc or a PhD holder, they never can calculate what a great trader might earn in his lifetime. It’ll usually be far bigger than what an average civil servant/employee earns in her/his lifetime. You can trade your way to financial freedom.

c) You can experience breakthrough if you’re mentored and coached by successful traders. You can look over their shoulders, see how they trade and imitate them to your own advantage. Just make sure you choose mentors that have track records.

d)  A combination of fundamental and technical analyses is important. Endeavor to know the fundamental factors affecting the instruments you plan to speculate on, then look at your charts and trade what you see.

e) Kreil is big a believer of truncating positions that don’t go in the expected direction, while giving profitable positions enough leeway. It’s one of his simple secrets. We’ll surely do ourselves much favor by trading in the same manner. He doesn’t trade against the trend, and you could choose to do that. The market that is rated as being oversold or overbought might still go far further than that, even it’ll reverse. Those who trade against the trade might be forced out of their positions before the markets turn eventually. Running losses with the hope that they’ll go back to positivity would eventually backfire.

Conclusion: Anton Kreil was interviewed in TRADERS’ (January 2012) - one of the best interviews in this year. More information about him can also be found at Antonkreil.com. This article is ended by one of his quotes.

“Success in the long run for me is defined as consistently positive returns with a consistency for never losing too much money when things go wrong. For those starting out I think it is very important to develop a trading strategy that will stand a very good chance in working through all business cycles. The world looks very different now to what it looked like in 2006, 1999, 1991, 1982 and is forever changing. Trading strategies that depend on a certain market environment will always get found out when the market environment changes. As a trader you want to be trading from now till the day you drop dead.”

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

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

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

Send the request to: saazalmu@yahoo.com

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

http://www.ituglobalforex.com

Monthly Trading Signals (September 2012)

“The mindset that you brought into trading is not the mindset that will bring success in trading.” - Rande Howell

There are numerous pairs and crosses on the currency markets that have gained or lost tens or hundreds of percentage over the calculable period of time. These gains and losses were caused by positive and negative fundaments events. Increase and decrease in the values of those currencies were results of significant gains and drops in the respective countries’ economies.  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: EURUSD

Order: Buy

Entry date: September 3, 2012

Entry price: 1.2565

Stop loss: 1.2365

Take profit: 1.3163

Status: Open

Profit/loss: 250 pips

2. Instrument: USDJPY

Order: Sell

Entry date: September 3, 2012

Entry price: 78.17

Stop loss: 80.17

Take profit: 72.17

Status: Open

Profit/loss: -8 pips

3. Instrument: AUDNZD

Order: Sell

Entry date: September 3 , 2012

Entry price: 1.2815

Stop loss: 1.3043

Take profit: 1.2243

Status: Open

Profit/loss: 14 pips

4. Instrument: AUDJPY

Order: Sell

Entry date: September 3, 2012

Entry price: 80.26

Stop loss: 82.31

Take profit: 74.31

Status: Open

Profit/loss: -100 pips

5. Instrument: AUDCHF

Order: Sell

Entry date: September 3, 2012

Entry price: 0.9784

Stop loss: 0.9998

Take profit: 0.9198

Status: Open

Profit/loss: -29 pips

6. Instrument: NZDCHF

Order: Sell

Entry date: September 3 , 2012

Entry price: 0.7623

Stop loss: 0.7843

Take profit: 0.7680

Status: Open

Profit/loss: -57 pips

7. Instrument: AUDCAD

Order: Sell

Entry date: September 3, 2012

Entry price: 1.0097

Stop loss: 1.0307

Take profit: 0.9507

Status: Open

Profit/loss: -72 pips

8. Instrument: USDCHF

Order: Sell

Entry date: September 3, 2012

Entry price: 0.9557

Stop loss: 0.9557 (breakeven stop)

Take profit: 0.8960

Status: Open

Profit/loss: 112 pips

9. Instrument: USDCAD

Order: Sell

Entry date: September 3, 2012

Entry price: 0.9859

Stop loss: 1.9859

Take profit: 0.9263

Status: Open

Profit/loss: 70 pips

10. Instrument: NZDUSD

Order: Sell

Entry date: September 3, 2012

Entry price: 0.7985

Stop loss: 0.8188

Take profit: 0.7388

Status: Open

Profit/loss: -140 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. Many market speculators use only the fundamentals to buy or sell in the markets. They don’t enter in an uptrend and they abhor truncating their losses. Even less percentage of market speculators would be courageous enough to trade a pair/cross when it’s already gotten overextended (they’d even prefer to smooth their positions at those phases).

