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Tuesday, February 26, 2013

Annual Trading Forecast on Bank of America (2013)


The yearly outlook on the Bank of America (NYSE:BAC) for 2013 looks bleak and thus bearish. There has been a sell signal on the chart below. Normally, most market movement in a downtrend has the common result of forcing bulls to smooth their orders, as exit orders are being triggered.  The bulls who sustain negativity are the ones that will smooth their trades, while bears can stay in the market. When those who sustain negativity and those who make some gains lose interest in the market, the major outlook can change.

Following some bullish trend on the market, the price began to nosedive (especially starting from the last week). The price has now closed below the EMA 21, and ready to trend further downwards, as the Williams’ % Range period 20 has gone into the oversold territory. This is a bear market, and the price would reach the demand level of 10.00. There is nothing special here, since the southward journey is expected to follow the long-term northward bias. This is a normal relationship between buyers and sellers, for they are all speculators. Two members of the same family have met each other; the tiger’s cub has met the cat.

This article is ended with the quote below:

“If you are wrong and price moves against you, for the novice trader there is pain… The pain is not created by, nor is it in, the market. It is only in the head of the trader.” – Dr. Woody Johnson

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach


Affero Mining: The stock is weak


Affero Mining (LSE:AFF) has been in a downtrend and would continue thus. When the price is under serious pressure, you see it start to fluctuate on the chart. The more the pressure is high, the more lasting and more significant the trend would be (as it goes down from an equilibrium zone).

The ADX period 14 moved strongly recently, and has been able to keep above the level 30, despite the present low volatility. The ADX DM- is clearly above its DM+ counterpart. The MACD (default parameters) has its histogram and signal lines below the zero line. There is, therefore, a Bearish Confirmation Pattern on the chart. The price, which was at 77.5 when this article was being prepared, could go down to 75.00. In most cases, reducing market pressure ultimately reduces the price movement – something that could stall the current bias and lead to a sharp reversal in the opposite direction. That is why one would do well to seek only short trades on Affero Mining. If you do not eat lettuce for the sake of salad, then you eat salad for the sake of lettuce. Going long could lead to regret.

This article is ended with the quote below:

“I saw experienced traders crying. Something like that leaves a lasting impression
as a reminder of the risks involved in trading.” – Stephen Temes

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach



Monday, February 25, 2013

Weekly Trading Forecasts (February 25 – March 1, 2013)

EURUSD
Primary trend: Bearish
The EURUSD traded in a significant downwards move recently – a bias that is ever valid. The indicators on the chart now give a vivid support of the bears’ hegemony. The price has already broken the support line at 1.3300 to the downside, and the next target would be the support line at 1.3100. In the near term, however, there could be some bullish retracements which are not expected to take the price higher than the resistance line at 1.3200.

USDCHF
Primary trend: Bullish
This pair was able to completely shrug off the equilibrium forces that were impeding its bullish determination. There has now been a Bullish Confirmation Pattern on the chart, and the ‘buy’ signal is still pretty new. Though, there could be some pullbacks that would try to take the price downwards towards the support level at 0.9300, eventually, the price could reach the resistance level at 0.9400 within the next several trading days.

GBPUSD
Primary trend: Bearish
So far in this year, the Cable has dropped by close to 700 pips (a scenario that remains extant). All trend-following indicators are pointing to a weak market, especially given the bleak economic outlook and fundamental data that are coming from the UK. There has been a temporary ‘upward bounce’ of the price from the accumulation territory of 1.5150. And this proffers an opportunity to buy higher in the context of an ongoing downtrend. The market could reach the accumulation territory at 1.5000 eventually.   

USDJPY
Primary trend: Bearish
There appears to be a new short selling indication on the USDJPY chart, although the long-term outlook is bullish. For the past 3 weeks, this pair has found it difficult to trend significantly higher: it rarely went above the supply of 94.00. With all possibility, the potential is more to the south, because buyers seem to have thinned out. This could be a unique opportunity to enter on the side of the sellers while the price of the USDJPY is still dear. Should this outlook hold on for a few more days, then the bullish trend is over.

