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Monday, March 31, 2014

Minor Changes to the JPY Pairs Pullbacks Trading Method

“We have discovered that in most cases the systems used by the best are relatively
simple, based on a limited number of recurring setups that allow the trader to go with the flow of the market created by the “big players.” - Dr. Dariusz Swierk

I was thinking of postposing the announcement of the minors change to the JPY Pairs Pullbacks trading method until June 2014. However, I’ve decided that those who’re interested in the strategy ought to be advised of the changes as soon as possible. No matter the strategy one uses, there would be losing periods. The way one deals with those periods is what determines the end game. A useful trading method should be OK when used in most market conditions, but it can’t win always in most market conditions.

1.      The filter in the method is relaxed: The purpose of filters is to block some possible bogus signals, but it may also make the trader miss some winning signals as well. While a filter may result in fewer trader (and more accuracy in certain cases), it doesn’t prevent a strategy from undergoing alternative losing streaks.

2.      Putting stop on ourselves: There are times when everything we touch becomes gold, and there are times when everything we touch becomes something else. There are times when we make money and there are times when we lose it. Nevertheless, recovery is easy when the loss is controlled. The stop on our trade helps, but the stop on ourselves helps better. A winning period may last for weeks or a few months; but so is a losing period. During the losing period, stops would continue to get hit, and roll-downs would keep eating into the portfolio. Therefore, we’ll stop trading in a month in which our loss exceeds 7% of all the total equity, and never open the new sets of trade until the next month. This is like putting a stop on ourselves.

The most effective way to deal with losing periods is to stay out of the markets during those periods. We don’t know when that kind of period may start or end, but we can help in capital preservation (apart from other risk control methods) when we put the stop on ourselves temporarily. We also don’t know when a winning period may start or end.

A combination of two positive expectancy systems may help, but one may frustrate the performance of the other during the intermittent winning and losing periods. A combination of one negative expectancy system and one positive expectancy system can’t also improve the statistics so much – the negativity coming from one may affect the positivity coming from the other. A combination of two worse expectancy systems makes the trade looks pitiful indeed!

All experienced traders acknowledge that every good system has a series of losing streaks and winning streaks. While a losing streak may cause some drawdown, an ensuing winning streak would compensate for that.  We’re fortunate to be able to handle our negativity and positivity satisfactorily. When we limit our negativity by a certain amount, it won’t go beyond that amount.  

A bad market condition tends to result in flat performance or roll-downs for a considerable amount of the time. While that kind of condition lasts, the experienced trader would simply wait patiently, apply risk control methods and look forward to a winning streak, which would inevitably come.

We play the markets to harness gains in the long run, not to make correct predictions.

This article is ended with the quote below:

“I know instinctively that worrying about the money, looking at my trading balance is the worst thing I can do. It is important for a trader to trade the markets, not his or her capital balance. I mean you have to have capital to trade, but a focus on account balance and not the markets is a trap.”  - Peter Brandt


Eye-opening trading lessons: Lessons from Expert Traders




Sunday, March 30, 2014

Daily analysis of major pairs for March 31, 2014

Since last week, the Cable has been bullish, and the target for this week is at the distribution territory at 1.6700.   

EUR/USD:  This remains a bear market in spite of its attempt to rally. The rally is simply a good shorting opportunity; for the price would simply go down to test the support line at 1.3700, which could be breached to the downside as the price trends further lower. Only bearish trades are advised on this market.


USD/CHF: The bullish signal on the USD/CHF is intact. Our target at the resistance level at 0.8900 was nearly hit last week. Right now, there is a minor pullback in the market, but the price would still go upward to test that resistance level. Should the resistance level be breached to the upside, the next target would be the resistance level at 0.8950.

GBP/USD:  Since last week, the Cable has been bullish, and the target for this week is at the distribution territory at 1.6700. With continuation of the bullish pressure, the price could even go beyond our target: it could reach another distribution territory at 1.6750. Only long trades are advised for this week.

USD/JPY:  This market has been bullish and the bullish bias may extend from now on till the latter part of April 2014. This fact does not rule out the possibility of some bearish corrections, but the corrections would be short-lived as the market goes further upwards.

EUR/JPY: This cross first moved lower last week, then the market rallied significant, closing at 141.36. This rally is strong enough to make the cross recover the loss it sustained last week. Any movement above the supply zone at 142.00 means the bullish bias is over.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, March 28, 2014

Weekly Trading Forecasts on Major Pairs (March 31 – April 4, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
This is a bear market: the Euro weakness is clearly noticeable. With the Bearish Confirmation Pattern in the market, it is normally expected that the trend would continue going downwards, breaking the support line at 1.3700, and reaching the ultimate target at 1.3650. The expectation does not rule out the possibilities of normal rallies (which should be short-term in nature). For now, only short trades ought to be sought.

USDCHF
Dominant bias: Bullish
Since the ‘buy’ signal has been formed on the USD/CHF, it has been able to maintain that signal. The recent week has been bullish so far; plus the price could reach the resistance level at 0.8900, and then possibly breaking it to the upside, as the price trends further northwards. The support levels at 0.8850 and 0.8800 should check any transitory southward attempts along the way. As long as the price is above the aforementioned support levels, the bullish bias is valid.

