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Sunday, December 29, 2013

Daily analysis of major pairs for December 30, 2013


At last, the USD/JPY succeeded in trading above the market level at 105.00. The bias is bullish and the price is expected to trade further upwards this week. 

EUR/USD: Last week, this pair shot upwards significantly and then pulled back. This pullback is supposed to be short-term; not going below the support line at 1.3700, for the Bullish Confirmation Pattern in the chart is still a valid thing. It is likely that the price would test the resistance line at 1.3900 this week or next week. 



USD/CHF:  Last week, this pair shot downwards significantly and then rallied. This rally is supposed to be short-term; not going above the resistance level at 0.8950, for the Bearish Confirmation Pattern in the chart is still a valid thing. It is likely that the price would test the support level at 0.8800 this week or next week. 

GBP/USD: This currency trading instrument trended significantly higher last week, closing at 1.6480. The price was able to test the distribution territory at 1.6550 before it experienced the current pullback (which is a great chance to go long when things are on sale in a context of an uptrend). The price would not go below the distribution territory at 1.6400, before turning upwards, for the bullish bias in the market remains extant. It is forecasted that the price could touch the distribution territory of 1.6550 again.

USD/JPY: At last, the USDJPY succeeded in trading above the market level at 105.00. The bias is bullish and the price is expected to trade further upwards this week. The next target is at the supply level of 105.50.

EUR/JPY: This cross is bullish, though the market closed as things went temporary on sale as a result of a short-term weakness of the Euro, which is also the reason behind the bearish correction on the EUR/USD itself. The price would, however, go up again.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

Eye-opening trading lessons: http://www.harriman-house.com/experttraders


Wednesday, December 25, 2013

Graphene NanoChem is a highly trending market - smiling broadly on buyers


 Graphene NanoChem stock (LSE:GRPH) has been a highly trending market; a favorable condition for traders and investors. You need trend before you harness gains in the market, and this is what exactly Graphene NanoChem offers. 


If the chart is moved backwards by several months, it would be seen that this market trended downwards earlier this year. Then, it was a nice and a predictable move. Right now, the price shot upwards out of the range that was formed in this month (note the upper and the lower Trendlines). This breakout has been so hot and serious. The RSI period 14 itself is already above 80, the overbought area. This is not an understatement. What does this mean? It means that there could be some pullback any moment from now, but it would be fleeting, for the price would skyrocket again. The ultimate target is at the supply level of 140.00.

Conclusion: This market is trending in a significant mode and it is a boon to buyers. Although this is technical analysis, some fundamental issues would have contributed to this. Besides, no-one would claim there is some insider knowledge. A religionist claims he has not swallowed any saliva during his recent fasting; is there any witness to the event in the gullet?

This forecast is ended with the quote below:

“The fact that 90 per cent of all traders lose money in the markets shows that mental training is missing in trading.” – Thilo C. Herr

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Is the price spike on IFG Group a booby trap?


IFG Group shares (LSE:IFP) have been making some upswings, followed by occasional downswings. Clearly, the bulls dominate the markets. They should have done so for the most part of the year. Now that they are doing it, it is with great determination, just like someone who was asked to say “yes.” But the person replied: “I can’t say ‘yes, yes, yes.”

On the chart, the EMAs 10, 20, 50 and 200 are used. The color that stands for each EMA is shown at the top left part of the chart. Basically all the EMAs support the bulls, which are now saying yes, yes. The EMAs are acting as a great support to the bullish bias: anytime the price dips into the EMA 10 or 20, a great ‘buy’ opportunity is generated. The price may ultimately reach the distribution territory at 166.0.

Conclusion: The price spike that recently affected IFG Group shares is a booby trap to bears, plus traders who set too tight stops. Nevertheless it is a good opportunity of buyers who would like to capitalize on this price action irrespective of the outcome of their last orders. Heroes never panic; they do not give up. Many traders faint in their minds because of fleeting losing streaks. Another though may tell you: ‘You’ll never make it anyway. So you might as well quit,” Being victorious in the markets is a lifelong process; not a one-time event.

This forecast is ended with the quote below:

“Trading, like any endeavour, any skill, is learnt through doing. We learn through trial and error, through having experiences and evaluating and learning from those experiences; and of course, our learning is accelerated if we have the support and advice of someone who is further along the path of development.” – Malcolm Robinson (Source: www.trade2win.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Sunday, December 22, 2013

Daily Trading Forecasts for December 23, 2013



EURUSD: This pair gave a bearish signal last week – something that is still valid. There has been some rally in the context of a downtrend (in the face of the extant Bearish Confirmation Pattern). Bullish threats seem to have been rejected at the resistance line of 1.3700; a point from which the price could plummet further.


USDCHF:  This pair gave a bullish signal last week – something that is still valid. There has been some rally in the context of a downtrend (in the face of the extant Bullish Confirmation Pattern). Bearish threats seem to have been rejected at the support level of 0.8950; a point from which the price could rise further.

GBPUSD:  This market was rough for most of the last week, giving no directional signal in favor of bears or bulls. For instance, the EMAs are in support of the bulls but the RSI period 14 is in support of the bears. Although it is more likely that the price would ultimately go in favor of the bears when a breakout occurs in the market, it would be wise to stay away until a clearer signal is generated.