EURJPY
Primary trend: Bearish
On this instrument, the price recently dropped by nearly 300 pips! This was a significant downtrend move in the context of abortive bullish attempts. Right now, there is a Bearish Confirmation Pattern on the chart, which means that the trend has completely changed and one would need to seek short trades only. There could be some transient rallies in this market, but they are not supposed to take the price up beyond the supply zone of 124.00. This is a bear market, and the price might eventually reach a target of 121.00. 

Conclusion: The more buying or selling pressure is perceived, the more activities are carried out by bulls and bears. This means that bulls and bears strive to get fair values for their bids and offers. On the other hand, if the price doesn’t stay long at a noteworthy market level and fails to go back to that level in a given time horizon, there mayn’t be much equilibrium phase as far as the market is concerned. This means that the bears think the price has gone too far to the upside and they refuse to transact further, or the bulls think that the price has gone too far to the downside, and thereby refusing to do further transaction. 



Friday, February 22, 2013

Sam Seiden: Flying in the Face of Conventional Trading Wisdom

LEARN FROM GENERALS OF THE MARKETS - PART 22

“I love my career and am always learning more about trading. I felt my
passion for the industry and harnessed it with full commitment.” - Chris Cashman

Sam Seiden, a trading genius, started his trading career on the floor of the Chicago Mercantile Exchange. Since 1991, he’s been involved in various types of financial markets. Currently, he’s the Vice president of Education at Online Trading Academy. Local and international students now tap from his decades of trading experience. He’s a fund manager and a Commodity Trading Advisor (CTA). He’s a speaker to investment bodies, colleges and private trading conferences. He’s authored Market Advisory letters. He also speaks at seminars and contributes to various trading magazines. By visiting Tradingacademy.com, you’d be able to access his articles, courses, presentations, and also benefit from coming ones.

Lessons
Great lessons can be learned from Sam Seiden, and sometimes, some of these lessons fly in the face of conventional trading wisdom.

  1. Honestly speaking, most of the conventional trading ideas are rubbish. Why? This is because most of those who use them end up being unprofitable traders, even after having played the markets with those trading ideas constantly. Trading ideas that work are the ones that allow you to be consistently profitable. Our major aim is to make money constantly and earn a living from trading. Even novice traders make profits here and there, but they cannot retain the profits over a long period of time. How can you retain your profits?

  1. There’s someone on the other side of your trade who’s trading against you. This person isn’t your reliable broker, but your fellow trader. For every person that buys, someone else sells. When you buy EURUSD and it goes up and you’re making money, all those who buy at the same time with you will make money. But those who sell at that time will be losing (reverse the logic for when you sell and the market goes down). That is the reality in trading. Trading is a zero sum game: whatever you gain comes from others who’ve lost their socks in the markets, and vice versa. You don’t need to see the people at the other side of your trade, but you need to be smarter than they are. For you to remain smarter than other traders, you’ll obviously do what’s contrary to what majority of them do (majority are losers). The human mind isn’t wired to trade in an appropriate manner. The common human mindset doesn’t want to trade in logical manners. Fortunately, what can be learned can also be unlearned. Through your determined effort, you can condition your mind to trade properly.

  1. The most crucial factor to consider when trading is the chart (plus the price action). On the chart, you can see where Smart Money is making long and short traders. On the chart, you’ll see what novice traders might be doing. On the chart, you’ll see potential reversal areas in the markets, and capitalize on them with insane accuracy. These areas are called demand and supply levels. A supply level is where the novice would be happy to buy from the smart trader.  This is where many enthusiastic bulls want to go long – to their ruin. The demand level is where the novice trader would be glad to sell to the smart trader. This where many optimistic bears would prefer to go short - to their own detriment. Neophytes buy at retail prices and sell at wholesale prices. One of the smartest things you can do as a speculator is to buy at a wholesale price (demand level) and sell at a retail price (supply level). This logic tallies with how successful retailers in the world make their money. It’s just the same way with trading: only that market speculators do that in their living rooms.

  1. Sam’s experience on the floor of Chicago Mercantile Exchange (CME, where he handled institutional flow orders) has given him a deep insight into the market. The reality of how the market works has to do with the ongoing supply and demand relationship, whether the market is in an equilibrium zone or in a trending mode. Trading opportunities emerge whenever demand and supply are out of balance. Any type of financial markets and indicators will do only if you use them according to how the markets really work. Now, using indicators to analyze this kind of scenario is possible, provided the indicators are used logically (otherwise indicators would be worthless). These indicators can also be used to understand why the markets move and how they do that.