GBPUSD
Dominant bias: Bullish
There has been a clean bullish signal on the Cable, owing to a recent surge of stamina in it. The bullish signal is still relatively new, and each pullback would invariably proffer a new chance to go long. The Cable has the possibility of reaching the distribution territories at 1.6700 and 1.6750. The signal would be deemed as being valid as long as the price stays above the accumulation territory at 1.6600.

USDJPY
Dominant bias: Bearish
Since this market had been trading largely sideways, only scalping or intraday trading methods are recommended for now. There could be a serious breakout at any moment, and there is a possibility that the price would go further downwards when the breakout does occur (as indicated by the current price action). Meanwhile, scalpers and intraday traders may want to go long at the demand level of 102.00 and go short at the supply level of 102.50, either the former or the latter being a stop loss/target area, depending on whether the order is long or short.

EURJPY
Dominant bias: Bearish  
A look at other JPY pairs reveals that some of them are moving upwards. So the inability of this cross to move upwards suggests that the Euro is very week indeed (the same reason why the EUR/USD is weak while the GBP/USD is strong, although they are normally correlated positively). One may, however, want to enter a short trade here, targeting the demand zones at 104.00 and 139.50.

This forecast is concluded with the quote below:
                               

“Some of the greatest and most profitable trading and investing strategies tend to be the most simple you could find. In the world of market speculation, complex very rarely equates to more profitable.” – Sam Evans


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




Thursday, March 27, 2014

When Fundamental Analysis Fails

“Everyone is following the economy, but I’m following the market.” – Joe Granville

There are those who invest successfully using only fundamental figures, and there those who successfully trade using only technical analysis. There are those who combine the two types of analyses and make money.

Nevertheless, I can see that many investors believe so much in fundamental analysis that they refuse to smooth their orders when caught on the wrong side of the market direction, because the fundamentals support the wrong side. I’m not saying that fundamental analysis doesn’t work; it works, but it isn’t a Golden Goose trading method, for there are investors/traders who lose heavily despite the fact that they position their orders according to the fundamentals that are affecting the instruments they’re interested in.

When fundamental analysis fails, what do you do? What you can do to survive and become victorious requires that you look beyond fundamental analysis. Further articles will shed more light on this.

No type of analysis is perfect: therefore it’s risk control that can make one survive the vagaries of the markets. Fundamentals or no fundamentals, you need to know what really works in the market. Joe Granville of blessed memory is quoted as saying that he followed the market when everybody followed the economy. Joe, who focused on the market, was a highly respected and successful trading expert.

One profitable itinerant speculator once declared that the only thing that we need in order to make money in the market is to understand how the market works. That’s a fact.  Most veteran traders acknowledge this fact. The knowledge of how the market works is what would make you a profitable trader.

For example, there are a few stages of investors’ attitudes in a bear market. Investors may be overconfident and greedy, thinking that the price is too cheap and could turn in their favor anytime. At this time, most bears are ecstatic about pushing the price further south, but investors would keep on buying. Then there would be a stage of lack of dread and conservation, which makes investors to become sober and cautious because the market keeps on plunging. The falling price makes some investors angry and shameful. Then there would be another stage of total apathy and frustration when the market has become extremely oversold and it’s really ready to shift gears and start a new long-term bullish bias, that’s when investors would lose confidence in the market and stay out altogether (or leave their positions for the worst that could happen). The timing of the masses would continue to be wrong.

Many traders are making money in the markets in spite economic problems in developed countries. Sometimes, it’s not uncommon to see the market going up when negative data is being released. Sometimes, you’ll see a market plunging despite good figures that are being published. It just depends, if a bad figure that’s just been released is the most encouraging among similar figures released in the past several months or years, it might have a positive impact in the market rather than a negative one.

This article is ended with the quote below:

“Most traders fail because they think they know more than the markets… I say humility because to me every time I caught myself saying ”oh this market has to be a buy because it can’t go any lower” really is a statement of ego, which is another way of pretending you know more than the market.” – John Person



 Eye-opening trading lessons: Lessons from Expert Traders

Wednesday, March 26, 2014

Nokia Shares to Dive Again

Nokia shares (NYSE:NOK) have been bearish: they are expected to dive further southward as confirmed by the technical analysis signal below. Occasional rallies have been followed by further southward moves. The market tempts the bull to think that the bearish era is over, only to correct lower. It is like giving food to charity and adding some laxative to it.

The price is currently below the EMA 21, preparing to trend more southward. The Williams’ % Range period 20 is already in the oversold region, showing the weakness of the stock. While there may be some northward pulls, the shares would dive again.

Conclusion: The price on Nokia may test the demand zones at 7.0 and 6.5 respectively. Avarice and dread showcase the carefulness and euphoria on the trading instrument. That is exactly what is happening in this market.

This forecast is ended with the quote below:

“Of the new people who start trading today so many have no clue of the learning curve. I mean this is a steep mountain. You’ve got to be willing to really, really go through
a lot of learning – and you learn by mistakes. You learn by getting sliced up by the markets. You don’t come in, have a hot three months, and say, “Man, I’ve got it figured out.” You learn when you realise, “Oh, I’ve been wrong eight trades in a row, and now I’m getting another signal.” - Peter Brandt (Source: www.tradersonline-mag.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders





Monthly Forecast on Gulf Keystone (April 2014)

Gulf Keystone (LSE:GKP) is now a bear market. The stock has been bearish since the beginning of this year.