USDJPY: The USDJPY moved upwards by over 170 pips last week, challenging the supply zone of 104.50 before retracing southward. The southward retracement would be temporary, for the price would soon trade further upwards.

EURJPY: Since a bullish signal was generated here in early November 2013, the cross has moved upwards by over 740 pips. However, this is not without some maniacal upswings and downswings in the price, whereas downswings tend to give opportunities to go long at better prices. The bias for this week remains bullish. The price closed at 142.32 on Friday.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

Eye-opening trading lessons: http://www.harriman-house.com/experttraders

Saturday, December 21, 2013

Jeff Cooper: A Trading Sharpshooter


LEARN FROM GENERALS OF THE MARKETS - PART 43

“Day trading strategies offer a shortcut in order to become profitable much quicker with a proven system.” – Marcello Arrambide

Jeff Cooper (not to be confused with another popular Jeff Cooper who was an American Marine and an expert on the use of small weapons) started trading in 1981 when he worked for his dad (at Drexel Burnham) who was managing funds then. Later, he left his dad to trade independently on his own. Since then, he’s become highly successful in making gains from the unpredictability of the markets. He’s written great books titled: “Hit and Run Trading I,” “Hit and Run Trading II,” “Hit and Run Lessons.” Apart from this, he’s released numerous educative materials for the benefits of beginners and advanced traders.

Lessons
Here are some lessons that can be learned from Jeff Cooper:

  1. Jeff fell in love with the art of trading and he was endeared to the markets. Do you love/hate trading? Do you love/hate the markets? What makes you love/hate trading/markets? You can’t make money from what you hate. For you to make it as a trader, you’ve gotten to develop unending love for the markets.

  1. There was a battle sharpshooter named Jeff Cooper, and there’s a trading sharpshooter named Jeff Cooper. The former was a US Marine and successful author on the use of small arms. The latter is a successful trader, market analyst, and an author of trading books.

  1. Jeff’s dad trained him, although he also garnered trading principles that work from other great names in the trading world – you can see the quote below. You’ve to get imparted knowledge from great traders. This is one of the things that have helped me a lot. As a dad, do you wish that your kid become a great trader?

  1. You don’t need to be working in an office before you reach your financial freedom. Jeff trades in the comfort of his home in Malibu, California (overlooking the Pacific Ocean), where he also offers help to many traders the world over via the Internet. Financial freedom is possible thru trading.

  1. Day trading, swing trading, position trading and investing can be mastered according to the one that fits your personality. Jeff has mastered day trading and swing trading. In fact, he’s one strategy called “Opening Range Breakouts,” which is a sort of Holy Grail to him. Whatever works for you - coupled with safe risk management – is your Holy Grail. This simply means losses won’t hurt your portfolio and gains would be moderately substantial.

  1. Trading since 1981 is no picnic. Serious traders take their career as a journey of a lifetime, not as a short-term stint. There are many types of financial markets that you can choose from.

Conclusion: The way to permanent victory in the markets is totally different than what most people would prefer. It’s not an easy way. However one can realize one’s aims with the right mindset and simple but powerful trading principles. Beginner traders may flinch when told of what it takes to be a successful trader. One thing to note is that the ultimate goals in trading are far more worthwhile than the transitory effort that needs to be made to realize those goals.

This piece is ended by a quote from Jeff:

“…The works of W.D. Gann and Robert Prechter have inspired me more than anyone else. It was from their writings that I discovered cycles, patterns, and psychology dominate the market, and that the news breaks with the cycles, not the other way around.”


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders


Thursday, December 19, 2013

The Bears Are Determined to Drag Tri-Star Resources Towards 0.1


The bears are bent on pushing the shares price on Tri-Star Resources (LSE:TSTR) further southwards. Sometimes the simplest truths are the best. A tree that is too young to support our weight when we lean upon it cannot kill us if it falls upon us. In this market, the bulls have proven to be undependable, and therefore, they should be shunned. 


The ADX period 14 is above 40 (showing a strong trend), while the DM- is far above the DM+. This means it is more dependable to follow the bears here. The MACD (default parameters) has its signal lines and histogram belwo the zero line. This means a Bearish Confirmation Pattern on the chart.

Conclusion: The best thing is to keep on selling on Tri-Star Resources until the price reaches 0.1. This means victory for patient sellers; and patience also for permabulls, who may be willing to sell only when a Bullish Confirmation Pattern occurs in the market. Waiting is hard. So impatient is a common trait in trading.

This forecast is ended with the quote below:

“As a trend-follower you typically have more losing trades than winning ones, but as long as you are disciplined in executing the time honoured strategy of cutting losers and running winners, your average win will outweigh your average loss and make you profitable overall. So I now look at losing trades as being part of a winning system.” – Jon Boorman (Source: www.tradersonline-mag.com)


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Edge Resources Shall Drop to 3.00 Eventually


It is more probable that Edge Resources (LSE:EDG) shall drop to the support level of 3.0 eventually, even breaking below it. This is a great possibility, for it is not uncommon for the price to sometimes drop like a stone, breaking the so-called psychological demand levels.