Conclusion: As market speculators, we need to close many losses sometimes as a result of the tendency to overtrade and open too many positions. It’s better to go for ultimate profits like those big financial institutions do, instead of determining what to gain on daily or weekly basis.

This article is concluded with the quote below:

“Trading is craft and knowledge put into practice, and psychology is deeply involved in the sense-making that goes along with that. The journey toward mastery is a psychological one.” - Ken Long

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

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

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

Send the request to: saazalmu@yahoo.com

Yahoo! Messenger ID: saazalmu

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

Monthly Market Updates on Exotic Crosses (September 2012)

“As a trader, one of my daily affirmations is: Detach from the outcome of each trade.” – Dr. Janice Dorn

Certain attempts are needed to analyze the markets objectively. One shouldn’t be subjective, except the analytical tools themselves are ineffectual. Everyday speculation isn’t mandatory; and some traders prefer to look at the Big Picture. Certain reversals took place last month - significant reversals, and as such, the month of September would now show whether the counter-trend reversals would be sustained or the overall trends would resume. Risk control on equities should also be borne in mind, for the markets won’t always do want you want them to do (they’ll do only want they want to do), irrespective of your will. Nevertheless, trading is really fascinating. Gone are the days when the financial markets were monopolized by financial trading and other types of institutions. Our appreciation goes to the World Wide Web and cutting edge technological devices. Forex has long been easily traded by retail speculators. Besides, the benefits of this vast market have been appreciated by multitudes. But in the presently turbulent price phases, the effort of many companies to satisfy the want of the speculator is huge.

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

AUDUSD

Primary trend: Bearish

This pair was weakened last week and it seems it would continue doing so. We’ve a Divergence Pattern on the chart as the bears still show of their strength. For anyone who’s interested in shorting this pair, it’s still relatively early to do so. The support levels at 1.0300 and 10.200 can be breached this month as the pair weakens further. The logic here remains that, if the USD, which is weaker than some currencies like EUR, USD and CHF, could be stronger than the AUDUSD, then it is logical to short this pair.

AUDJPY

Primary trend: Bearish

The outlook on the AUDJPY is similar to that of the AUDUSD - something that further confirms the weakness in the Aussie. Right now we have a Bearish Divergence Pattern on the chart representing this cross. The ADX 14 line just crossed the level 30 upwards, as the MACD histogram just fell below the level 0, while its signal line is heading downwards. The sell signal is still early.

EURNZD

Primary trend: Bullish

This cross is now showing the relative strength as opposed to the EURNZD. We now have a bullish Confirmation Pattern at its early stages as both the signal line and the histogram of the MACD have newly crossed the zero line upwards. The ADX +DI is now above its -DI counterpart. The resistance lines to be broken this month would be those at the levels 1.5700 and 1.5800.

EURCAD

Primary trend: Bullish

What’s happening on this market clearly shows that the EUR is not hopeless at the moment. Further bearish pressure has been rejected after months of downtrend. The price happens to be bottoming out right now, as the indicators on the chart show a Converging Pattern. This makes us concludes that sellers are getting weaker and weaker as the price is poised to go up. There are support levels at 1.2300 and 1.2250.

AUDNZD

Primary trend: Bearish

The Aussie is even weaker than its Kiwi counterpart as shown by the price chart representing this cross. This is clearly a weak market, and as weak as it looks, going short on it looks very tricky. The MACD gives a sell signal - as its signal line and histogram have already crossed the zero line to the downside. The -DI of the ADX itself has crossed its +DI counterpart to the upside.

