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Friday, May 31, 2013

Jim Rogers: The Nostradamus of the Markets

LEARN FROM GENERALS OF THE MARKETS - PART 29

“Experience taught me that experts are wrong most of the time. The reason for my success in the financial markets is the fact that I see the world from another point of view.” – Jim Rogers

James B. Rogers was born in October 19, 1942 (Baltimore, Maryland, USA, though he was raised in Demopolis, Alabama). He first experienced business at a tender age of 5 when he sold peanuts and empty bottles left by some sports fans. When he graduated in History from Yale University in 1964, he worked at Dominick & Dominick – a Wall Street firm. Then, he got his 2nd BA degree in Philosophy, Politics and Economics from Balliol College, Oxford University in the year 1966. He worked alongside George Soros, starting from 1970, at an investment bank called Arnhold and S. Bleichroder. Together with George, he founded the Quantum Fund, whose portfolio was increased 42 times in 10 years. This means they outperformed the S&P by more than 893 times. That Fund was really marvelous. He’s currently the head of Rogers Holdings and Beeland Interests, Inc. and the creator of RICI (the Rogers International Commodities Index). That Index keeps tabs on the indices as one way to speculate in the index. Jim has always espoused trading agricultural products.

In 1980 Jim quit working at Quantum Fund and started a world tour on a bike. After this, he engaged in some interesting activities, but soon, he started his journey through China, including the world (1990 - 1992). This feat was a record one hundred and sixty thousand kilometers spanning six continents. As a result of this, he made the Guinness Book of World Records. Yet, from January 1, 1999, to January 5, 2002, he made another Guinness World Record by hiking through one hundred and sixteen lands, in a custom-made Mercedes. He started in Iceland and ended up returning to New York on January 5, 2002. More details about this may be found on Jimrogers.com. He’s written a number of best-selling books including ‘Investment Biker,’ ‘Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market,’ ‘Adventure Capitalist,’ and ‘A Gift To My Children’ (the latest one).

Lessons
What can we learn from Jim?

  1. I call Jim Rogers the Nostradamus of the markets because of his trading approaches and style. He does what many traders wouldn’t want to do, and he achieves extraordinary results and records that many can’t achieve. When it comes to his perception of the markets, his views could be strange to many, but they’re true. For example, unlike what most peculators in the world thinks, Jim says the commodity market is the best market in the world. Do you believe this? How about other financial markets? The best answers are found in his book: Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market.

  1. What is the best city to live in the world? OK, to be precise, where is the best part of the world in which one can live as an investor? Jim is no longer living in the US, for he’d sold his mansion in New York and relocated to Singapore. He’d have settled in China or Hong Kong if it wasn’t for the perceived high level of pollution in those lands. According to him, the UK was the best place to invest in the early 19th century, and the USA was the best place to invest in the early 20th century. Now there are economic power shifts, so the best place to invest in the early 21st century is Asia. Even certain small lands like Cambodia and Sri Lanka are fertile markets for investors (although he was pessimistic about the future of Indian economy, for he believes that India might not survive another 30 or 40 years). This means that, the UK and the US are no longer the ideal places to invest.  Apart from Jim, many assiduous investors and market analysts have often mentioned this fact.


  1. Jim declares that Russia and the Commonwealth of Independent States (CIS region) have what it takes to be the leader in agricultural products. He said people should put less attention on stocks and focus on commodities and agriculture.  He pointed out that rather than looking forward to Wall Street or the City professions, it pays to learn commodities, agriculture and mining. He was reputed as saying this: “The power is shifting again from the financial centers to the producers of real goods. The place to be is in commodities, raw materials, natural resources” In May 2012 he remarked during an interview with Forbes Magazine: ‘There’s going to be a huge shift in American society, American culture, in the places where one is going to get rich. The stock brokers are going to be driving taxis. The smart ones will learn to drive tractors so they can work for the smart farmers. The farmers are going to be driving Lamborghinis. I’m telling you. You should start Forbes Farming.”

  1. For those who idolize the English language, well this mayn’t be the unwelcome fact. English language mayn’t be the most important language in the world in the foreseeable future. The Chinese Mandarin is the language with the most speakers in the world (even the Chinese population is far higher than all the population of the 54 counties in Africa). The fact that I can speak English doesn’t make me the greatest man in the world, nor does the fact that you can’t speak English make you the most unfortunate man in the world. Perhaps some people (including me) idolized English language because of the reasons that are beyond the scope of this article. Don’t those who speak 2 or more languages have advantages over those who can only speak one language? Well, Jim’s first daughter is being taught Mandarin so as to get her prepared for the future.  Why? Jim revealed that the Chinese are highly enthusiastic, inspired and industrious; and that’s the kind of environment in which one should be.  That was how the USA and Europe used to be. Think of heavy machinery, electronics, goods and many more that are coming from Asia. More than half of all the robots in the world are in Asia. I was even amazed to learn that most of these robots help build ships and many other industrial goods with unbelievable speed. Are you prepared for the future? Do you prepare your children for the future?