On the chart, the price is under the EMA 21 and the Williams % Range period 20 has long been in the oversold territory. The current upward retracement in the price is a trap for buyers. This is simply a fleeting increase in the price when the major bias is bearish. It is better to sell short at this time or when a major resistance level, say 7.00, is tested. Do not fear the bulls’ machinations here. The market is bearish. Be steadfast and conquer your fears.

Conclusion: It would be a false expectation to think the price on Edge Resources shall turn bullish right now. The root of the trader’s problem is broken expectations; if not dealt with, they mature into anger and bitterness. During a winning streak it is easy to think that it will continue forever and we will often be exposed to the good side of trading. But the markets have ways of breaking those expectations.

This forecast is ended by the quote below:

“A realistic plan will make you a winner. But that's only half of it. You also need training, practice, and experience. When you combine all these factors into a long-term strategy for success, you'll become one of the few traders who have mastered the markets. The more calmly you'll trade, and the higher will be your chance of maintaining profitability.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders


Sunday, December 15, 2013

Daily Trading Forecasts for December 16, 2013



EURUSD: It seems this pair may not be able to go above the resistance line of 1.3800, especially in the face of a current lease of strength in the USD. However this view may not be valid as long as the price is able to stay above the support line of 1.3700, otherwise, one would need to switch to the side of the bears.


USDCHF:  It seems this pair may not be able to go below the support level of 1.8850, especially in the face of a current lease of strength in the USD. However this view may not be valid as long as the price is able to stay below the resistance level of 1.8950, otherwise, one would need to switch to the side of the bulls.

GBPUSD:  The protracted bearish correction on the GBPUSD has finally become a bearish signal. From the distribution territory of 1.6450, the price has dropped by over 150 pips. The EMA 11 has crossed the EMA 56 to the downside, and the RSI period 14 has crossed the level 50 to the downside. It is high time one switched one’s position to the side of the bears.

USDJPY: The USDJPY is a bull market – irrespective of the bearish threats that are present on it. As long as the price is able to stay above the demand level of 102.00, the bullish bias can still be mentioned of as being valid.

EURJPY: This cross is also a bull market – irrespective of the bearish threats that are present on it. As long as the price is able to stay above the demand zone of 140.00, the bullish bias can still be mentioned of as being valid. Should the price go below that demand zone, then one would need to switch to the side of the bears.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

Eye-opening trading lessons: http://www.harriman-house.com/experttraders


Friday, December 13, 2013

Kenneth Fisher: Born to Be an Exceptional Expert Trader


 LEARN FROM GENERALS OF THE MARKETS - PART 42 

“Learn from failures, try again differently, fail, and try again. Your odds keep improving the more you try.” - Kenneth L. Fisher:

Kenneth L. Fisher was born in November 29, 1950, in San Francisco, California, USA. He’s the 3rd and youngest son of Philip A. Fisher, an astute investor who’s also featured as a general of the markets in one of the past articles in this series. He grew up in California and attended Humboldt State University where he got an economics degree. He then worked with his father before he started his own investment company (Fisher Investments) in 1979. In the year 2007, he went into partnership with Thomas GrĂ¼ner. He’s been rewarded for maintaining independent thoughts in a world where people tend to harbor herd mentality. He’s also won other notable awards.

Being an astute markets predictor, Kenneth has beaten the popular US markets for many years. He’s authored several books. They are: ‘Super Stocks,’ ‘the Wall Street Waltz,’ ‘Minds that Made the Market,’ ‘the Only Three Questions That Count,’ ‘the Ten Roads to Riches,’ ‘How to Smell a Rat,’ ‘Debunkery,’ and ‘the Markets Never Forget.’ Some of the books are bestsellers. For many years, he’s written numerous articles for top local and international financial magazines. With other concerned individuals, he’s made extensive research in several areas of financial industry. In the year 2011, he was among the 400 richest Americans (he was worth 1.7 billion dollars then). He’s currently worth 1.9 billion dollars. His company manages more than 41 billion dollars for tens of thousands of customers (being the largest wealth manager in the States). He’s been noted as one of the most influential people in the world of trading.  

The story about Kenneth can’t be complete without mentioning his love and sacrifice for ecology and forestry. He’s spent great deals of time, energy, and resources towards the cause (his passion). He’s married with 3 kids. His official website is: Ken-fisher-investments.com/.

Lessons
There are good lessons that can be learned from Kenneth. The best thing is to read his books and some of his innumerable articles. Some lessons are below:

  1. Like father, like son. Philip Fisher was a successful trade, and so is Kenneth Fisher, his son. The son is even far richer than his dad, who taught him the art of trading initially. Would you now teach your teens the art of trading? Certain successful traders today were taught the art of trading by their dads or uncles. Are you a successful trader? Then why can’t you show your kids the way? Or do you want them to start begging for jobs when they finish their university studies?

  1. Trading would forever remain probabilistic in nature. It’s never a game of certainties. Those who look for certainties are searching for what doesn’t exist. Stop looking for certainties and start looking for how to control your risk.