GBPCHF

Primary trend: Bearish

The GBPCHF consolidated lower in the month of August 2012. We’ve a clean ‘sell’ signal as the indicators on the chart show a bearish Confirmation Pattern - something that is still early enough to be taken advantage of. The ADX line has crossed the level 30 to the upside as the MACD itself have had both its signal line and the histogram crossed the zero line to the downside. I would short this instrument.  

Conclusion: The end results of our trading activities are gains. The summary of everything is that, we trade for pecuniary gains, just like everybody. Some must lose for others to gain - and vice versa. You’re not to be told before you acknowledge that life itself is a game of chance. But why do some find it difficult to be triumphant in the markets? Why does it seem that many of your orders tend to go negative? It all boils down to some trading biases. Regrettably, most speculators fail to learn form their errors - the errors that bar them from the coveted trading progress. Lessons from others could be better. Speculators come to ruin not as a result of bad brokers, poor market information or malfunctioning platforms, but as a result of their dangerous trading styles.

The article is concluded with the quotes below:

“When I board a plane, I know there are risks, but I don’t let that stop me from flying. Years of Air Force training helped me develop an awareness of flight safety and emergency planning. I know how to put on an oxygen mask, how to open the emergency doors should I need to, and where my seat is in relation to the exit rows. In other words, I accept the risks because they're tolerable, and because I’m prepared for them. Similarly, my training through [a trading institute] has helped me develop an awareness of risk management and the need to plan for worst-case scenarios in the markets.” - R. J. Hixson (square brackets mine)

“Optimism bias refers to people’s tendency to believe that they are better than average, and that misfortunes are more likely to happen to other people rather than themselves. Buyers and sellers in zero-sum markets believe that they have the edge over the other party in the transaction; otherwise the market would not exist.”  - Dr. Woody Johnson

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

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

  

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

Send the request to: saazalmu@yahoo.com

Yahoo! Messenger ID: saazalmu

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

Aquarius Platinum Offers a Money-making Opportunity

There is now a perfect opportunity to make money on Aquarius Platinum Limited. The company shares (LSE:AQP) are now ready to take off and skyrocket, following a long period of battering by sellers.  This is valid because the more extended the selling pressure is and the more the price finds more robust demand zones, the more probable it will be for the price to stop going down further and give long signals as the bearish pressure becomes ineffectual. Attempts at dependability on the markets are what we know as chart analysis (something used in locating the next possible bias).

Technical Forecast

The company stock has been an extended downtrend. The price has been falling since March 2012. From a peak of 160 in March, the price fell to a low 34.4 on August 12. This would have richly rewarded short-sellers. The trend is your friend indeed while it lasts! It now appears that the price will not continue its downward push as explained here. Several bullish attempts failed in the month of August as the Stochastic fell far into the oversold region in the same month. However, the price has constantly failed to find new significant lows. The Exponential Moving Average (EMA) 21 period and the Stochastic default parameters are used on the chart below.  The price has now closed above the EMA 21 as the Stochastic is heading upwards. This is a good BUY signal.

Starting from August 6, a solemn bullish attempt occurred and has remained valid till now. Everything on the chart is now pointing northwards. This stock is till very cheap for those who want to buy it. Those who catch the early trend are the ones that will benefit from it the most. As it was being analyzed, the stock was trading at 41.36. The demand zones that bears find it difficult to rape are at 41.00 and 39.50, as the supply zones at 42.00 and 42.50 will soon come under fire.  Take profit levels are invariably found with the rule of the thumb, so that the possible expectancy of a position is measured. Honestly, one cannot give a precise target level for this market as the big rally that will ensue would disrespect distribution zones and continue moving up, since the positions that do not go up protractedly would be smoothed when they are yet to meet their take profit levels. I am convinced that analyses that are easy are the ones that would be easily stuck to with determination.

Conclusion: Aquarius Platinum is one market in which one can go long right now and get rewarded eventually. While the world is busy pointing accusing fingers at their politicians and regulators, traders and investors are active in the markets, making money.

This article is ended with the quote below:

“If you're working like a Trojan, learning how to trade, just know that a brighter future awaits you. A time where you won't have to exchange hours for dollars and where you can live by your wits, earning in a few hours what others earn in a month. With dedication and support, that time may be closer than you think.” - Louise Bedford

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.”