  1. With all these, Jim has always been, and remains, a successful trader. He knows where the best markets are and how to take advantage of them. This has really added to his expertise and profile. Are you ready to take the challenge and trade your way to financial freedom? 


Conclusion: Speculation has to do with taking advantage of opportunities that most others fail to see; and this is usually done before others see the opportunities. Unless in some obvious cases, the most common means to harness gains in the markets is when the price moves downwards after a short position is opened, or when the price moves upwards after a long position is opened.

This piece is concluded with more quotes from Jim:

  1. “Do not buy the hype from Wall St. and the press that stocks always go up. There are long periods when stocks do nothing and other investments are better.”

  1. “Those who cannot adjust to change will be swept aside by it. Those who recognize change and react accordingly will benefit.”

For more articles, go to: http://www.paxforex.com/forex-blog
 

Wednesday, May 29, 2013

Short Randgold Resources!



Randgold Resources (LSE:RRS) has been in a clear downtrend. From the year 2012; and so far in this year, this statement has been true. Any rallies have proven to be short-term in nature, giving nice opportunities to go short at dearer prices. 

It can be seen that the EMA 21 has long been sloping downwards on the chart – for a long period of time. As said above, it has always been great to sell rallies in this market, and this time is very much adept for that kind of strategy. In this month of May, 2013, the Williams’ % Range has been going downwards from its monthly overbought region. The price is below the EMA 21 (closing below it), plus the Williams’ % Range would still go below the level 50 and go towards the oversold region. The next nearest target is the demand level at 4500. However, it is possible that the price would cross that level to the downside, going further downwards. This is the matter of the bulls’ loyalists and the bears’ insurgents. The bulls have been suffering in the market, and the bears have been gaining upper hand. There is currently no end in sight to this outlook. 

This article is ended with the quote below:

“Find a mentor. As much as I love trading, I could have saved myself years of misdirection had I sought and found a successful mentor. I took timeless
lessons about human behaviour and eventually made them my own, but to have a teacher/coach helping set the path would have been a gift.” - Derek Hernquist (Source: www.tradersonline-mag.com)



Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders



Leyshon Resources Is Going North!

In spite of the recent downtrend and the current turbulent volatility in the market, Leyshon Resources (LSE:LRL) is going north. The price had already been making some northward attempt in this month, before it gapped upward earlier this week. Whether the gap is filled or not, there is a northward determination in the market.

Here, the ADX line is above the level 40, giving an indication of strong northward bias. Since the bulls hold sway right now, it could logically be concluded that the buying pressure is very strong right now. The DM+ would inevitably go above the DM-.  The MACD (default parameters) histogram is above the zero line, plus its signals lines are going above the same zero line. There is a Bullish Confirmation Pattern on the chart, although it does not mean that there cannot be occasional southward retracements in the market. You can put out fire, but can you put out the smoke? The near-term price target is the distribution territory at 22.00. The price would ultimately go above that distribution territory and go further north. 

This article is ended with the quote below:


“Trading is a great thing, and I don’t just mean that financially. Trading is my life. Of course, it helps a lot to be successful as a trader and to not have to worry about money. In that respect, trading is no different from other professions.” – Larry Williams (Source: www.tradersonline-mag.com)


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

 

Sunday, May 26, 2013

Weekly Trading Forecasts (May 27 - 31, 2013)

The currency markets are experiencing sharp reversals in the face of major biases, which could be pullbacks or potentially new signals. If you look at your charts more carefully during a busy trading period, you would observe that instruments do not move in straight lines. This is a propensity in the markets; a major bias is punctuated with major or minor retracements, continuations and mean reversion movements.  

EURUSD
Primary trend: Bullish
This recently bearish instrument has turned bullish – with the possibility of a bullish continuation. It could be safely said that there is a new ‘buy’ signal in the market. Both lagging and leading indicators have confirmed this. So it is expected that the nearest resistance lines would be breached to the upside as the bullish bias continues. The support line at 1.2900 should check any intermediate bearish threats.

USDCHF
Primary trend: Bullish
The USDCHF should normally go in a contrary direction to the EURUSD, but the bullish bias on the chart is still valid. However, the present bearish correction is so determined and serious to the extent of posing a great threat to the extant major northward outlook. The oscillators have already given the indication of a trend reversal, but the lagging indicators are yet to follow suit. Therefore, it would be OK for to wait for further confirmation before taking any position.

GBPUSD
Primary trend: Bearish
This is a bear market and it could remain so for the next several trading days. The Cable has been plunging slowly and steadily. The issue is that, it would first go upwards on a short-term basis (giving a good chance to sell short), and that is what is happening right now. The price may not be able to reach the distribution territory 1.5200 before going downwards. Eventually the price may reach the accumulation territory at 1.5000, which is not a lofty target.