  1. The best thing to do on the market is to buy when prices are on sale in the context of an uptrend. You’d do well to disregard any ‘buy’ signal when oscillators are overbought in a bullish mode. The best thing to do on the market is to sell when prices rally in the context of a downtrend. You’d do yourself a favor by disregarding any ‘sell signal when oscillators are oversold in a downtrend. Summary: Buy low in an uptrend. Sell high in a downtrend. And do it right.

  1. There’s no perfect trading system and there won’t be one. Even, the best trading idea in the world can’t win always. There’s no need for a perfect trading idea, otherwise the person would be the richest person in the world. Using logical speculative principles is the only way to stack the odds of success in your favor. Although, Las Vegas can’t win always, they do well ultimately because they know they can’t always win. They simply follow the plans that make them smarter than others. This is how we get advantages over those who aren’t as smart as us.

           Conclusion: The sloth is remarkable for its stupidity; just as the novice trader is remarkable for making average losers that are much bigger than average winners. For you to make average winners that are much bigger than average losers, you need to learn how to be smarter than those at the other side of your trade. Instead of going for higher education for higher certificates in order to procure higher position and higher salary (though it looks ideal), simply build your trading skills and track records for increasing financial freedom.

This article is concluded with a quote from Sam:

“Trading strategies that work don’t change with time, markets, or changing market conditions.”

Tuesday, February 19, 2013

Annual Trading Forecast on IBM (2013)

Annual Trading Forecast on IBM (2013)

What would be the major bias on IBM (NYSE: IBM) for this year? The answer is given in the analysis below. The market, in recent months, has found it difficult to trend significantly upwards. And right now, it has assumed a bearish bias, following a gap-up that occurred in the month of January 2013.

There is a tendency for the market to trend downwards this year. Monitoring the precise trading recommendation, a conspicuous increase in momentum usually leads to more market pressure as equilibrium phases are rendered ineffectual. On the chart, the 2 Trendlines are sloping downwards in a bearish channel, while the RSI period 14 is clearly below the level 50. Yes, any bullish attempts have already been gotten rid of: the placenta is gotten rid of the day it comes out.  As long as the price is not able to break the upper Trendline to the upside and close above it and then trend further upwards, the current bias would be valid. The price could reach the accumulation level at 190.00 this year.

This article is ended with the quote below:

“…There is no Holy Grail and even the best and most profitable traders experience high and low phases. In difficult periods of time, it is important that the trader has a plan and knows.” – Markus Strauch

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

StratMin Global – Will The Shares Go South?

What would be the eventual fate of the shares on StartMin Global (LSE:STGR)? Would they go south or north? The expected outlook is explained below and would need a thorough plan to be followed. When initial trading plans are followed faithfully, gains normally result.

On the chart above, 4 Exponential Moving Averages are used. They are EMAs 10, 20, 50, and 200 (the color that stands for each EMA is indicated on the top left part of the chart). Until very lately, the price has been in a subtle northward journey, in spite of its turbulent past. Since the last week, the price has been in clean bearish run, especially in the near term. Does this mean the subtle bullish mode is over? Nope. The current scenario is just a unique opportunity to buy lower in a currently subtle bullish mode, especially at the demand level of 50.50 or 51.00. No bear would be able to overpower the bulls in the long term. The policeman that will arrest the devil is yet to be recruited. It is possible that the price reaches the supply level at 70.50 later this year. As long as the price fails to break the EMA 200 to the downside, the signal is ‘buy.’

This article is ended with the quote below:

Making profits can be slow and boring.” – Clem Chambers

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach


Monday, February 18, 2013

Weekly Trading Forecasts (February 18 - 22, 2013)

EURUSD
Primary trend: Bearish
This pair is in a bearish mode, and this is what is expected to continue in the next several trading days. The indicators are showing a Bearish Confirmation Pattern on medium-term charts of the EURUSD. After the support line at 1.3250 has been broken to the downside, the next target would be the supply line at 1.3200. In the short term as well, there could be some rally which would take the price temporarily back to the resistance lines at 1.3400 and 1.3450.