The ADX period 14 is above the level 50, showing a strong trend in the market. In addition, the DM+ is vividly above the DM-, meaning that the sellers have the upper hands. The MACD (default parameters) has both its signal lines and histogram above the zero line. This shows a Bearish Confirmation Pattern in the chart. So the price may go further downwards in the month of April 2014. The price reached the support level at 104.00, but it could even go towards another support level at 90.00

Conclusion: There is a probability that GKP may continue going further lower, although the probability exists that the market may recover a bit before the end of this year. A bias may hold out longer than the buyers could ever imagine… Those who shorted this stock since January 2014 would have earned decent returns indeed.  

This forecast is ended with the quote below:

“There is very little material printed or online for the beginning trader on the subject of drawdowns. This is very unfortunate, because drawdowns are a harsh reality of trading. As a result, beginning traders have false expectations of the trading environment. Drawdowns are a fact of trading, and how a trader deals with drawdowns will determine the end game.” - Peter Brandt (Source: www.tradersonline-mag.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders


Monday, March 24, 2014

Monthly Technical Reviews on Gold and Silver (April 2014)

Here is the current outlook on Gold and Silver.

GOLD (XAUUSD)
Dominant Bias: Bearish
Gold is now a bear market. It started trending downwards last week. The precious metal topped at the resistance level of 1392.00, and since then, the price has dropped by a significant amount of points. There is now a Bearish Confirmation Pattern in the chart, plus the price may go further downwards in April 2014. It now looks like the market is a kind of oversold, but there is still much room for the bearish trend to run. There are resistance levels at 133.00 and 1350.00 which should serve as barriers to the bulls’ machinations. Meanwhile, the price may reach our target at 1200.00. It may even go below it, reaching the support level at 1100.00.  

SILVER (XAGUSD)
Dominant Bias: Bearish
Like Gold, the Silver is also having a confirmed bearish bias which started early last week. The southward bias is so strong – the market has plunged by over 1600 points in less than two weeks. The selling pressure is so strong and there could only be transitory rallies in the market – which should proffer short-selling opportunities for interested sellers. Anyone who goes long in the current market can be sliced up, for the trend has the chance of continuation rather than reversal.



Eye-opening trading lessons: Lessons from Expert Traders

Sunday, March 23, 2014

Daily analysis of major pairs for March 24, 2014

The USD/JPY went bullish last week, closing at 102.25. For the bullish outlook not to become invalid this week, the price must stay above the demand level at 102.00. 

EUR/USD: This is a bear market. The price fell last week, touching the support line at 1.3750; and from that point, the price bounced upwards by 50 pips, testing the resistance line at 1.3800. It is assumed that the bearish trend would continue, which could take the price below the aforementioned support line.


USD/CHF: This currency trading instrument went bullish last week, testing the resistance level at 0.8850, before getting corrected a little bit lower. The correction would be short-term in nature and it is not expected to go below the support level at 0.8800. The stance for this week is thus bullish.

GBP/USD:  The price action on the Cable has resulted in a Bearish Confirmation Pattern and the market is expected to go further south this week. At the present, the market is trading below the distribution territory at 1.6500. While that distribution territory may be challenged seriously by the bulls, the price could end up far below it by the end of this week.

USD/JPY:  The USD/JPY went bullish last week, closing at 102.25. For the bullish outlook not to become invalid this week, the price must stay above the demand level at 102.00. As long as the price stays above that demand level, long trades are sensible. But when the price crosses and closes below the demand level at 102.00, it would then be sensible to seek short trades. 

EUR/JPY: This bias here is bearish. The price closed at 141.07 on Friday (March 21, 2014). The southward move is not yet significant, but it may become strong this week.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, March 21, 2014

Weekly Trading Forecasts on Major Pairs (March 24 - 28, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
It should be noted that the surge of strength in the Greenback has resulted in new dominant biases in the markets. This pair has been forced to show a Bearish Confirmation Pattern on it (the GBP/USD has also gone bearish), while the USD/CHF has been showing some stable stamina. This pair has been trading below the resistance line at 1.3800, going towards the support line at 1.3700, which is our target for next week.  

USDCHF
Dominant bias: Bullish
Recently, this pair was in a constant, slow and steady bearish run, but the current strength in the Greenback has changed the situation. There is now an established bullish signal on the pair, and the price is trading above the support level at 0.8800. The ultimate target is at the resistance level of 0.8900; which may even be breached to the upside, provided that the buying pressure in the market is constant and strong enough.

GBPUSD
Dominant bias: Bearish
The Cable was in an equilibrium phase for a few weeks before the current breakout to the downside came into effect. It was normally expected that the price would relentlessly pursue the direction it took when it finally broke out. When the Cable broke out of the equilibrium phase, it was towards the south. Since then, the price has plummeted by over 150 pips. The bearish pressure is currently strong and the price may end up testing the accumulation territory at 1.6400.

USDJPY
Dominant bias: Bearish
The condition on the USD/JPY brought about a bogus bullish signal some days ago. Later the strength of the JPY pair has proven too much for the pair to maintain its bullish stance, thus making it difficult for the market to continue going further upwards. That rally has even proven to be an excellent bearish signal. Should the market close below the price level at 102.00, it would be easier for it to accelerate towards the demand level at 101.50.

EURJPY
Dominant bias: Bearish  
On March 17, 2014, there was a bullish attempt in the context of a downtrend. It simply turned out that the bullish attempt was an opportunity to sell short: from a weekly high of 141.96, the price on the cross has dropped to test the demand zone at 140.50, which could eventually be breached to the downside, as the price goes further bearish.