Send the request to: saazalmu@yahoo.com

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

Bellzone Mining Shares Will Fall Further

It is expected that Bellzone Mining Shares (LSE: BZM) will continue to fall lower and lower as explained in this article. Never think a price will not fall any further as a result of being appearing very cheap. Bullish corrections would merely enable sellers to enter the markets at higher prices in the context of the current downtrend. This is a market that is being pushed lower and lower by bearish pressure.

Technical Forecast

This market has been in a downtrend - that is the overall trend. Average Directional Movement Index (ADX) period 14 and Moving Average Convergence Divergence (MACD, default parameters) are used for this analysis. What we currently have on the chart is a Bearish Confirmation Pattern. The ADX shows that the market pressure has been low for a considerable amount of time, yet the -DI (Directional Index) is above its +DI counterpart, emphasizing the bears’ supremacy in spite of what is happening right now in the markets. The only logical thing to do here is to look for a sell signal. The market corrected higher last week, a Doji candlestick pattern formed on September 10, 2012 (showing the indecision in the market), and then, the price began to come down further. You may take a look at the chart.

This is a SELL signal, no matter what we think. At the time of writing this article, the Bellzone stock was trading at 14.25. The nearest distribution zones are 15.00 and 15.50; but the price is expected to trade lower and test the accumulation zones around 13.00 and 12.50. This still portends a clean signal showing expert distribution by professionals. In contrary, looking for sustained volatility to the upside is not recommended. Even after the market has been corrected higher in the near-term, it would signify some clandestine short-selling by institutions, just as a pullback in a downtrend is often an indication of institutions that are buying into a bull market. Experienced traders have learned to accept the fact that the market could not care less, it is not even aware of what our positions are.

Conclusion: It is obvious that a trading advantage can be gained with chart analysis. This market is weak. Fright causes prices to nosedive massively, as covetousness causes prices to rally massively occasionally. Chart analysis and market reading constitute a method of measuring the biases present in market players - something that remains timeless.

This article is ended with the quote below:

“There is no trader who only earns profits. Loss-trades do not mean that the trade is a bad one or that the whole strategy is poor. A trade is only then a bad one if it is executed randomly, emotionally and without a plan and a strategy.” - Florian Erik Neinert

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.”

Send the request to: saazalmu@yahoo.com

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

Dr. Van K. Tharp: Peak Performance Trading

LEARN FROM MARKET WIZARDS - PART 2

Dr. Van K. Tharp is a world-renowned trading coach - one of the best on this planet. He’s a unique global expert when it comes to trading. He’s been coaching people to reach their best in trading and investing. This has been his calling since 1982. In countless instances, he’s encouraged others to surmount challenges when it comes to creation of trading strategies, trader’s mindset and behavioral biases, and other areas of challenges in trading. Bagging his PhD in psychology from the University of Oklahoma Health Science Center in 1975, he’s studied and researched distinct traders and investors (market wizards included) and has developed models for profitable speculations in the markets. He’s devised unique presentations for financial institutions and has showcased them all over the world. He’s been a guest of expositions and conferences the world over. He’s the only trading coach included in that best-seller, The Market Wizards: Interviews with Great Traders (Jack Schwager). He’s been featured in world-class trading publications, and has authored best-sellers like Trade Your Way to Financial Freedom, Super Trader - Make Consistent Profits in Good and Bad Markets, etc. A regular free newsletter from his Institute can be requested at Vantharp.com.

Dr. Van himself has declared without mincing words that: "Trading and investing are very simple processes and we human beings try to make it into something much more complex. Unfortunately, we have a lot of biases that enter into trading decisions…I believe people get exactly what they want out of the markets and most people are afraid of success or failure. As a result, they tend to resist change and continue to follow their natural biases and lose in the markets. When you get rid of the fear, you tend to get rid of the biases… As for risk, most people don't understand it, including a lot of professionals, and what's really interesting is that once you understand risk and portfolio management, you can design a trading system with almost any level of performance." (Vantharp.com, homepage).