USDCHF
Primary trend: Bullish
The USDCHF pair, while trading in a protracted range (between the resistance level at 0.9200 and the support level at 0.9150), was giving an indication of a northward probability. This was possible because, basically, oscillators gave impression that the bulls are more powerful than the bears. Eventually, the price broke out of the resistance level at 0.9200, to the upside. The signal we have here is ‘buy.’

GBPUSD
Primary trend: Bearish
This is a perpetually weak market – a vivid downtrend. This downward bias is still valid, as the Cable has fallen by several hundreds of pips in this year. There is a Bearish Confirmation Pattern on the Cable, and long trades are not suggested right now. Any expected rally could only take the price back to distribution zone at 1.5600, but the price could reach the accumulation territory at 1.5450.

USDJPY
Primary trend: Bullish
On this market, the major outlook remains towards the north. Recently, the gains that were seen by the market have been forfeited during the current price correction. Oscillators have given some bearish indication (for the present correction carries weight), yet this has not been supported by lagging indicator like the EMA 56. Short trades are not encouraged right now, because further confirmation is needed before an action could be taken. This could be a temporary pullback, and I would be thinking of a long order at the moment.

EURJPY
Primary trend: Bullish
On this cross, the gains that were recently made by buyers have been given up during the extant correction. This correction is quite significant, and should it continue for the next few days, it may render the primary bullish trend useless. For the current northward scenario to be valid, the price ought not to go below the demand zone at 123.00. Should this prove to be true, it would be a great opportunity to buy low in a downtrend; otherwise one would look for short trades. 

Conclusion: Your speculation plans should remain uncomplicated and stuck to. You might want to imitate those who are already successful since there cannot be better trading ideas than the extant ones. It could do, when it comes to attempts to bypass the grim experiences of undisciplined traders. Continue to add to your knowledge. Do not underrate the role of a correct trading mindset, and seriously speaking, think of risk control when trading. Speculation comes with negativity sometimes. Negativity does not mean you are not good.  There is no speculation method that does not entail negativity, and this should not discourage you on our way to financial freedom. Imbibe information from the markets repeatedly.

This article is concluded with the quote below:

“I just warn people not to overwhelm themselves, stick to the basics.” – Chris Cashman

Wednesday, February 13, 2013

The Cost of Discipline – Part 2

“The truly successful traders are incredible discipline fanatics. Presumably, it’s not even enough to be more discipline than the average person. You just need to be in the top 10% group. Self-discipline causes the trader to place certain obligations on himself.” – Christian Lukas


Being disciplined enough to do what are rights in the markets doesn’t always make us look smart. The trader who doesn’t use stops may look smart when the price comes back to his entry level, yet he’ll have to blame himself when the price on one pair/cross refuses to come back to its entry level. When do you think the AUDUSD will go back to the psychological level at 0.6000? The trader who uses stops may look stupid as he sustains small roll-downs on his accounts, especially when the price goes back in his direction after getting stopped out. Yet, the stops will, one day save him, his career and his nerves. Someone who uses excessively big position sizes may look cute when he gains huge profits with small price movements (whereas huge losses are possible with small price movements). Whoever uses small position sizes to get small profits would be derided as using minuscule lots, whereas minuscule lots would lead to only negligible drawdowns in bad market conditions. 

A trend follower needs self-control to ride his winners. Planting is similar to long-term career in trading. A planter plants the seeds and employs patience for the ultimate results – harvesting. As the seeds grow, he patiently tends the sprouts. It takes as long as necessary for seeds to grow into trees. A speculator looks for a signal that meets his entry criteria, and then opens a trade accordingly. He manages his trades until an exit criterion is fulfilled.  A sane planter knows it’s unrealistic to look for instant harvest, because certain conditions must be fulfilled before harvest can take place, neither can he force premature harvest. If a speculators misses a signal, he’ll be disciplined enough to wait for a new signal. Trending markets are formidable: one should flow with them, not against them. The financial markets are thus formidable, so we need not resist its flow.