This forecast is concluded with the quote below:
                               
“It’s always about the long-term chance of making money by trading – not every day and not even every week either but every year.” – Bill Hubard


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



Thursday, March 20, 2014

Important Questions Traders Should Ask Themselves

“Only execute the trade when the chart matches your plan, if it doesn’t – no trade.” - Gavin Knoesen

Intelligent speculation includes some salient aspects like opening of trades, trade management, emotions control and strategy optimization. There is no way around the fact that these salient aspects can never be avoided by active traders, but our attitudes towards them can make a big difference between good and bad trading habits. These are the questions traders need to ask themselves often and often:

Did I open my trade according to my entry criteria?

It’s imperative that you open a trade according to strict entry criteria. Trading discipline entails your refusal to trade a setup that doesn’t match your entry criteria; no matter how attractive the setup is. Trades shouldn’t be opened randomly. No matter what the news shows or how attractive the markets are, we won’t open any trades until our setups appear. You make mistakes only when you don’t follow your trading rules. A loss trade isn’t a mistake, provided that you opened the trade according to your entry rules. A trade that’s opened in violation of your entry rules is a mistake – whether it results in profits or loss.

Did I follow my trade management plan when the trade was open? If not, why?

This is one of the reasons why many traders find trading difficult: they’re unable to stick to their trading plans after they enter the market. A swing trader opens a trade and quickly closes it after about a 10-pip gain, for the fear of a price reversal. An intraday trader decides to run a negative position for several more days with, the hope that the price could turn in her/his favor. These attitudes are bad. You need to know that once you enter the market – irrespective of how great your signal is – trading becomes managerial. It’s your trade management and exit techniques that’ll ultimately determine your long-term success, and this has nothing to do with your trading accuracy. When you’ve open positions, never forget to stick to your breakeven rule (if any), trailing stop rule (if any), trading duration rule and exit rules. Anyone who constantly violates her/his trading management rules needs psychological help.

What was my reaction after the trade was closed?

If you traded flawlessly, the outcome didn’t matter. Sane traders gauge their success by how flawlessly they execute their trades, not by how much they make or lose. If the AUDJPY moves significantly in your favor, it makes little difference than when it moves significantly against you.  A significant movement in the market is a significant movement. If the AUDJPY moves significantly against you, it makes little difference than when it moves significantly in your favor. An adverse movement has negligible effect on good risk managers; whereas a favorable movement has satisfactory effect on their portfolios. Traders occasionally sustain negativity but they don’t want to take responsibility for that, they think they’ve been treated unfairly when the markets simply move without having anyone in mind. We must take responsibility when we make a profit and when we make a loss.

Is there any way I can optimize my trading strategy?

Permanently victorious traders use conservative trading methods for long-term objectives. It doesn’t matter whether the methods are boring or not. Anyone looking for thrill may try sky-diving or bungee jumping. The real trading breakthrough has to do with finding a good setup rule and trading it constantly. A negative expectancy system needs improvement, but a positive expectancy system doesn’t need that. This doesn’t mean that the positive expectancy system can’t have losing streaks. During a losing streak which may be normally protracted, it’s sad that an average trade abandons a good system when it’s on the brink of a winning streak. The newly found system can either start losing or winning right away; only to later begin to experience an opposite streak. You oughtn’t to be discouraged even if you strategy is no longer interesting. Stick to it as long as it helps you make money. And don’t forget that it’s possible to keep your account safe no matter what the market does.

Conclusion: It’s imperative that you stick to your winning strategy – even if it’s no longer interesting. Your trading strategy mayn’t be interesting, but keep on using it as long as it helps you obtain average winners that are bigger than average losers over a long period of time.

“Many people hold trading in the same regard as gambling but it is an unfair comparison. Trading is not gambling unless you are trading blindly, randomly, without adhering
to a trading plan and completely ignoring any risk management.” – Stuart McPhee




Eye-opening trading lessons: Lessons from Expert Traders

Tuesday, March 18, 2014

HSBC Holdings – Sell

HSBC (LSE:HSBA) is a bear market and it would continue going downwards for as long as the selling pressure continues, even when speculators think market would reverse.  The quondam bias testifies to this.  Past rallies have been punctuated by sharp drops in the price. Every bias requires those who think it would end quickly, so that it can really continue.

The EMAs 10, 20, 50 and 200 are sloping downwards, thus supporting the downtrend (the color that stands for each EMA is showcased on the top left side of the chart). Although there would be bullish attempts along the way, the price may reach the support levels at 500.0 and 450.00 respectively.

Conclusion: The most crucial thing is that HSBC is plummeting, irrespective of the price levels. Many traders have backstabbed themselves by trying to go long in a downtrend.

This forecast is ended with the quote below:

“The only way for a novice trader to make it as a trader is to make a lot of mistakes, many mistakes more than once, until they figure it out and say, “Okay, this is the way I’m
going to trade.” And it may not be the way other traders do it. You live and die with your own way. That is what every professional trader does.” - Peter Brandt


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders

Source: http://uk.advfn.com/newspaper/authors/azeez-mustapha

Exxon Mobil - Buy

Since the upwards breakout in early February 2014, Exxon Mobil (NYSE:XON) has assumed a bullish bias, with the probability of going further north.