  1. Kenneth said speculation is two-thirds avoiding mistakes, one-third doing something right. Apply your trades flawlessly and stick to your rules. You’re right only by trading according to your plans, not by being accurate in your forecasts.

  1. According to Kenneth, professionals are terrible at forecasting bear markets. The media’s worse. So why do you still think there are some who often predict the markets accurately?

  1. Some would’ve to learn their lessons the hard way, not wanting to learn from others’ mistakes, except their own. Those who find it difficult to accept simple truths about trading would learn their lessons the hard way.

  1. When the masses think a market is a great ‘buy,’ then it’s time to sell it. When the public has too much confidence in a particular trading instrument, it’s time to quit.

  1. The best market to trade is the one the public has lost confidence in. When most people think a trading instrument is hopeless, then it’s high time you were invested in it.

  1. Kenneth once said that the developments in the markets tend to go contrary to the masses’ expectation. Even if they’re correct, it may be owing to a different cause than they think. It might even be accidental.

  1. No matter how smart you’re. No matter how intelligent or experienced you’re. No matter to kind of strategy or a combination of strategies you use, you can’t be right every time. However, you can enjoy overall success in the markets, just as Kenneth has done.

  1. The market is a good indicator of what’s happening in an economy – whether the economy is good or bad.

Conclusion: Winston Churchill has been quoted as saying that it’s easier to forecast what happened yesterday. Whatever happened in the past is historical in nature, and not an indicator of tomorrow’s results. Prices aren’t invariably error free and are discounted, and so far they’re being determined by people. It doesn’t matter the type of program and/or software used by them; the reality remains the same. Bear this in mind.

This piece is ended with a quote by Kenneth:

“Investors get overwhelmed by greed or fear but also forget that being greedy or fearful didn’t work out for them in the past. But they also forget they were wrongly greedy or fearful because feelings now seem so much stronger (even though they’re probably not).”

 
Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Wednesday, December 11, 2013

Sirius Petroleum Turbulent - Downswings to be Dominant


Sirius Petroleum stock (LSE: SRSP) has been a turbulent market that is difficult to handle. This is a market where tight stops get hit easily. It is not an overstatement to say that the market is currently in upswings and downswings, while downswings are dominant. As a result of this, the tongue-tied bulls do not know what to do next. However, by looking closer at the price, we may see where it is likely headed.



The price has broken the lower Trendline to the downside and has closed below it, as the RSI period 14 goes into the oversold area. This shows the bears are really dominant. There is a supply level at 4.50 (which is a hurdle to buyers’ interest), and the price could break the demand level at 3.50 to the downside.

Conclusion: The bears are more favored than the bulls in this market. Professional bulls know what to do in this kind of market so that they would not be affected that much. Only novices do not know what to do. We would continue trading no matter what. Some may quit, drawdowns may happen, spikes may occur, uncertainties may be rife, and profits may be difficult to make, but we can trade with peace of mind. The secret to your victory is in you.

This forecast is ended with the quote below:

 “I believe that when traders do their chart work every night, and perform price action analysis accurately, they will begin to make the right trade decisions on a regular basis. Whenever I have failed to follow a regular routine of chart observation and study, my trading results have suffered.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders




“Golden Cross” Possible on Strategic Natural Resources? The Shares Are Upbeat


Strategic Natural Resources shares (LSE:SNRP) remain upbeat as they struggle to shrug off the influence of the recent bearish trend on them. Should the price go above the market level of 10.00, and then above the EMA 200, it would be the start of a long bullish journey. 



There are 4 EMAs on the chart – EMAs 10, 20, 50 and 200. The expected Golden Cross on the chart would be a new era for buyers, if it could happen. For this to be valid, the price ought to stay above the distribution territory of 15.00 within this month or next month. When this happens, there would be a confirmation of the bullish signal in the market. Buyers may continue to bull northward.

Conclusion: It would be ok to buy long here and ride the stock for as long as this new bias lasts. Unfortunately, some do not possess the fortitude to do this. Trading is war and the market is the battlefield. No wonder some called their trading stations ‘war rooms.’ They say that if you do not know who you are, the stock market is an expensive place to find out.”

This forecast is ended with the quote below:

“Those who can’t keep things simple typically pay those who can in the financial world.” – Sam Seiden

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders


Sunday, December 8, 2013

Daily Trading Forecasts for December 9, 2013


Last week, the directional forecasts on the EURUSD and the USDCHF were correct. For example, the USDCHF trended downwards by over 140 pips, closing at 0.8917. 

EURUSD: The EURUSD, which has been bullish for more than 2 weeks, has been able to maintain its bullish stance in spite of the initial upswings and downswings within the limitation of some overall stabilization. Last week was ended with some smooth and predictable journey upwards. This week would not be different. 



USDCHF:  Last week, the directional forecasts on the EURUSD and the USDCHF were correct. For example, the USDCHF trended downwards by over 140 pips, closing at 0.8917. This week, the price would easily challenge the support level of 0.8900, and possibly breach it to the downside.

GBPUSD:  There are bullish reversals on the JPY pairs, and directional movements on most major pairs, including exotic crosses. However, the Cable seems unaffected by this, as it continues to consolidate to the downside. There are mixed signals on the chart – with neither the bulls nor the bears winning. It is better to stay out of the market until it becomes predictable again.