USDJPY
Primary trend: Bearish
Having given up about 2 weeks’ gain, this pair has been going downwards in some determined manner. After testing the supply level of 103.50, the price has dropped by approximately 200 pips before stabilizing. Since that bearish pullback was extremely serious, it has led to a new ‘sell’ signal on the chart. Right now, there is a Bearish Confirmation Pattern on the chart; which gives a good opportunity for short sellers.

EURJPY
Primary trend: Bullish
The condition on this cross has remained wonderful for the most part of this month. For example, the bullish bias has been maintained in spite of the recent sideways moves and consolidations to the downside. Even the last significant pullback in the market has failed to lead to a clear bearish signal.  Oscillators and lagging indicators are yet to generate a bearish signal, and for now, it may sound sagacious to stay out of the market until there is a clear indication.  

This article is concluded with the quote below:

“Trading is ONLY about making money. If you can’t do it on a regular basis
you are not a trader. Everything else is just conversation.” – Brian Lund


For more articles, go to: http://www.paxforex.com/forex-blog



Friday, May 24, 2013

Can Stunning Accuracy Help Your Trading?

Do you know how top traders handle their positions? Schools encourage us to multi-task flawlessly. The more errors a student makes, the worse the marks awarded and therefore less the commendation, for many errors. Mistakes are frowned on in the medical world, business world and the engineering world. Indeed, the willingness to be perfect in all fields of human endeavors is acknowledged – an inborn tendency.

The tendency to be perfect has made neophytes believe that good traders should never lose; or should rather have 85% - 95% probability. They think they need to win always in order to make gains.  After a losing streak, some swear never to trade again. The fact is that people will do things that increase their enjoyment and refrain from what tends to aggravate their pains. People try to escape negativity by failing to trade new signals, since – psychologically – it’s thought that more loss is avoided if new signals are not traded. You would need to do away with bad thinking that has adverse effect on your trading. When you have a negative trade, try to find out why and how you could improve your trading. Do not dwell on your past bad experience since this does not help you. You would need to focus on more opportunities ahead of you, and not weighed down by the forgone events.

Those who wish for perfection while speculating would be quick to truncate their winners because they don’t want them to revert to negative territory. As a result of this, a trading system that has more than 70% should be evaluated in the context of the mean equity curve and drawdowns. Someone with 95% accuracy can receive a margin call on his account, if his position sizes are too big, and no stops are used, or the stops are too wide and take profit zones are too tight. Someone with less than 33% accuracy can become a permanent victor in the markets, if his position sizes are very small, and he uses stops, and rides his winners or he sets tighter stops and wider take profit zones. You can win 3 trades, lose 7 trades, lose another 7 trades and win additional 3 trades and still be a winner. Conversely, you can win 8 trades, lose 2 trades, win another 8 trades and lose additional 2 trades and eventually receive a margin call. It all boils down to money management, golden rules of trading and risk control. Therefore, in spite of being inborn, perfectionism doesn’t work in trading.

With much experience as a trader and trading systems developer shows that over a very long period of time, one would hardly be right far more than half of the time (if many signals are generated on monthly or yearly basis), even if it appears that one achieves 100% accuracy under certain market conditions. Very soon, a winning technique would undergo some losing streaks, whether on a monthly basis, or quarterly basis or yearly basis. There aren’t many speculators who can boast of more than 65% probability in many years. These traders are geniuses and would often apply common sense with any trading methodologies they use. There’s not much psychological benefit from a winning trade that’s realized when we violate our rules. That winning trade is only realized out of luck. We should accept that fact that we’re the ones that opened a losing trade as well as a winning one. This is a fact. 

Are market wizards (generals of the markets) achieving 90% - 100 % probabilities consistently? If we analyze their trading performances since the beginning of their various careers, we’d see that this is far from being true. Think of Dr. Brett N. Steenbarger, Dr. Alexander Elder, Philip Fisher, David Harding, Adrian Manz, John Templeton, Michael Covel, Tim Knight, etc., these are successful names in the trading world. Yet, they got no 100% accuracy. With being right less than half of the time, they still achieve decent percentage returns. They simply make more money than they lose. You see, the market presents equal opportunities to everybody on earth. Everybody competes in the market, but only the skillful and the disciplined come out home and dry.  How many percentage returns do you think Warren Buffet make on annual basis? Did you think he doubles his accounts every year? Even there are years in which Warren doesn’t even make a profit. There are also traders who perform better than him, only that they have smaller portfolios.