The price broke out from the Trendlines, closing above the upper Trendline and trending further north. Now, it is consolidating to the downside. The price may keep on going northward, or it may get corrected towards the demand zone at 90.00 before it rallies massively. Popular stocks tend to pull back seriously during their northward journey. You shouldn’t hesitate to buy those pullbacks, especially when a bullish determination is detected. The RSI period 14 is almost crossing the level 50 to the upside: the ‘buy’ signal is still novel. The price can reach the supply zone at 100.00, breach it to the upside, and continue trading further upwards.

Conclusion: This market should be favorable to buyers. We simply need to look for a strict entry rule and follow it always. We thus do well to trade our plan and let profits take care of themselves.

This forecast is ended with the quote below:

“There's no time to dwell on losses while actively trading. It gets you nowhere. If you want to stay ahead of the crowd, you have to actively solve your problems. You need to find new trading solutions. Guilt distracts you from working out creative solutions.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Monday, March 17, 2014

JPY Pairs Pullbacks Trading Signals (March 17 - 28, 2014)

Instrument: USDJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 101.798
Stop loss: 102.806
Take profit: 99.806

Instrument: AUDJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 92.478
Stop loss: 92.524
Take profit: 90.524

Instrument: CADJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 90.026
Stop loss: 93.037
Take profit: 90.037

Instrument: CHFJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 116.570
Stop loss: 117.579
Take profit: 114.579

Instrument: EURJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 141.719
Stop loss: 142.741
Take profit: 139.741

Instrument: GBPJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 169.345
Stop loss: 170.371
Take profit: 167.371

Instrument: NZDJPY
Order: Sell
Entry date: March 17, 2014
Entry price: 87.176
Stop loss: 88.198
Take profit: 85.198


Recent performances
December 2013 = 5.0%
January 2014 = 2.1%
February 2014 = 4.5%

Note: The period mentioned above reflects the duration of an open position taken from the signals. For you to know the principles and reasons behind the signals, please see the article titled “An Introduction to a JPY Pairs Pullbacks Trading Method.” The trade and risk management recommendations for open positions are also contained therein. The URL that directs to the article would soon be made available.

Disclaimer: Trading signals are provided for information purposes only and shouldn’t be construed as trading advice.



Eye-opening trading lessons: Lessons from Expert Traders

Daily analysis of major pairs for March 17, 2014

Since the USD/JPY is extremely bearish, we are looking forward to selling rallies on it this week.

EUR/USD: The bias on this pair is bullish, and the price is expected to trend higher this week. The possibility of pullbacks cannot be ruled out, but the threats should be contained at the support lines of 1.3850 and 1.3800 respectively. Meanwhile the resistance line at 1.4000 is a valid target for this week.


USD/CHF: This is a bear market, although it is slow and tardy in manner. The support level at 0.8700 has been tested and it is should be easily re-tested, and breached to the downside. After this, the price would then go further downwards towards the support level at 0.8650 – which is our target for this week.

GBP/USD:  The Cable, which is a kind of a trendless market, remains difficult for swing traders to handle. Only intraday strategies are recommended here. One may buy at the distribution territory of 1.6700 and sell at the accumulation territory of 1.6600; for as long as the trendless phase holds out. Eventually, there is going to be a serious breakout which leads to a clear directional bias. When this happens, it is more likely to be towards the downside, for there is a bearish indication in the chart at the present. 

USD/JPY:  Since the USD/JPY is extremely bearish, we are looking forward to selling rallies on it this week. Yes, in the face of the current Bearish Confirmation Pattern in the chart, the only sensible thing is to seek a short trade when the price rallies in a downtrend. The price may reach the demand level at 100.50 this week.

EUR/JPY: The EUR may not be as weak as the USD, but the stamina in the Yen is more than what the currency could withstand. This cross dropped throughout last week and the bearish scenario on it has been confirmed. We are bearish for this week.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, March 14, 2014

Weekly Trading Forecasts on Major Pairs (March 17 - 21, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This pair is a bull market irrespective of the recent pullback on it. The pullback is just a good opportunity to go long when the price is on sale and in the context of an uptrend. Our target remains at the resistance line of 1.4000. Only a situation in which the price is below the support line at 1.3800 could render the bullish outlook invalid.

USDCHF
Dominant bias: Bearish
Since early February 2014, there has been a bearish signal in this market and the price has been going downwards in a slow and steady way. The price has gone down by around 350 pips; while rallies in the price have tended to proffer short-selling opportunities. The support level at 0.8700 has been tested and would be tested again. It could even be breached to the downside as the selling pressure becomes intense again.  

GBPUSD
Dominant bias: Bearish
Since February 17, 2014, the Cable has generally been in an equilibrium phase. Bullish and bearish signals tend to be short-lived, and therefore, intraday trading strategies are recommended. Right now, the market is showing some lack of stamina, and one could look forward to going short at 1.6650, targeting the accumulation territory at 1.6550.

USDJPY
Dominant bias: Bearish
All the JPY pairs have experienced sharp drops in the prices. This is in contrast to the significant uptrends that occurred last week. You see, when the Yen became very weak, the USD, the EUR, the GBP, the AUD, the CAD, the CHF and the NZD rose significantly against it.  When it is now very strong, those currencies drop against it. Since the Yen is a counter-cyclical currency, the economic issues in Japan would only strengthen the currency. The USD/JPY fell by close to 180 pips, testing the demand level at 101.50 before the price bounced upwards. The upward bounce is deemed as being temporary, for that demand level could be tested again and breached, as the price goes further downwards.