What should we do, then? We just need to be disciplined enough to avoid trading styles that aren’t in our best interests and embrace those that ensure our long-term success. Trading psychologists help in achieving this. Are we disciplined enough to obey simple winning rules? Writer Julie A. Link said: “When I was young, I thought the cost of living in my parents’ home was too high. Looking back, I laugh at how ridiculous it was to complain. My parents never charged me a cent for living at home. The only ‘cost’ was obedience. I simply had to obey rules like clean up myself, be polite, tell the truth... The rules weren’t difficult, but I still had trouble obeying them. My parents didn’t kick me out for my disobedience, however. They just kept reminding me that the rules were to protect me, not to harm me, and sometimes they made the rule stricter to protect me from myself.” Successful trading rules are there to save your accounts and your nerves, and make you realize your goals in the end. These rules would be mentioned in future articles.

We are grateful that a wonderful instrument like Forex is available for us, for it has many blessings inherent in it. It rewards the disciplined. Disciplined traders have maintained crucial priorities in their career, and they’ll stick to other important aspects of trading.  There are winning trading principles that have stood the test of the time, and disciplined traders stick to these principles even though the principles are not perfect. Disciplined traders believe they’ll be great in trading (with realistic expectations). They eventually become market wizards

Commending the Disciplined Trader

Your trading plan is clearly stated,

Offensive and defensive weapons are with you at the war front,

Profits come to you easily,

You are an expert who remains unperturbed

Survival is the real winnings

You react to profit and loss in the same way

No matter what your open orders do

Your experience helps in selecting great signals:

Here is your opportunity!

Please show them you are a victor

For you have always been victorious!

Conclusion: Lack of discipline will cost us something. Can you now see why discipline is crucial to your success? To be aware of this is a great step towards your personal evolution as a successful trader. As it’s often said, “To be conscious that you are ignorant is a great step to knowledge.”

I conclude the article with a quote below:

“Trading is simple, but it isn’t easy. There are many obstacles and challenges. Do you have that attitude of courage, tenacity, perseverance and determination to start each trade afresh, regardless of the outcome of the previous trade?” – Paul Wallace


Monday, February 11, 2013

Centamin: Time to Buy!

Since December 2012, Centamin (LSE:CEY) has been journeying upwards. If one was cautious of the bullish pressure then, the bias has now been confirmed. It is surprising that someone would still call short trades in this type of market. Is it normal to sell after the market has assumed this kind of bias? One’s relatives will understand it is a weakness, but outsiders will take it for mental sickness.

The ADX period 14 has been trying to rise in a strong trending mode, and will eventually rise above the level 30 as the buying pressure mounts. The DM+ is already above the DM-. The MACD signal line and histogram are above the zero line. There is a Bullish Confirmation Pattern on the chart, and the price moves upward in slow and steady manner, dotted with minor pullbacks that resulted in higher highs and higher lows. The price won’t trend simply for trending being mandatory, but for the necessity of doing so. Things would now move on the long side because optimism has now overridden dread.

This article is ended with the quote below:

“I want to be trading with strong trending stocks for the bulk of my trading strategies.” – Chris Cashman

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

 

Blinkx Stock Now at a Significant Demand Level

Blinkx shares (LSE:BLNX) are now at a significant demand level, where the price has gone out balance in favor of buyers. The bull now has the power, for the price is ready to continue its northward move (having broken out of the recent equilibrium zone). The bear dares not challenge the bull at this moment. The dog that challenges the tiger would have its body covered with blood.

In the month of January, the market traded sideways, correcting downwards in the process. From the beginning of February 2013, the price has been rising steadily, gapping up on Monday (February 11, 2013).  The price has crossed the EMA 21 to the upside, and closed above it. The William’s % Range is now in the overbought region (testifying to the bull’s energy).

Conclusion: The job of speculation is taken more seriously than the outcome of it. Even when negativity is sustained after one’s rules are adhered to, that would be normal. That is the situation of things and it remains normal. The outcome produces no adverse reactions. Speculation is carried out with the knowledge that negativity comes with positivity. One needs to be sad only when one hasn’t followed one’s time-tested trading rules.

This article is ended with the quote below:

“Long-term perspective and experience helps. I’ve been doing this long enough that nothing surprises me anymore and more importantly, I still enjoy the challenge and find it fun to trade even when my results are not what I desire. As long as I maintain that perspective, I think I’ll be ok.” – Charles Kirk

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach


Weekly Trading Forecasts (February 11 - 15, 2013)

EURUSD
Primary trend: Bearish
Recently, the EURUSD started to experience a kind of negligible reversal in the market. But this seemingly negligible reversal has turned out to be significant enough to render the major bullish outlook useless. Based on what is happening on the chart, long trades are no more useful on this market: short trades should be sought. There has now been a bearish confirmation signal, which may take the market to the support line at 1.3300.