How could you end up winning with lower hit rate? That’ll be explained in another article. Wasn’t it 40% accuracy that gave me nearly 12000 pips (49%) in the year 2011? Wasn’t it only 35% accuracy that gave me 4500 pips (21%) in the year 2012? Isn’t less than 40% accuracy that has given me over 2200 pips (10.2%) so far in this year? Even with this, I usually have more than a few months of losses in a year. Sometimes, I even lose more than 10 or 5 trades in a row, and yet I don’t go down more than 5% or 8%. This is possible because of my very small lot sizes and risk control techniques. I got to cut my losers, or else I’m in trouble. I just make the losses to be so small, so that whenever the market conditions become ok for me, I shoot ahead. For example, if I win 10 or 15 trades in a row, I gain about 10% or 16% or even more.

Conclusion: It’s common that certain traders don’t consider exotic pair and crosses when they trade, because they’re not as popular as majors and because their spreads aren’t tight as those of majors. Should you trade on an instrument with a higher spread when the spread on the GBPUSD is much lower? Why would you trade the GBPCFH when the EURUSD is readily available? Some think that low spreads matter and that high spreads could magnify losses and reduce gains. This is true. But there are many wonderful opportunities on those exotic crosses as well, especially if you’re using a trend-following strategy. If the GBPNZD moves by more than 500 pips in one week, would it matter much if the spread on it is 20 pips?

This article is concluded with a quote from George Soros:

“I’m right in arguably no more than half of all cases, but I just make a lot of money whenever I’m right, and lose as little money as possible when I’m wrong.”


For more articles, go to: http://www.paxforex.com/forex-blog

Tuesday, May 21, 2013

The Price on China Food May Plunge Lower

China Food shares (LSE:CFC) recently made a false bullish breakout before they were pushed lower. This means that not every trading signal should be taken. Are all snakes edible? Now, this is the technical reason for the next possible direction.

In a context of a downtrend, the price has largely moved sideways this month. Recently it attempted to break above the upper Trendline (which proved to be a false breakout). The price may retry its attempt and close above the upper Trendline, which would lead to the bullish signal verification. Otherwise, it would break the lower Trendline and close below it, leading to the bearish continuation. The RSI period 14 is below the level 50 which means that the bearish continuation is much more likely. You cannot fathom the intensity of the candlestick that appears next - it may even be as big as an arm’s length.
There are no methodologies that bring perfect results always; neither do they give you 100% profitability. Good speculators control the uncertainty and control their open trades.

This article is ended with the quote below:

“One thing is for certain: You will be wrong – a whole lot. Learn to accept it. As long as you cut your losses quick and maintain good risk/reward ratios on your setups you will make money over time.” – Brian Lund (Source: www.tradersonline-mag.com)


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders

 

Could San Leon Sustain This Growth?

Could San Leon (LSE:SLE) sustain the bullish momentum it has started since April 2013? From the yearly low reached in April, the price has moved upwards significantly, favoring those who saw this early enough. But once again, could this be sustained?

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. Since April, the price has been going north, and the EMAs 10, 20 and 50 have given a ‘buy’ signal, though the EMA 200 is yet to follow suit. The price is very close to the EMA 200 and the price action may result in a Golden Cross (when it crosses the EMA 200 upwards). Then the northward bias would be vivid. Should the Golden cross attempt fail, the price could nosedive.

On San Leon, remember to trade what you see and control your risk. People tend to respect their rules after they’ve broken them and suffered the consequences. Going against safety rules in trading brings huge roll-down, but for those who adjust positively, recovery would be made eventually. This mindset would enable us to ignore noisy fundamentals and pay attention to what the price is doing.  

This article is ended with the quote below:

“Risk per trade allows me to accept the loss before I even begin to execute the trade. This gives me the ability to focus on what‘s happening in the market.” - Anthony Crudele (Source:www.tradersonline-mag.com)


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders
 

Monday, May 20, 2013

Submit Your Ideas and Inspirations: Get Rewarded

The New Author’s Dilemma
Nowadays, most publishers would reject your manuscripts, no matter how good they may be. It’s not uncommon to hear words like ‘We’re sorry, but your works don’t fit with our publication plans’ or ‘We don’t accept unsolicited submissions’ or ‘We accept book proposals only through agents’ or ‘ You’ll need to fund your own book and its publication’ etc. Most publishers would ignore your proposals and never answer you. The list of discouraging words is endless.

The reality, however, is that, the celebrity or established author that most publishers prefer was once a Mr. or Mrs. Nobody. If he/she wasn’t given any chance whatsoever, he/she wouldn’t have become famous as it’s today. A potential but unknown author might even have an idea which is far better than that of an established author. But who would give them the chance? For those who prefer submissions through agents, isn’t it also a great idea if certain would-be authors could be dealt with directly? Sad enough, there are certain potential authors who can’t afford to fund the publication of their books.