EURJPY
Dominant bias: Bearish  
This pair has recently dropped by over 250 pips, leading to a Bearish Confirmation Pattern in the chart. The supply zone at 142.00 is now a barrier to any sustainable rally in the market. The demand zone at 140.00 is a sensible target for the astute bears. The possibility exists that the price could even fall below that demand zone.

This forecast is concluded with the quote below:
                               
“Nowadays I take great comfort in knowing that I really know nothing about what the market will or could do. I just play the odds in favor as best I can, get out when I am wrong and stick with it when I am right. The market will always do what the market wants to do anyway.” – Sam Evans


 Eye-opening trading lessons:  Lessons from Expert Traders




Thursday, March 13, 2014

The Dark Side of the Corporate World


“Let's face facts. Traders with huge trading fortunes only exist because they started doing small things. Once they got the little things right - they catapulted towards success.” - Caroline Stephen

Some decades ago, many people went to school to get knowledge. But nowadays, most people go to school so that they can get jobs when they graduate. Many people crave the white collar job in the corporate world – otherwise known as the rat race. One dictionary describes the rat race as ‘an exhausting routine that leaves no time for relaxation.’ Is that want you want? Please read a true life story below.

One high school student invested profitably in a market and tasted the pleasure of trading. He later went to a university and got a degree that was an equivalent of MBA. He was lucky enough to get a job at IBM and began to play the corporate game. While he was still relatively young, he’d gone very high on the corporate ladder. The career was successful: he flew across the world and rode in posh cars while on official assignments. He thought his own life was OK and that he’d retired wealthy.

In the midst of the apparent ostentation, the man felt like a slave. He was working from Monday to Saturday and for up to 12 hours per day. He seldom went home and if he did, he’d a few hours to rest. He got no time for himself and other important things in life – not to mention friends. He began to experience the dark side of the corporate world.

From the Corporate Job to the Real Financial Freedom
From the year 2000 things began to move from bad to worse, with increasing targets and shrinking income. IBM merged with another company and several thousands of jobs were cut. The economic outlook got bleak and many companies laid off their workers. If he waited any longer, he might also be laid off; and it was better to resign than to get retrenched. The man quickly made up his mind to go back to trading. He tendered his letter of resignation and quit the corporate world.

He wasn’t sure whether he’d make it as a trader or not. He just wanted to give it a try. After all, he’d enough money to survive for one year. He drastically changed his lifestyle and cut back his spending. He then left Germany and settled in the US. He purchased many trading courses and systems, but they didn’t work for him. However, with some of the systems, he’d make money and lose them alternatively. The forlorn man was moving towards the brink of penury.

On day, a trader friend invited him to a bar. They began to talk about trading, and he told his friend that he was tired of losing. His friend didn’t give him a strategy: he simply gave him a trading idea. That idea suddenly revolutionized his trading career. He tested it and saw that it worked best for him.

The man became so successful that he now lives a free and affluent life (a true hallmark of financial freedom). The man now lives in a very beautiful huge mansion on Lake Travis in Austin, Texas. His compound is very big and there is large swimming pool in it. His children are enjoying their dad’s wealth, and life’s been really good to them.

Do you learn anything from this story? The name of the man is Markus Heitkoetter.*

The Best Job in the World
As you probably know, trading is the best job in the world. The best job, ironically, is also one of the most challenging. There’s no successful trader today who didn’t face challenges in the past. If you give up trading, you’ll have no testimony or encouragement you can give others. If you keep at it, you’ll soon attain your financial goals. You mayn’t be very wealthy, but you’ll be financially comfortable.

When starting out, it’s essential to ensure that your mistakes don’t have significant effects on you. It’s not possible for noobs to make permanent success right from the start, for there are lessons to make from one’s mistakes (which also involve pecuniary loss). You’ll also make some wise decisions as a noob; plus you’ll need to learn valuable lessons from all this. This is how you become a great trader eventually. The trading principles that worked more than a century ago can still work in today’s markets.

Conclusion: Personally, I can now better control the effect of negativity on my accounts. I know that I’ve no ability to force the markets to move in my favor, but I can control my approach to the markets. This reality has been mentioned in my past articles. When I constantly retain my sanity – even in the face of losing trades – I’ll not forget that I’ve been faithful to my entry criteria and I’ll be looking forward to new trading setups. We’ve absolute control on our reactions to the outcome of our trades. That’s what we need to do to keep on winning.

This piece is ended with a quote from Markus:

“I am fortunate to be friends with some of the most famous traders in the world. Sometimes we meet in Las Vegas, Chicago or New York to talk about trading and our ideas, and sometimes we just meet at our houses and barbeque together while talking about trading. It’s fun!” - Markus Heitkoetter

*This real life story is adapted from TRADERS’s magazine, December 2013. Source: www.tradersonline-mag.com



Eye-opening trading lessons: Lessons from Expert Traders

Tuesday, March 11, 2014

There is a bullish convergence on Amazon

Amazon.com shares (NASDAQ: AMZN) have been caught in a bullish convergence. The price was recently going upwards, though there is now a pullback in the market.