USDCHF
Primary trend: Bearish
Surprisingly, the major bias on the USDCHF is valid (just like that of its EURUSD counterpart). Normally, the USDCHF ought to go up as the EURUSD went down, but the former has simply range-traded recently. A long trade is imminent, but not yet recommended until further price action confirms that a new northward possibility has come to stay. For this to be true, the price would need to cross the resistance level at 0.9300 and go further upwards. 

GBPUSD
Primary trend: Bearish
Despite some recent bullish attempts on the Cable, the trend remains bearish. Should the EURUSD continue its bearish journey, the pressure might drag the Cable itself downwards. The indicators on the chart still support the southward possibility. However, for an absence of a serious threat to the current outlook, the price should not cross the market territory at 1.5800 to the upside.

USDJPY
Primary trend: Bullish
The bullish bias is still valid here and it is something that should not be underrated. Though, recently, the bullish attempts have been weak (neither has the price been able to assume any noteworthy southward possibility). When breaking the supply level at 94.00 to the upside, the price should head up towards another supply level at 95.00, for the current outlook to be valid. There is a possibility of the price retracing towards the demand level at 93.00, however.

EURJPY
Primary trend: Bullish
It is not an exaggeration to say that the situation on the EURJPY remains tricky – just as it is tricky on all other JPY pairs. The overall trend is still bullish, whereas the current market outlook is not to be neglected. During the recent correction, the cross gave up its weekly gains and dropped by over 100 pips further! The price ought to continue staying above the price market zone 124.00; otherwise it would be a serious threat to the overall bullish trend.

Conclusion: As a result of the foregoing, should you be capable of pinpointing the general outlook for a particular instrument, coupled with the understanding of the big picture, you could eventually have a very high hit rate as you go with the flow of the markets. Should a particular outlook be significant enough to whack those going against it, then the result should be seen as a normal part of this popular business. 

This article is concluded with the quote below:

Trading with the trend offers by far the highest probability of success and it also offers the highest potential rewards.” – Nick McDonald

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach


Yahoo! Messenger ID: saazalmu

NB: Trading has become a calling!

Thursday, February 7, 2013

Julian Robertson: The Father of Hedge Funds

LEARN FROM GENERALS OF THE MARKETS - PART 21

“A Trader’s worth is based on how well he dealt with losing trades.” – Paul Wallace

Born on June 25, 1932, Julian Robertson is thought of as a father of hedge funds. He graduated from the University of North Carolina in 1955, and then served as a US naval officer, a position he held until the year 1957. After this, he worked for a stockbroking firm named Kidder, Peabody &Co. He eventually travelled to New Zealand. Coming back from New Zealand, he started Tiger Fund Management. It was one of the earliest hedge funds. Between 1980 and 1990, he turned four hundred million dollars into twenty-two billion dollars.  But this was followed by serious drawdowns which made investors withdraw their money. Thus the fund was closed in the year 2000. In 1993 he had personal profits of more than three hundred millions dollars. In the year 2003, he was worth more than four hundred million dollars. In the year 2011, he was worth up to 2.3 billion dollars. He went short in some financial markets in the year 2008 and made about 150% on his two hundred-million dollar portfolio.

It’s noteworthy to say that after he closed Tiger Management in the year 2000, he kept on investing by funding and supporting new hedge funds. Now called a erstwhile funds manager (for he’s retired), he still invests in the markets through his former workers who’re now fund managers. These funds managers are doing well. Julian Robertson is highly philanthropic in nature. He founded Robertson Scholars Program, a body which awards full scholarships to many students. He’s also pledged a portion of his assets to charity (following Bill Gates and Warren Buffet’ example). He’s an astute investor and a developer in New Zealand. As a result of this, he was knighted by the Government of New Zealand in December 31, 2009. In May 2010, the New York Stem Cell Foundation (which is a private body) made it public that Julian and his sweetheart (now late) gave them a gift of twenty-seven million dollars. In January 2012, Julian generously donated 1.25 million dollars to fund Mitt Romney presidential race. 