USDJPY: This pair dropped below the demand level of 102.00 last week, but it could not stay below that level. Therefore, the price bounced seriously upwards from that level by over 100 pips. Right now, the bullish scenario in the market has been re-confirmed again. The price would test the supply level of 103.50 this week.

EURJPY: Here too, this cross would have broken the price zone of 141.00 to the upside by the time this forecast is published. The ultimate target for this week is the supply zone of 142.00. The bias has always remained bullish.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

Eye-opening trading lessons: http://www.harriman-house.com/experttraders



Friday, December 6, 2013

Why Small Position Sizes Are Ideal


Why do I recommend small lot sizes?



There are happy traders who say these things:

“The markets aren’t hunting for me. I’m part of a large trading community. I know that losses are normal part of doing any business. My winnings are on the way.”

“I know that the volatility in the markets is normal. It’s what has brought me gains.”

“Trading has become my calling! I trade with peace of mind because my losses are small and easily recoverable.”

I’m totally satisfied with whatever the markets give me – whether more or less. I just need to focus on risk control. Profits will take care of themselves.

Sadly, there are also suicide traders who say these:

“That’s me, always perspiring profusely in this severe winter, and that’s whenever there’s a small movement against me.”

“Why does the market always move against me? Who’s my enemy out there? Contend, O Lord, with those who contend with me; fight against those who fight against me.”

“The fluctuations of the markets are fluctuating my heart!”

“Can you see? Another loss. That’s enough. I can’t continue like this. I can’t take it anymore.”

If I use 0.01 lots per trade on a small account and make 500 pips in one month, my profits would be about $50 (whereas it would be $500 if I use 0.1 lots). Someone who uses 1.0 lot per trade would’ve made approximately $5000 from a gain of 500 pips. 10.0 lots would’ve then brought approximately $50,000 as a profit. I’m not saying that I can’t use big lot sizes, but it’ll be on sizable accounts, not relatively smaller accounts. Recently, someone in Russia made 3500% profit in less than one week! Isn’t that attractive? Isn’t it a most welcome opportunity if you can increase your account 35 times in a week? We can see that higher risk enables us to make more money, but the demerit is that it can also bring huge losses when a trading strategy enters a protracted losing streak. Only small sizes can make one survive that kind of protracted losing streak.

For many years, I’ve always advocated the use of very small lot sizes when trading.  This is mandatory for keeping one’s portfolios safe permanently. Nevertheless, I’ve been derided for using minuscule sizes. Those who recommend big lot sizes won’t ever tell you how many accounts they’ve blown. They may have more experience than me and have better strategies than I’ve. Yet, when it comes to risk management, I believe I’ve improved a lot. There were great traders in the past who’re no longer trading. Why? They often betted too big in the markets that couldn’t be predicted with absolute assurance. If you can’t sleep because of open trades, if you can’t leave your PC screen or you’re crying or extremely anxious, then what you’ve risked is too high.

When negativity is considered against positivity, it’s common for people to double or treble their risk after taking a loss, so as to recover quickly. Many traders feel that the bigger their position sizes, the bigger their profits. This mindset is wrong. The factors that can help grow your portfolios over time are conservative risk control, discipline and small lot sizes. Certain people feel that smaller position sizes are tantamount to smaller stakes, which reduce their income. Do you also want to use the RSI to build your new estate? There’s an illusion of having huge gains when fat lot sizes are opened, though the real uncertainty comes from the inability to ride your positions for as long as possible, even with clear negativity. In addition, we go against the norm when we think the only way to control risk is to cut our profits quickly. Still, an effective speculative strategy can receive a margin call if position sizes are too large.

Stop losses also must be physical and rigid. We surmise that there are new trading setups which come up every day – always. There are always new opportunities in the markets. As it always will be with small sizes, trades that hit stops would merely bring small and therefore, bearable losses; and this is the usual way to push a portfolio from the recent drawdown to the eventual increase. It’s the anticipated increase that overrides the recent drawdown.  My personal positions sizing ideas aren’t the most commonly accepted, yet I’ve always remained triumphant, no matter what the market does. The ideas that make you triumphant irrespective of what the markets do are great ideas.

We’re no robots which got no emotions, yet we tend to master irrational emotions as we gain more experience in the markets. When you risk too much, you’ll attach excessive importance to every open position no matter what – so you need to change this attitude. The art of speculation should be approached with some form of rationality; it’s not your whole world, for there are other things in life those matters a lot, so every open position is not your life. When you keep your lot sizes very small, and they don’t eat your account with small unfavorable fluctuations, you’re fine. When those lot sizes are very small and perpetual and loss trades don’t make you cry, that’s when you’ll be able to control your emotions. Approach everything with rationality, treat each trade with a degree of sanity, and cut how much you risk drastically if you’re going gaga. Once again, cut how much you risk drastically and be responsible for that. Put a limit on how much you risk per trade, put  limit on how much your risk per day or per week or per month. When you do this, then you know your maximum loss in a given period, and you’ll be satisfied with whatever the markets do to you. Yes, you’ll be OK.