Make Extra Income as an Author
The fact that agents and publishers have constantly rejected your manuscripts doesn’t mean that your works can’t be successful if given a chance. At Literactworld.com we believe that every author should be given an equal opportunity - as long as the work submitted piques our interest, and is judged to have a great possibility. We love to help potential authors realize their dreams. Our aim is to make money for our authors through good marketing strategies and effective collaboration. We love to work with our authors to achieve common aims and ambitions. As a specialist in eBooks, we request that you submit your books/manuscripts for a possible publication consideration. 

Long ago, many people wrote many books that were unpublished and those books have been eaten by termites or got destroyed by other adverse factors. What you wrote and kept under your pillow would do you and the world no good. There are many talented writers who’re suffering from poverty, whereas they could be earning some decent royalties. Just make sure that you put out your best in writing; it’s like giving the world your best and expecting the best from them in return.  Make a name for yourself on this planet. Don’t let your thoughts, ideas and inspirations die with you. The Providence sends those hunches to your mind so that your dreams can be realized. Many people have died with their dreams, but yours won’t be so.

Spread the Word
Do you have a sibling or a child or a friend or a parent or anybody who’s a great and talented writer? Please tell them to submit their manuscripts to us.  If you can’t do it, they may be able to do it very well. We’re interested in their ideas and thoughts. Spread the word: at your place of worship, your club; to your relatives; your co-workers and so on, would be delighted to hear this. If you’re not cut out to be an author, someone close to you might have the talent of putting thoughts and emotions in writing. Please tell them and they’d be forever grateful to you. There’s no big deal in this, for there are many engineers, doctors, lawyers, teachers, sportsmen, politicians etc. who earn extra income from writing books on part-time basis.

You can submit as many manuscripts as possible, directly to us. In order to know our submissions guidelines and the types of books we want, please go to: http://literactworld.com/author-submissions

For more information about us, you may go to: www.literactworld.com



Weekly Trading Forecasts (May 20 - 24, 2013)

The currency markets are in vivid Trend Confirmation Patterns – both bearish and bullish. Recently, prices have become very volatile as they approach major accumulation and distribution territories. But it is expected that those territories would be breached as the markets go in the direction of the overall biases. Thus, market participants are bound to make more gains as they take more risk in the favor of the current biases. We’re naturally inclined to welcome gains and abhor losses, yet losses must be anticipated before gains can come. The less the magnitude of the stake, the less the expected returns and vice versa.

EURUSD
Primary trend: Bearish
The EURUSD is bearish and it is expected to continue being so, even irrespective of the current volatility and turbulence in the markets. There is a Bearish Confirmation Pattern on the chart (as supported by the indicators). Any short-term rallies ought not to take the price above the resistance line of 1.3000, for the current outlook not to be in jeopardy. Meanwhile, the price could reach the support line of 1.2700 within the next several trading days.

USDCHF
Primary trend: Bullish
Some resistance levels are acting as a barrier to the bulls’ interest, but those levels would soon be breached to the upside. The bullish scenario continues to be valid, as the indicators as well support it. The ultimate target on this pair is 0.9800, in spite of the hurdles to be overcome. Foreseen bearish attempts would not take the price below the 0.9500, otherwise, there would be a serious threat to the bullish outlook. 

GBPUSD
Primary trend: Bearish
The bears are still present here. They are not only present, but they hold sway and in the face of this, any short-term rallies would end up being fake-outs. Normally the short-term rallies are not supposed to push the price upwards beyond the distribution territory at 1.5400. There is a need for the price to go below the market territory at 1.5200, for the bears’ interest to continue. There must be perpetual price position below the aforementioned market territory.

USDJPY
Primary trend: Bullish
Northward is the outlook on this popular major, though the price has not moved determinedly upwards in recent times. In spite of the recent volatility in the market, accompanied by a sideway move. One may think the market is indecisive, but one needs to be reminded that that was the condition on the market before the price zones at 100.00 and 102.00 were breached to the upside. The supply zone at 104.00 may soon suffer the same fate.

EURJPY
Primary trend: Bullish
This instrument has not made any significant bearish or bullish move within previous trading days, but the major outlook is bullish and it is expected to be so. In spite of stealth attacks from the bears, the bulls’ have succeeded in preventing the price to be dragged determinedly downwards. Now, it could be safely said that the demand level at 131.50 has been an effective check on the recent bearish attempts. The supply zone at 133.00 is the ultimate target.