The appearance of the ADX period 14 shows a volatile sideways movement which is being pulled by the bears. To explain further, the MACD histogram is above the zero line; plus the signal lines which are below the zero line are sloping upwards, in the face of the current pullback. The signal lines would eventually cross the zero line to the upside. This means the current pullback is a good opportunity to go long.

Conclusion: The price of Amazon.com could eventually assume a renewed upward bias, going further northwards. As this happens, we would do well to capitalize on the direction of the markets, while checking the irrational emotions that surround trading. Honestly evaluate your trading weaknesses, and plan ahead to avoid situations that could expose you to temptation.

This forecast is ended with the quote below:


“You may have been taught that money is sacred and that it is morally wrong to risk it and lose it for any reason. Many people hold this belief, but if you want to trade actively, you have to change the way you look at money. From the perspective of the serious trader, money is merely a vehicle used to make more money. It is just part of the tools you need to trade successfully.” – Joe Ross

  
Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders 

Chevron stock consolidates and may rally soon

For Chevron stock (NYSE:CVX), it is a tug of war between the bulls and the bears, which may result in the bull’s victory, as shown in the chart.

While it fails to close below it, the price is hovering almost above the EMA 21. The Williams’ % Range period 20 is a kind of neutral, ready to follow whoever ends up dominating the market. Based on the price action in the chart, it is highly probable that a breakout would occur at last, and when it happens, it would be in favor of the bulls. The support level at 100.00 is the great hurdle to any bearish plunge in this year: the price may reach the resistance level at 125.00 eventually.  

Conclusion: Chevron is expected to go north, according to what the chart says. A proper use of analytical tools and chart patterns has the potential to improve a strategy for additional income. It is true that many people speculate on part-time basis and supplement their income with gains from the market.

This forecast is ended with the quote below:

“Successful traders follow rule-based strategies to minimize emotions… You cannot be consistently successful in trading if you take large losses. No trader is right all of the time… The best way to prevent those large losses is to stop out of trades that are no longer going the direction you had traded.”  - Brandon Wendell

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Monday, March 10, 2014

JPY Pairs Pullbacks Trading Signals (March 10 - 21, 2014)

Instrument: USDJPY
Order: No signal
Entry date:
Entry price:
Stop loss:
Take profit:

Instrument: AUDJPY
Order: Buy
Entry date: March 10, 2014
Entry price: 93.179
Stop loss: 92.183
Take profit: 95.183

Instrument: CADJPY
Order: Buy
Entry date: March 10, 2014
Entry price: 92.990
Stop loss: 91.996
Take profit: 94.996

Instrument: CHFJPY
Order: No signal
Entry date:
Entry price:
Stop loss:
Take profit:

Instrument: EURJPY
Order: No signal
Entry date:
Entry price:
Stop loss:
Take profit:

Instrument: GBPJPY
Order: Buy
Entry date: March 10, 2014
Entry price: 171.934
Stop loss: 170.904
Take profit: 173.904

Instrument: NZDJPY
Order: No signal
Entry date:
Entry price:
Stop loss:
Take profit:


Recent performances
December 2013 = 5.0%
January 2014 = 2.1%
February 2014 = 4.5%

Note: The period mentioned above reflects the duration of an open position taken from the signals. For you to know the principles and reasons behind the signals, please see the article titled “An Introduction to a JPY Pairs Pullbacks Trading Method.” The trade and risk management recommendations for open positions are also contained therein. The URL that directs to the article would soon be made available.

Disclaimer: Trading signals are provided for information purposes only and shouldn’t be construed as trading advice.


Source: www.tallinex.om

Eye-opening trading lessons: Lessons from Expert Traders

Sunday, March 9, 2014

Daily analysis of major pairs for March 10, 2014

Last week, it was rightly predicted that there would be significant movements on the JPY pairs. The pairs moved significantly upwards, breaching more and more supply levels. There are currently pullbacks in the markets, but the uptrends would continue this week. 


EUR/USD: After much dithering, this market has been able to bring about an established bullish bias. The resistance line at 1.3900 was tried before the price moved into a temporary consolidation. This resistance line would be tested again and the price may attempt to move towards our ultimate target at 1.4000.

USD/CHF: The sudden weakness in the USD has caused a serious plunge in the price of the USD/CHF. At this point, the struggle between the bull and the bear is so intense, but the bull cannot help being battered by the bear. The easy/initial target for this week is at the support level of 0.8750. When the price tests that support level, it may bounce temporarily upwards, but there is a possibility of it being tested again and breached to the downside.

GBP/USD:  Here, there has not been a significant bullish move, but the signal in the market is still bullish. The EMA 11 is above the EMA 56, while the RSI period 14 is not below the level 50. There may soon be a breakout to the upside.

USD/JPY: Last week, it was rightly predicted that there would be significant movements on the JPY pairs. The pairs moved significantly upwards, breaching more and more supply levels. There are currently pullbacks in the markets, but the uptrends would continue this week.  The pullback on the USD/JPY could be contained at the demand levels of 103.00 and 102.50 respectively.

EUR/JPY: This cross shot skywards by over 450 pips last week. Right now, there is a bearish retracement which is supposed to be temporary. The market can go upwards again and run into the supply zone at 144.00.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, March 7, 2014

Weekly Trading Forecasts on Major Pairs (March 10 - 14, 2014)

Here’s the market outlook for this week:

EURUSD
Dominant bias: Bullish
The weakness in the USD and the stamina in the EUR have caused the price of the EURUSD to result in a Bullish Confirmation Pattern. The price would continue going further upwards - though not without the possibilities of occasional pullbacks. The strong psychological resistance line at 1.4000 is now the medium-term target for the bulls.