Great traders know that those who often bet big are suicide traders. This article is concluded with the insightful quote below:

“Do not risk more than 0.5 to one per cent of your capital per trade at the beginning. Less is often more. If you are used to the strategy and you have traded it over a longer
period of time you can vary the risk and maybe even increase it. But you have to take the drawdowns of the strategy into account which increase with the higher risk. Be aware of your total risk: It is the sum of the open risk of all active positions. Your total risk
should not be greater than 2.5 to five per cent – then your capital will not decrease too much if you have several losing trades.” – Julian Komar (Source: www.tradersonline-mag.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Thursday, December 5, 2013

In honor of one of the greatest icons in world’s history – Mandiba


MANDIBA

Separeteness. Racism. Nationalism. Imprisonment.
Indebtedness. Nihilism. Despotism. Disillusionment.

Apartheid is a noble ideology.

Voices. Oppression. Recalcitrance. Sentences.
Noises. Suppression. Penance. Armistices.

Apartheid is not a noble ideology.

Whiteness! Whiteness!
There is one question that comes to mind;
Does the white skin make one a god
Who is immune to human imperfections?
Excruciating history of injustice in favor of chauvinism.

The food of thousands of years can still be hot.
Does the white skin make one a god?
Ha ha ha, in the White history brutality is not.
Does the white skin make one a god?

The time Mandela… Mandiba
Got banished to a trying world of the den,
He was called an enemy of the nation he loved
He could have been sentenced to death
With weapons of oppression and blindness

And despite the bitter taste of suppression
Mandela… Mandiba while in the den
Was not solitary; his vision was with him
And destiny; and destiny could not be destroyed then
He only went to change his appearance.

Ho… Mandela… Mandiba… your term
was not a curse that wasted your youthful strength
your moral power, strength of character
waxed stronger and stronger with the time;
the most famous of your type your term
made you.

Ho… Mandela… Mandiba…truth
at work, the sun shining, the heavens pouring
out of hearts; they thought it was over, they thought they
broke you, their intent constituted in their
book. The pen and the sword at loggerheads, truth
making itself evident; and their passion in
power, and their theory in practice, and its
implementation was a mess, and the truth must not be
proclaimed? So be it…

Ha… Mandela…
Ha… Mandiba…
Truth tried and thrown into a trodden tray
The terrible trial of the terrific truth not astray

A true symbol of the oppressed
Who fundamental rights it is said they do not posses
And those asking for it get suppressed.
Those nailing justice fail when assessed,
By Nature’s cries they are not impressed
Hearts bleed for them, some profess.
Hearts going to the helpless must confess…
Cruel systems of ruling cannot endure…
Ho, it is well…Mandela
Ho, it is well…Mandiba

(Ben Alani, 2009)


Eye-opening trading lessons: http://www.harriman-house.com/experttraders

Tuesday, December 3, 2013

Things to Remain Downbeat on Touchstone


Touchstone shares (LSE:TGL) have been falling and things would remain downbeat. The price has been trending downwards for most past of this year, losing thousands of points along the way. The price would have a leg down, show some stabilization, and then show another leg down. Any reversal formations on the charts have been transitory in nature – traps to the unwary bulls. 


On the chart above, the ADX period 14 is almost above the level 60 (showing a very strong trend), while the DM- is far above the DM+, which means the bears have upper hands. In addition, the MACD (default parameters) have both its signal lines and histogram below the zero line. This is a clean Bearish Confirmation Pattern on the chart. Sell to 0.1!

Conclusion: Touchstone has not shown any sign of a truly bullish market and therefore, things are supposed to remain downbeat. Should one buy by mistake here, one would need to smooth the orders quickly. Victorious market players know how to admit it whenever they are proven wrong in the market.  Those who refuse to do this would end up having average losers that are much bigger than average winners.

This forecast is ended with the quote below:

“Many traders want to start their trading career by achieving big profits with a small trading account… In trading they have to deal with the real risk of losing money.” – Jens Klatt

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lesson from Expert Traders


Doriemus Races Towards the Supply Level at 0.3000


Following long period of trendless phases, there has been a dynamic rise on Doriemus stock (LSE: DOR). Since October 2013, the price has risen significantly; as it makes attempt to recover some recent losses. This is a surprise to the battered bears who are too ashamed to see that the price is going determinedly against them. Even if the fox is having an eye problem, must the news be broken by the chicken?

The price – though highly volatile – is trading above the EMA 21, while the Williams’ % Range is already in the overbought territory. This shows the strength of the bulls: the price may race towards the resistance level of 0.4000 within the next several months.  

Conclusion: Doriemus can continue racing upwards – challenging the supply level at 0.3000, and possibly breaking it upwards, while racing towards the supply level of 1.4000. The best way to make money here is to go long and ride it as the price races further north. Positive expectancy trading methodologies are great for making sure than one has gains in the long run. Of course, there would be challenges along the way. As one rides one’s gains in this market, one would do well to remember to apply risk control measures. Experience reveals that those who risk less tend to a make more money than those who risk more.