Lessons
What can you learn from Julian Robertson?

  1. As his quote at the end of this article testifies, he made colossal profits from going short on weak instruments and going long on strong instruments. Clearly, this is trend following. So we can say that Julian Robertson is a trend follower. In the year 2008, in which many people lost their sweats and necks, Julian thrived. In what some claimed to be one of the worst financial years, sane traders saw that the markets were trending downwards and went short or smoothed their positions. Insane traders continued to buy in the context of downtrends or refused to close their losing trades. Can you see the difference? Follow the line of the least resistance!

  1. Why did Tiger Management get liquidated in the year 2000? The reason why is because Julian suffered seemingly unbearable roll-downs (which could’ve been seriously mitigated by conservative position sizing and risk control techniques). Sometimes Julian bet too big, as revealed in the following quotes attributed to him: "Hear a [stock] story, analyze and buy aggressively if it feels right (a)." "When Robertson is convinced that he is right," a former Tiger executive notes, "Julian bets the farm (b)." Betting too big isn’t a good thing because it causes big losses when you’re wrong, and this is bound to happen. Betting small leads only to small losses, which are very much bearable and easy to recover when the market conditions become auspicious again. Whether you are a fundamental or technical expert or you combine both, what will save your accounts and your nerves is safe position sizing and risk control. If Julian took this serious, Tiger Management wouldn’t have been closed in 2000. In future articles you’ll learn how risk control can help your survive worse-case scenarios in the markets.

  1. In spite of what happened to him in 2000, Julian didn’t relent. He quit managing money for others, but he didn’t quit trading and investing. This is a great lesson for us. Despite the fact that he’s no longer managing funds actively, Julian still invests with the hedge funds he believes are doing well. Once a soldier; always a soldier. A true general of the market won’t desist from trading altogether, even in retirement. It’s a passion of a lifetime.

  1. Julian Robertson became a champion, and has remained a champion till date. Certain traders became livid because of some huge roll-downs, saying: “That’s enough! I can’t continue like this.” This isn’t the best conclusion. The best conclusion is to learn from the errors you made in the past and learn invaluable lessons from them, and never repeat them. It isn’t easy to be a champion as it requires great efforts, but to sustain being a champion is even more challenging. Being a champion isn’t the end but the beginning of the story. After making several costly sacrifices to become a champion, more daily sacrifices will be required for you to remain a champion. One who’s striking a rock will feel some formidable resistance. If you keep meeting with resistance while doing what you routinely do, find out better, easier and more productive alternatives. On his personal portfolios, Julian is still a champion.

  1. In paragraph 2 of this article, you should have read some humanitarian programs in which Julian Robertson has involved himself. He knows that he can’t carry all his money down to his own grave. I believe you’re on your way to financial freedom thru trading and investing. Otherwise, reading an article like this doesn’t make sense. Once you reach financial freedom, please don’t forget the less privileged, the hopeless and the destitute. Reach out a helping hand to the needy.  Put a smile on someone’s face. Life is short. You aren’t going to live forever, and when you’ve gone, people will remember you for whatever you did while alive.

Conclusion: One of the most challenging things in the art of speculation is using discretionary methodologies – for you make decisions based on certain conditions and experience. Being consistently profitable requires assiduous effort, self-control, sensible trading rules and perseverance. 

The article is ended with a quote from Julian. It gives and insight into his core trading methodology:

“Our mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them. If the 200 best don't do better than the 200 worst, you should probably be in another business."


 

Monday, February 4, 2013

Pound Sterling versus Euro: What is the Major Outlook?


What is the major outlook on the Pound Sterling versus the Euro (FX:GBPEUR)? The major outlook is bearish, and apparently there is no way around this bias, for the bear is in power and the bull is morbidly fearful. The fear of the wolf is what will kill the dog.

The downwards trendlines show a bearish outlook, and the RSI period 14 also shows the same thing. It looks as if the price would reverse, but it would turn out to be a temporary rally. As long as the price cannot break the upper trendline to the upside and close above it (and as long as the RSI remains below the level 50), the bearish outlook will be intact. The price is now at 1.1663 and may go down to 1.1063.  Each speculator on this planet analyses the same market information for each instrument: a fact that enables you to perceive what other speculators are doing so that you can capitalize on their folly. Only short trades are recommended on the GBPEUR pair. Then give your orders enough leeway to move in tandem with the market, making it ride the bearish pressures, while you safeguard your probable gains.