Lesson

There are winning trading concepts espoused by Dr. Tharp. These concepts may help you too. Having basic understanding of these concepts would surely help you gain a better insight into trading. Below are some of them of them (this is not a complete list):

Psychology of trading: There are many psychological issues affecting traders, like gambling, perfectionism, inordinate fear and huge losses. For example, trading without stop loss or betting too big is gambling. Perfectionism doesn’t help because best traders also lose; only that they still make average gains that are much bigger than average losses. Fear might make use act irrationally. We may even shy away from taking trades that could be winners. All these biases merely lead to huge losses. Traders need to work on themselves to overcome these issues. 

System development: Trading strategies themselves don’t make money. It’s how they’re implemented that enables them to help traders realize gains. Most people buy trading systems but don’t follow the rules that come with them. This still boils down to knowing what the best are, and sticking to them. The best trading system can lead to a margin call if handled by an inexperienced and undisciplined trader, whereas the worst trading system can realize long-term profits if handled by disciplined and experienced traders.

Position sizing: This aspect of trading shows how much one risks per trade. How many shares or contracts?  Inability to apply effective position sizing (sometimes referred to as money management) is often the reason for accounts that go kaput.

Expectancy: One of the secrets of successful traders is to risk less than the predetermined potential returns. Like risking $1 to gain $2 or better $3. A risk-to-reward ratio of 1:2 allows a trader to survive with a hit rate of 50%, and a risk-to-reward of 1:3 allows a trader to survive with only 33.3% hit rate. The higher the reward, the better. Positive expectancy has to do with the benefit your trading system can generate over time. Trading systems that use no stops or use risks that are bigger than rewards are worse expectancy systems.

Business planning: The financial market owes you nothing. It may tease people with easy money and later take it away when it becomes irrational. If you really mean to be a winning trader or investor, Van says that you’d need to approach the practice of trading with the same level of rigor with which you’d approach a high level of human endeavor or business.

Conclusion: I came across Dr. Van Tharp and his works at the time I was contemplating to quit trading. His works changed my mind, and I continued to press on. I’ve never regretted that decision till now. He is one of those individual experts in trading who’ve had tremendous impact on my career. I’m grateful for how his concepts have benefited me and many people around the world, either directly or indirectly. If you also have tremendous challenges in trading, you can enlist the help of a very good coach or trading mentor. Indeed, we have many good things to learn form market wizards.

This article is concluded with more quotes from Dr. Van Tharp. It can be seen in his monthly markets updates and they’ve to do with his view on the current market conditions:

“Crisis always implies opportunity. Those with good trading skills can make money in this market—a lot of money. There were many good opportunities in 2011 and, so far, many more in 2012. Did you make money? If not, do you understand why not? The refinement of good trading skills doesn't just happen by opening an account and adding money. You probably spent years learning how to perform your current job at a high skill level. Do you expect to perform at the same high level in your trading without similar preparation? Financial market trading is an arena filled with world-class competition. Trading requires massive self-work to produce consistent, large profits under multiple market conditions. Prepare yourself to succeed with a deep desire, strong commitment and the right training… But to capture those opportunities you must know what you are doing. If you want to trade these markets, you need to approach them as a trader, not a long-term investor… Trying to navigate these markets without an education is hazardous to your wealth.”

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.”

Send the request to: saazalmu@yahoo.com

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

Buyers Should Start Whetting Their Appetite for Red Rock Resources

The stock price of Red Rock Resources (LSE:RRR) will soon give traders and investors a great opportunity to buy at a very low risk and high reward price. They should start whetting their appetite, because the market would soon resume a long-term journey to the north. The reason behind this would be explained in the analysis below. The more intense the market pressure is, the more speculators react to the market. When the bullish pressure starts in earnest, those dogs who have recently gone short would be forced to smooth their positions at they abscond with their tails between their legs (after there begins a long-term rally).

Technical Forecast

This stock has been trending downwards for a very long period of time, as shown on the chart. 4 EMAs are used for this analysis (you can see the value and the color representing each EMA on the top left side of the chart). The EMA 200 confirms that the market has been weak for a very long time, and this is also supported by other 3 EMAs. In the past, price retracements into the EMA 20 or the EMA 50 gave swing traders excellent opportunities to short the stock. While it is true that sellers would have made good fortune in this market regardless of occasional counter-trend gaps, price spikes and bullish corrections. It is no longer safe to short this market, and it is not advisable to go long at this time. When would it be logical to go long?