This forecast is ended with the quote below:

 “The difference between an average trader and a professional trader is the execution of trades as soon as you see a first-class-chance – independent of the last trade.” – Valetin Rossiwall

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: http://www.harriman-house.com/experttraders


Sunday, December 1, 2013

Daily Trading Forecasts for December 2, 2013


Most JPY pairs seem overbought and it looks like there could be some reversals soon. Yes, there could be reversals this week, but the markets may still go further upwards, especially if there are certain bulls who are interested in going long at the current prices.  


EURUSD: This is a bull market – slow and steady in nature. The tardy movement brought the price to the resistance line of 1.3600, before the price closed at 1.3590 on Friday. The current reversal in the market is weak and it is not supposed to take the price below the support line of 1.3500, before the market resumes its upwards journey from there.

USDCHF: This is a bear market – slow and steady in nature. The tardy movement brought the price to the support line of 0.9050, before the price closed at 0.9075 on Friday. The current reversal in the market is weak and it is not supposed to take the price above the support line of 0.9100, before the market resumes its downwards journey from there.

GBPUSD: The Cable should continue going upwards this week, reaching the distribution territory of 1.6400. There is a Bullish Confirmation Pattern on the chart which supports this outlook.

USDJPY: Most JPY pairs seem overbought and it looks like there could be some reversals soon. Yes, there could be reversals this week, but the markets may still go further upwards, especially if there are certain bulls who are interested in going long at the current prices. Thus, in spite of the possible reversal along the way, the USDJPY may reach the supply level of 103.00 this week.

EURJPY: This market has been trending upwards by more than 750 pips (since the bullish signal was generated earlier this week). There were reversals along the way, and the probable reversals that are coming should not be a surprise. It is possible for the price to test the supply zone of 140.00 soon, and possibly breach it to the upside.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

Eye-opening trading lessons: Lessons from Expert Traders



Monday, November 25, 2013

Monthly Forecast on Gulf Keystone (December 2013)


It is expected that Gulf Keystone (LSE:GKP) would experience further consolidation and subsequent downtrend in the month of December 2013. Any rally here – as it is currently happening – would be short-term in nature as well as giving the bears a wonderful opportunity to sell short at better prices. 


You can see that the price, which has been trending vividly lower since September 2013, has just broken out of the Trendlines (the lower Trendline, to be precise). The price closed below the lower Trendline. Therefore, any rally would be a false signal. The RSI period 14 is below the level 50. In the month of December, the price could reach the accumulation territory of 140.00; whereas the distribution territories of 180.00 and 200.00 would serve as hurdles to any bullish attempts.  

Conclusion: Gulf Keystone is a bear market and it would continue to be such.
At this time, the bull may be threatening, but it really is a toothless dog… it merely resembles a tiger; it cannot hunt down even a rodent. Anyhow, our gains come from other traders’ blunders. “Lessons learned from a loss are the price of knowledge gained,” declares Joe Ross. Please, we need to learn from the past negativity.

This forecast is ended with the quote below:

“The point is this: one trade won’t make your career, but one trade could break your career. (Or at least blow up this trading account…)”  - Rick Wright

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders






Further Crash is Coming on Publishing Technology



Publishing Technology shares (LSE:PTO) have been trending lower significantly in recent times, and it is expected to crash further. The price hit a strong supply zone in October 2013, following a gap-down in the market. Since then, it has been trending downwards.


Here, 4 EMAs are used. They are EMAs 10, 20, 50 and 200. The color that stands for each EMA is shown on the top left corner of the chart. You can see that the price has breached the EMAs 10, 20 and 50 to the downside, as it targets the EMA 200 which is the last hope for the adamant buyers. The EMA 200 may succeed in halting the progress of the bear, but the probability of it being challenged and breached to the downside is very high. Should the expected Death Cross materialize, it would be a new lease of ‘crashing era.’ The long term target for the sellers is at the demand zone of 200.00. The signal here is ‘sell,’ not ‘buy and sell.’ There is no room for hedging – otherwise one will lose both. He who runs after two mice will end up catching none.

Conclusion: As regards the Publishing Technology, the dominant trend is bearish, although there may be noisy rallies on smaller timeframes, which would often be inaccurate. Rookies may prefer to use smaller timeframes, but professionals prefer using bigger timeframes. That is why most of them tend to do swing or position trading, because day trading can really be full of stress.

“You will not really have failed until you finally give up – a decision that you do not need to make.” – Marko Graenitz


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders


Sunday, November 24, 2013

Daily Trading Forecasts for November 25, 2013


The conditions on the market are favorable to trend-followers, especially in the face of new signals and directional movements that are currently happening. For instance, the USDCHF has assumed a strong southward bias and the price could reach the support level of 0.9000 this week. 

EURUSD: The EURUSD has assumed a strong northward bias and the price could reach the resistance line of 1.3700 this week. This is possible because the EMA 11 has crossed the EMA 56 to the upside while the Williams’ % Range gallivants in the overbought territory, showing the strength of the bulls.