This article is concluded with the quote below:

“Many active traders make the mistake of assuming that a winning system for swing trading… needs to be complicated. On the contrary, the best trading strategies are typically the most simple because they can be more easily and consistently followed.” – Deron Wagner


For more articles, go to: http://www.paxforex.com/forex-blog

Friday, May 17, 2013

Linda Raschke: An Amazon of the Wall Street

LEARN FROM GENERALS OF THE MARKETS - PART 28

Linda Bradford Raschke (Commodity Trading Advisor) is the head of LBR Group Inc., and LBR Asset Management. This astute female trader has over 30 years of trading experience. A real amazon of the Wall Street as she’s, her career began in 1981 as a market maker in options. She first started at the Pacific Coast Stock Exchange, and later joined the Philadelphia Stock Exchange.  She uses multiple-timeframe analyses when trading, as well as speculating on several markets with several trading methodologies.  Apart from being featured in ‘The New Market Wizards’ (by Jack Schwager), she co-authored a best-seller titled: ‘Street Smarts—High Probability Short Term Trading Strategies’ (released in 1995); and the CNBC Financial reporter Sue Herera's Women of the Street, mentioned her as an exemplary trader. Linda has been featured in many financial programs and media. She’s also been useful for many acclaimed trading organizations, companies and conferences.  During her over 3 decades of experience, she’s taught in more than 22 lands. For more information about Linda, please go to www.lbrgroup.com.

Lessons
During her lectures and presentations, Linda has passed across many lessons that are surely of help to traders. Some of them are below:

  1. Linda isn’t tempted to betray her time-tested trading style, no matter what the markets are doing. You simply need to learn how the markets behave and how they work so that you can achieve excellent trading mastery. Market patterns repeat themselves, and once you’ve mastered these, you can develop trading strategies which would no longer require major amendment. If you’ve a consistently profitable trading strategy (an edge), then stick to it. Be faithful to your trading method, even when there’s a period of roll-downs in the markets. Why? Trading strategies that work don’t change with market types or changing market conditions, nor are they market-specific. Market behavior tends to repeat itself and a winning streak is in the offing. 

  1. You’ve got to love stops like your Mom. Setting protective stops when trading should be as automatic as breathing to you.  The stop is an effective protection for your nerves and your accounts, no matter what others say against it. Stops will one day save you from the markets that refuse to come back – in contrast to your usual expectation. Never trade without them. It’s a foolish act to allow a trade that could be closed with a negligible loss snowball into a huge negativity. 

  1. Linda uses different strategies to tackle the markets. There’s no strategy that’ll work in all market types. A trend-following system will fail in a continuously ranging market.  A scalping strategy would go kaput in a strongly trending market, especially when caught in a wrong direction. A buy-and –hold strategy would be deadly in bear markets. The key to scaling through all these is to know the type of the market you’re trading and the type of the strategy you can use for it, or you can use a strategy that works in most (but not all) market conditions. When you’re frustrated with a trading methodology, that’s when the markets are about to become favorable to it.  

  1. If you can trade with an edge, correct trading mindset and effective risk control tools, then consistent and permanent success is possible in the markets. Linda’s LBR Group has been a registered CTA since 1992, and has remained active till today. Moreover, her fund performances have been constantly ranked among the top 20 out of 4500 for best 5 year performances by BarclaysHedge. If Linda can do this, other women ought to do it, provided they’re ready to accept the truth about trading and move ahead. If a woman can achieve this, what are you man waiting for? Linda is a true amazon of the markets, just like Hetty Green and Louise Bedford.

  1. The most important achievement you make as a trader is not to lose your account, not making profits. If you can be a breakeven trader, using that as your prime target, then it means you can recover any loss you’ll inevitably sustain in your trading career. If you can keep your account safe, then you’ll eventually make money in the markets. If you lose your account through excessively big position sizes, what would you use to harvest gains in the markets when they start smiling at you?  The best traders aren’t those who make money during easy market conditions and then lose the money when the market conditions become challenging. The best traders are those who can survive all uncertainties and adverse conditions in the markets, and then make money when the markets begin to pour out their riches for lovers of trading. The most important skill is not the ability to predict the market accurately, but the ability to survive losing streaks and keep your account intact; that’s risk control.

Conclusion: Don’t force yourself to do what’s contrary to the realities on the markets. Trade what you see, not what you want. As a trader, you’ve got to be objective and unbiased, rather than subjective and biased. Show respect for the markets. 

This article is concluded with a quote from Linda Raschke:

“Successful traders who have demonstrated longevity in this business have one thing in common: a consistent methodology with a demonstrable edge. You cannot trade profitably over the long run without an edge.”


For more articles, go to: http://www.paxforex.com/forex-blog
 

Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders

Wednesday, May 15, 2013

Lessons From Expert Traders

The tactics, behaviour and mindset that can be learned from the world's most successful financial traders

I’ve got to stick to your own rules, even if they make me look stupid sometimes. That’s the fact for survival. Irrespective of some negativity that may come my way in a month or, even on a quarterly basis, I know I’d be triumphant in the end. Any temporary negativity I may be experiencing right now has little or no effect on this fact. My expertise is measured by my faithfulness to my trading ideas. That’s the most important factor. If I follow my rules, then I’m making progress, but if I breach my rules, I need to go for psychological help. This has nothing to do with whether there is an ongoing positivity or negativity. 