This article is ended with the quote below:

“Always be ready for the unexpected, worst-case scenario.”- Chris Cashman


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach



Empyrean Price Is Out Of Balance!

Empyrean shares (LSE:EME) are not really empyrean right now. They are bound to go southward – something that the misguided bull does not want to hear. It is not an insult to say: “I know how my acquaintance behaves.”

I once said the shares should be dumped! But I think it could be shorted for profits. The price is now out of balance, and there are more sellers than buyers. Neophytes are now willing to buy from smart traders who sell in the context of a downtrend. All the exponential moving averages (periods 10, 20, 50 and 200) on the chart testify to a southward determination. You see, the first thing is to check what the price of an instrument is doing. Should it move upwards, then buy the relevant instrument (and vice versa for a downwards market like Empyrean). The major bias will, in most cases, help your orders. Then when in southward biases, the instruments with the best stamina (with good news around them) may even be subject to bearish corrections.

This article is ended with the quote below:

“…Many traders think that they are the greatest if they happen to have a lucky streak or when there are signs of the first few strings of successes.  But as soon as you think as a trader that you have what it takes, along comes the market and knocks you to the ground.” – Merlin Rothfeld


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

 

Weekly Trading Forecasts (February 4 - 8, 2013)

EURUSD
Primary trend: Bullish
The EURUSD was able to break out of its recalcitrant equilibrium zone and traded upwards. The indicators on the chart are now pointing to upwards an upward determination. Having moved by over 100 pips after coming out of its equilibrium zone, the price might reach the resistance lines at 1.3700 and 1.3750 slowly or steadily. Should there be some bearish retracements, it would be temporary in nature, possibly taking the price back to the support level at 1.3550.

USDCHF
Primary trend: Bearish
Contrary to the strange scenario that occurred last week (in which the USDCHF was positively correlated with the EURUSD), this market has now been trending downwards. In trending modes, the markets have little regards for resistance and support levels. This market is expected to continue to yield to gravity, as most indicators now affirm to selling pressure on the markets. The price could reach the support levels at 0.9000 and 0.8950.

GBPUSD
Primary trend: Bullish
In yet another unusual scenario, the Cable was trading in negative correlation mode to the EURUSD. This was expected not to last long, because whatever happened to the EURUSD would eventually determine the direction of the Cable. Now this bearish plunge has been rejected totally, as indicators have begun to support northward probability. This is the beginning of a new trend, and the market should trend upwards. But please note that a serious bearish correction is possible in the near term.

USDJPY
Primary trend: Bullish
In the month of January 2013, the USDJPY pair trended upwards by more than 430 pips. This bullish outlook continues to hold here (trend-following indicators on the charts continue to testify to the bulls’ strength in the markets). Slowly and steadily, the market would continue to trend upwards. However, it should be noted that this would not come without some bearish pullbacks that would be near reversal-like. It might take the price back to 90.00, but eventually, the price may reach the supply level of 92.00.

EURJPY
Primary trend: Bullish
This is a bullish market, and the outlook for the next 5 trading days ought to continue to be so. This cross has moved upward by close to 1000 pips in the month of January 2013. This was characterized by upswings, followed by noteworthy southward corrections. Astute traders know how to handle this kind of scenario. Despite a possibility of the price reaching the demand zone at 123.50 during some probable corrections, the price should go upwards to the next target at 125.00 and another supply zone at 125.50.

Conclusion: Engulfing pattern candlesticks aren’t a curiosity in trending markets, especially as bullish and bearish pressures intensify. If you see this on 4-hour charts or 5-minutes chart, you’d get an insight into the nature of price actions during strong biases. Even when reversal pattern candlesticks like doji do appear, they do so in the context of the overall market outlook.

This article is concluded with the quote below:

“You will not make money trading unless you follow a predetermined plan and continually stick to that plan. That’s why you should pat yourself on the back every day if you can honestly say that you totally followed your rules throughout the day.” – Van Tharp

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