USDCHF
Dominant bias: Bearish
From the previous support level at 0.8800, this currency trading instrument rallied and topped at 0.8894. At that time, the price action nearly resulted in a ‘buy’ signal (which proved to be bogus). Cautious traders would normally wait for an establishment of the bullish outlook before seeking long orders. The ‘waiting’ would have spared them a real surprise because a sudden weakness in the USD caused the price to drop like a stone, slashing though the previous support level at 0.8800, and closing below it. The support level at 0.8700 has thus become an easy target for the bears.  

GBPUSD
Dominant bias: Bullish
In the last forecast, it was said that the bullish signal on the Cable was still valid in spite of the then consolidation and occasional southward pulls on the price. Well, the price has been able to reject further southward pull and has started rising gradually. The bulls’ strength is not very significant but their domination is clear. It is possible for the price to continue going further upwards.

USDJPY
Dominant bias: Bullish
On smaller timeframes, one would see that most JPY opened on March 2, 2014 with minor gaps. When those gaps were seen, it was immediately perceived that there would be significant movements on the JPY pairs during the week. That is exactly what has happened. Starting from March 4, 2014, the exponential weakness in the Yen caused all the JPY pairs to skyrocket by an average of 300 pips within 3 days! The USD/JPY is part of this drama and it is now around the market level at 103.00. There may be pullbacks along the way, but the pair would continue going further upwards, possibly reaching the supply level at 104.00.

EURJPY
Dominant bias: Bullish  
From a weekly low of 139.14, this cross was able to shoot skyward, reaching the supply zone at 143.00. This movement is noteworthy indeed and the price is expected to continue going upwards, punctuated by some transient periods when the price would be on sale.

This forecast is concluded with the quote below:
                               
“The markets are going to reflect the conditions and circumstances that are present in the order flow; and, you’ll want to accept the reality of the charts rather than assume that the reality will change merely because you want it to.” – Dr. Woody Johnson



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

Wednesday, March 5, 2014

Jaffray Woodriff: A Money Doubler?

LEARN FROM THE GENERALS OF THE MARKETS - PART 46

Born in 1969, Jaffray Woodriff is an American trader. He’s CEO of Quantitative Investment Management (QIM), which he co-founded with Michael Geismar in the year 2003. He spent his childhood in Charlottesville, Virginia; and went to the University of Virginia. He largely taught himself the art of trading, for he’d been craving to be a trader in a unique way with computer programs: he achieved unique results.

He’s been referred to as one of the biggest hedge fund managers. Having only 32 persons working at his firm, his firm manages more than $4 billion. With an income of $90 million, he’s been listed by Forbes as one of the highest paid funds managers. He’s featured in Jack Schwager's ‘Hedge Fund Market Wizards.’

Jaffray is married with 2 kids, and he likes to play squash. He likes to write article about various interesting trading topics.

Lessons
These are some of the lessons that can be learned from Jaffray:

  1. While some successful traders have been trained and groomed by other professionals, there are other self-taught traders like Jaffray Woodriff. Discovering what it takes to be a successful trader by trial and error isn’t an easy thing.

  1. Jaffray also had rough/tough times in the past. Since he didn’t give up, he’s now enjoying success in the markets. Are you experiencing any rough/tough times in the markets? Please don’t give up, day by day, you breakthrough comes nearer.

  1. He’s a proof that computer programs can make money for people in the markets. Yes, reliable auto trading programs can help one reach one’s financial freedom providing that one programs sensible risk control and positive expectancy rules into it.

  1. Is Jaffray a money doubler? Far be from that. He simple makes decent but consistent annual returns in the markets. Sometimes he may make 30% or 20% or even 18% (or more or less) per annum. The most important thing is that he makes money per annum. His firm doesn’t double accounts in weeks or months as many people would prefer. The thoughts that most people have about trading are wrong indeed. For you to double your account, you need to bet too big. However, those who risk less tend to make more money than those who risk more. Those who risk less tend to survive bad markets more than those who risk more. The fastest way up may also be the fastest way down.

  1. Sometimes, a combination of good trading methodologies can generate better results that just using one good trading methodology.

  1. It is better or safer to test a trading idea in simulation mode before one applies it on real account.

  1. Tradable setups often appear in the markets over and over again. Historical data contains this as well. This means that trading methodologies that work don’t change with the time and changing market conditions.

Conclusion: When using a trading approach, more is made if one rides one’s gains when one happens to be right.  When the price seems overbought, some would expect it to reverse sharply. In most cases, the reversals that occur are temporary. What you think is overbought can still go far further upwards. This fact may seem impossible, but it often happens that the price that has gone in one’s favor by 1000 points can still go further upwards by another 1000 points (it may even go further than that). This isn’t a new thing.

This article is concluded with a quote from Jaffray:


“…If you are trading the system, and it is not performing in line with expectations over some reasonable time frame, look for overfit and hindsight errors. If you are expecting a Sharpe ratio above 1, and you are getting a Sharpe ratio under 0.3, it means that you have made one or more important hindsight errors, or badly misjudged trading costs…”


Eye-opening trading lessons: Lessons from Expert Traders
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