The game of speculation usually entails emotional hurdles to overcome. Going against the herd mentality can’t be over-emphasized. Speculating triumphantly needs self-awareness and the knowledge of how the markets work and positive expectancy systems. There is negativity now and then in trading; yet positive expectancy systems have enabled expert traders to enjoy everlasting success in the markets, whereas majority of traders cannot achieve this.

Following on from a popular blog on ADVFN.com, in Lessons From Expert Traders Azeez Mustapha brings you concise and digestible lessons from 20 of the world's most successful traders.

By learning what these super traders did well, what techniques and attitudes drove them towards success, and the mistakes that they have made, you can take a step forward in your own trading.

For each personality profiled here, the author includes a short biography, the primary lessons that can be learnt from this trader's career, and words of wisdom from the traders themselves.

Traders featured include: Alexander Elder, Benjamin Graham, Anton Kreil, Jesse Livermore, Adrian Manz and Lex van Dam, etc.

Approach your trading by first discovering how the most successful people in the field have operated - you are sure to pick up some invaluable lessons to improve your method.

Here are the ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders

There is an Ominous Trap on GCM Resources!

There is a decoy on GCM Resources (LSE:GCM). In fact, this is an ominous trap for unwary traders who make decisions based on emotions. The dominant bias on the chart is southwards, and there is no end in sight right now. It is presumed that speculators are aware of the fact that a bias alternatively has significant movement zones and transient counter-trend zones.

2 Exponential Moving Averages – EMAs 10 and 20 are used for this analysis. Yes, the market has been trending downwards for the past several months. Right now, there is a significant Bullish Engulfing Pattern candlestick (something that might be a spike or a great opportunity for bears to go short at a higher price). For those who think this is a ‘buy’ opportunity, this may well be a death trap. For the bears, it portends a low risk and a high probability chance.

Can anything go wrong here? Yes. Should the EMA 10 cross the EMA 20 to the upside and should the price close above them and continue to move upwards, then the bears could smooth their positions. No negative or positive trading periods  - only periods when the markets go in your favor or go against you as that is true of any strategy. Truncating profits before they go too far and taking losses only when they seem to go out of control is a recipe for pecuniary disaster.

This article is ended with the quote below:

“Change comes from facing fears, doing something differently, and getting outside of your comfort zone. But, you can’t do differently without thinking differently.  Becoming self-aware is crucial to your development as a trader.” – Dr. Woody Johnson

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders

Sunday, May 12, 2013

Weekly Trading Forecasts (May 13 - 17, 2013)

Interesting things are happening in the markets, especially on JPY pairs. The northward outlook on these pairs has held out longer than what most thought. The USDJPY pair has broken the great supply zone of 100.00 to the upside (the last time the price was above that market zone was April 2009). The real surmise shows that a northward journey would continue to run as long as some think it would end. When most traders think the bias would continue indefinitely, then there would be a reversal. A southwards journey would likewise continue for as long as people hope it would end. Then when people think it would not end soonest, that is when a new bullish phase would begin.

EURUSD
Primary trend: Bearish
From the recent monthly peak of 1.3242, the price has gradually come down to the present location. Although the bulls struggled desperately to push up the price, they were eventually outmaneuvered by the wily bears. For example, the market has lost all its gains in the recent week. There is a new bearish indication on in the market and one would do well to seek short trades only.

USDCHF
Primary trend: Bullish
On the USDCHF, the weak bearish trend has been gotten rid of completely. There is a Bullish Confirmation Pattern on the chart – for the indicators now support a bullish outlook. Despite any possible correction that may take place in the next several days, it is advisable to seek only long trades here. Price correction ought not to go below the support level at 0.9400, while the price could eventually reach the resistance level at 0.9600.   

GBPUSD
Primary trend: Bearish
As far as the reality on the chart is concerned, this pair is now in a bearish mode. Given the new lease of strength in the Greenback, the pair has been weakened. The only thing that can render this outlook invalid is a scenario in which the price fails to go below the accumulation territory of 1.5400. Should that price territory get broken to the downside, the next target would be 1.5300.

USDJPY
Primary trend: Bullish
The northward outlook on this pair has held out longer than what most thought. The USDJPY pair has broken the great supply zone of 100.00 to the upside (the last time the price was above that market zone was April 2009). This means a renewed strength in the pair, and the next targets would be the supply zones of 102.00 and 103.00 respectively. Any bearish correction along the way may not drag the price downwards below the demand zone of 100.00

EURJPY
Primary trend: Bullish
This cross trended very long in a sideways manner. Breaking out of the recent sideways phase, the pair is now caught in a serious buying pressure. Before this happened, there was constant indication that the breakout of the sideways phase would be in favor of the bulls, for the primary bullish trend is still valid. The price is above the demand level at 131.00 and could go on towards the supply level at 131.00.