USDCHF: The conditions on the market are favorable to trend-followers, especially in the face of new signals and directional movements that are currently happening. For instance, the USDCHF has assumed a strong southward bias and the price could reach the support level of 0.9000 this week

GBPUSD: On this pair, we have a Bullish Confirmation Pattern. The market moved upward by over 110 pips last week, closing at 1.6224. There is still much room for the price to go north, only that there could be some pullbacks along the way, which ought not to take the price below the accumulation territory of 1.6100 in worst cases.

USDJPY: Here too, the market is bullish. Yes, this is a bull market and the price would eventually test the supply level of 102.00, even possibly overcoming it. The great psychological demand level of 100.00 would act as a long-term barrier to the bears’ effort, for the price may not break that area to the downside in spite of the corrections that may happen in the course of this bullish journey.

EURJPY:  This cross trended significantly upwards last week, moving upwards by more than 200 pips before closing at 137.29 on Friday. Since the bullish signal was generated a few weeks ago, the market has moved upwards by more than 610 pips. A great ride indeed!

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

Eye-opening trading lessons: http://www.harriman-house.com/experttraders

Friday, November 22, 2013

Steven Cohen: An Enigmatic Market Speculator


LEARN FROM GENERALS OF THE MARKETS - PART 41

“What you do not believe, you can never become.”

Born in June 11, 1956, Steven A. Cohen is an American funds manager. He grew up in New York, where his parents worked. He began to play poker while still in high school – something that could’ve groomed him to develop a liking for the vagaries of the markets. When in school, he opened a brokerage account with some of his tuition fee. He got a degree in economics in 1978. After that, he was hired at Gruntal & Co. in 1978 (a Wall Street firm). On his first day as a trader, he made a profit of eight thousand dollars.  Later, he was making at least one hundred thousand dollars per day. In 1984, he was managing his own trading group at Gruntal. He founded his own firm, SAC Capital Advisors, in 1992 (with about twenty million dollars of his own money).

Steven has been so successful in his career. In the year 2005, he was paid one billion dollars as salary. In 2011, he was paid a salary of six hundred million dollars. As of March 2013, he was termed as the one hundred and sixth richest individual on earth (number thirty five in the States), being worth far above nine billion dollars. A Wall Street Journal article called him a hedge fund king. Time Magazine and Bloomberg Markets Magazine once ranked him among one of the most influential people. He’s been married twice with 7 children. Unlike some billionaire funds managers who donated huge amounts of money to charities, Steven (an avid lover of arts) has spent huge amounts of money on arts. Since the year 2000, he’s been collecting art works and has spent hundreds of millions of dollars on that. He’s constantly ranked among the top ten biggest-spending art collectors. That’s how he preferred to spend his money.

Lessons
There are helpful things to learn from Steven:

  1. There are some who can talk lots about trading and also trade successfully, while some can talk a lot about trading, but can’t trade successfully. Steven rarely grants interview, for he’s a timorous soul. There are many timorous souls out there who don’t talk, write or grant interview about trading; yet they constantly make killings in the markets.

  1. It’s been observed that at the beginning of one’s trading career, one tends to favor short-term trades. However, as one gains more experience, one tends to hold one’s trades longer than when one first started. This is exactly what happened to Steven, who didn’t hold open trades for long periods of time. Later, he began to trade for the longer term.

  1. Teach your kids the art of trading (as one of my past articles explains). When kids start having market-like experience while still a teenager, they usually grow up to become highly profitable traders. As far as the markets are concerned, there may be a seed of greatness in you and your kids. Those who start trading when they’re still young would have the chances of becoming market wizards more easily than those who start when they’re older. Steven began to experience the unpredictability of the markets while in high school. You can see what he later became.

  1. It’s very important to stick to the industrial standards, rules and regulations in the course of one’s career. No-one says you mustn’t make money, as long as you’re doing that legitimately.  No doubt, Steven is a great trader, but sadly, he’s been indicted in a large criminal insider trading scandal. It’s believed that insider trading gives those who do it an unfair advantage over others. He was charged with failure to prevent insider trading in his company. Five of SAC Capital Advisors former employees were implicated and they admitted their guilt. More employees have also been charged. This is a serious allegation. Now U.S. securities regulators are trying to bar Steven from managing other people’s money. In fact, there have been many former funds managers who’ve been jailed, fined and disgraced because of insider trading. Steven’s glorious and enviable career is mired in scandal. That should be a lesson to us.

Conclusion: Funds managers like Steven are worth our admiration because it’s daunting to manage other peoples’ money. It’s far easier to manage one’s own money. So it pays to get a trading methodology that fits your mindset and beliefs, for what fits you may not fit another person. When you use a methodology that agrees with your mindset, trading becomes much easier and enjoyable. Just make sure you’ve tested the methodology to make sure you like it. Tweak it and apply the rules as they fit you. Then make sure that the rules give you an edge. There’s no end to acquisition of knowledge and maturity in the trading world.

This piece is ended with a quote from Jesse Felder, who’s also a money manager. He mentions the challenge of managing other people’s money.

“When trading your own account you can only harm yourself. When trading other people’s money you have their financial future in your hands. My clients typically have most of their net worth invested with me and that’s a major responsibility. I take very seriously.” (Source: www.tradersonline-mag.com)

Eye-opening trading lessons: Lessons from Expert Traders




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