The price has found major support zones and would constantly find it difficult to go further south. The price is currently ranging as it is trying to find some acceptance phase. Eventually, a dependable reversal in the market would start as the EMA 20 crosses the EMA 50 to the upside as the price closes above the latter and heads toward the EMA 200. This would be the best time to buy. The stock was at 1.9 as this analysis was being written. The support zones that would impede further bearish threat are 1.8 and 1.7. The resistance zones that would easily be breached ultimately are 2.0 and 3.0.There is no such thing as an everlasting trend in the financial markets. As a result, a reliable strategy is employed since it has good statistical approach that aids in pinpointing accumulation and distribution zones on a chart. This is an aforethought notion: it helps remove subjective and illogical decisions in the market. In addition, knowing when there is a rally makes us get ready to enter the market very cheap as we ride a winner, no matter what the pullbacks in the price portend. We would also do well to consider money management and safety measures.

Conclusion: Ability to scan the historical data has made us to develop a right perspective on Red Rock Resources shares, which is expected to start its northbound journey soon. At times, market analysts and trading experts must look at historical data so as to prognosticate what would happen tomorrow or in the short-term. Historical data and real-time quotes are available at www.advfn.com.

This article is ended with the quote below:

“If the beliefs you have about your capacity to manage uncertainty in trading are effective, the results will be reflected positively in your trading account.  The reverse is also true.  If the beliefs you bring to the management of uncertainty in trading are not effective, they will produce trading performances that show a capital drain on your trading account.” - Rande Howell

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.”

Send the request to: saazalmu@yahoo.com

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

Chariot Oil Shares to Plummet

Chariot Oil stock (LSE:CHAR) will possibly plummet as shown below. This proves to be valid as there exists more crucial price valuation than the intrinsic one. Even any supposed positive news might not help the stock to the upside. There are times when fundamental figures would be positive, yet certain stocks would still continue to weaken further. This presumed abnegation of any fundamentals could push the price up (futilely). Bad fundamentals would merely serve to push this stock farther south.

Technical Forecast

Technically, short-term trendlines and the Relative Strength Index (RSI) period 14 are used for this analysis. Looking at the chart, we can see that the current price phase requires some skill and experience to handle. On May 14, 2012, there was a massive gap in this market, as the price closed at 149.25 on May 11 and opened at 94.75 on May 14. This stands for a loss of over 5400 points in a relatively short period of time! Even on the day the gap occurred, the price was characterized by a bearish engulfing pattern candlestick as it trended downwards after that. From June 15 to August 7, 2012, there was a moderate bullish rise in the markets - as if it was preparing itself for sellers to enter at better prices. The RSI was above the level 50 within this period. On August 8, 2012, a new bearish phase started and has remained valid till now. What will happen next?

The trendlines drawn around the recent price development show that the market is expected to fall. This is further confirmed by the RSI 14 as it has already gone below the level at 50.  Very recently the price attempted to break the upper line of the trendlines to the upside as buyers were caught in irrational exuberance. These proved to be false breakouts since the 3 last candles that attempted to break the upper line failed to close above it. This is a SELL signal. The stock was trading at 106 when this article was being prepared. The nearest supply zones are around the levels at 107.00 and 107.50. These are supposed to act as a barrier to buyers’ interest: the price would test and attempt to break the demand zones at 105.00 and 104.50 as sellers gain further strength. Another further dip in the RSI could indicate further weakness in this market.

Conclusion: This analysis lends itself to the reality on chart for Chariot Oil. Breakouts above the RSI level 50 indicate bullish pressure and breakouts below the RSI level 50 indicate bearish pressure.

This article is ended with a quote from one of the best trading coaches in the world:

“If you attempt to do complex things with the market that require you to use more capacity than you have, then you’ll probably fail.” - Dr. Van K. Tharp

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.”

Send the request to: saazalmu@yahoo.com