This article is concluded with the quote below:

“I don’t live and die by every strategy signal that I get.” - Anthony Crudele


For more articles, go to: http://www.paxforex.com/forex-blog

Get ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders

Friday, May 10, 2013

Patience Bears Rewards in Trading


Why aren’t we patient while trading? Why do we prefer instant results always? We’ve become an immediate gratification culture, and we expect profits to come quickly, efficiently in the way we want. When that doesn’t happen, we tend to become increasingly frustrated and irritable - a sign of impatience. One source says that, for one thing, in trading, impatience is linked to frustration, irritation, and even anger. Such emotions can raise our stress level, which in turn can harm our health. Impatient isn’t harmful only in trading, it’s also harmful in other areas of life. Author Marvin Lewis writes: “In an act of impatience, a man in San Francisco, California, tried to beat traffic by swerving around a lane of cars that had come to a stop. However, the lane he pulled into had just been laid with fresh cement, and his Porsche 911 got stuck. The driver paid a high price for his impatient (Our Daily Bread, February 19, 2012). 

Impatience Can Be Harmful
These are some of the adverse effects of impatience in trading.

1.      Dithering: Impatience eventually leads to ironical procrastination in making trading decisions. Could it be that they felt compelled to postpone financially risky and highly competitive tasks of playing the markets, because they don’t have the patience needed to work on themselves until they become an expert?

2.      Bad Trading Decisions: Certain good strategies require patience before you can find the best setups. If one is impatient, one can make hasty trading decisions that violate one’s rules and later regret it. When some orders are also still open, an impatient trader can make some unwise adjustments to the open orders. It’s been found that impatient speculators often make hurried, dismal speculation choices.

3.      Margin Calls: The fate of most people in the financial markets is the consequence of undue patience, coupled with inordinate avarice. Lack of patience in trading has led numerous traders to overleverage their portfolio excessively (instead of using high leverage judiciously) because they want to turn a small portfolio to 5-figure income as soon as possible. Newbies who make huge gains and huge losses are less happy than those who go for small losses, and consequently small profits. The use of small position sizing and safe risk control doesn’t appeal to those who want instant gratification. According to Clem Chambers, you should strive to get rich slowly rather than to get rich quickly. Looking for instant riches tends to satisfy human emotions, but it can lead to quick penury.

4.      Loss of Reputation: No-one wants to be identified with failures. If you can keep your investors’ portfolios safe, even in spite of small profits, you’ll still be popular with them. But if you go after the biggest possible profits within the shortest possible time (this target is attainable, but rarely leads to everlasting success in the markets), and you happen to lose your investors’ portfolios, you’ll lose your popularity. Once one’s popularity is lost, it’s extremely difficult to gain it back. It’s better to be safe than to be sorry. Some gurus were popular yesterday, but because of impatience, they lost their reputation. I’ve always featured profitable generals of the markets, and will still feature many more. However, I’m not interested in market wizards that crashed and got burned. I’m only interested in those that are permanently successful. These successful trades have protracted periods of flat performances, followed by protracted periods of roll-downs, followed by protracted periods of consistent profits. The great thing about all these periods is that these generals of the markets remain patient throughout the successive periods, and they survive the markets in the long run.


Stop Being Impatient!
It does little good to worry over things you can’t control. The more patient you’re in the markets, the more likely you’re to have better results, make better decisions, and progress in your career. Instead of losing patience over circumstances that are beyond your control, try to identify things you can control as a trader, e.g. Have a realistic view of trading. First of all, in reality, things don’t often transpire as we want. Don’t forget that you can’t control everything that happens to you in life. Accept that time moves at the speed of time and not at the speed of your expectations. Accept that the markets cannot be forced to give you profits; you simply need to do the right things as a trader, and profits would take care of themselves. That’s patience. Study the secrets of market wizards and learn how you can trade less anxiously and more patiently. In time, patience can become a quality that comes naturally to you.

Conclusion: Most persons would attain their goals in life if they learn from their initial errors and try never to repeat them again. With step by step assimilation of the realities of their chosen endeavors, they master their various careers. The problem is that, most persons don't apply the principles of success to their speculative activities. They approach trading with levity. They simply dash into trading and see it’s not that easy. They may stay away from trading briefly, only to come back and experience the same results, repeatedly. During this experience, they still fail to use it as leverage to trading mastery. They can use that experience to become astute speculators. Can that be the best thing to do?  We approach university studies and professional courses with utmost seriousness, persevering in spite of obstinate hurdles. We approach highly competitive sports and other forms of commercial activities with staunch determination and unflinching commitment. But we tend to approach trading with levity. Trading is a very serious profession which we should approach with staunch determination and unflinching commitment.

A quote from Richard Russell ends this article:

“And if no outstanding values are available, the wealthy investor waits. He can afford to wait. He has money coming in daily, weekly, monthly. The wealthy investor knows what he is looking for, and he doesn't mind waiting months or even years for his next investment (they call that patience).”


For more articles, go to: http://www.paxforex.com/forex-blog

Get ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders
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