Adsense

Wednesday, April 30, 2014

The Blatant Realities of Trading – Part 1

“You’re battling your fear, your greed, your hope. All those human emotions are your challenge.”

Forex trading is as rewarding as it’s challenging. For those who’ve mastered the art of trading, it’s an unlimited ATM machine. However, certain conditions must be met before the ATM machine can be unlocked. According to one writer, you don’t need to build your muscle at a gym or go for a fancy university degree in order to face the challenge successfully.

What do you think successful people do in other areas of human endeavors? They give all it takes to achieve their goals, and they don’t give up in the face of failures, hopelessness, hurdles and disappointments.  They believe in themselves and their dreams even when others jeer at them and think they’re bound to fail.

They also take responsibilities for any breakthrough or flops along the way – they don’t blame others for their flops. These kind of people just keep on working towards their goals, irrespective of the hindrances along the way. Can you see that these facts can be applied to trading?

Traders who want to achieve success must admit that they need to stop their negative orders from being open, especially at a predetermined exit; whether or not the market would ever reach their entry levels again. One who honors their stops may sometimes look like a fool, but one needs to admit that one doesn’t know the future and close negative orders when it’s clear that things aren’t going in one’s favor.

It doesn’t matter if the market reverses and starts going in your direction after you cut your loss. Those ‘wise’ speculators who often fail to honor their stops may look smart sometimes, but it’s guaranteed that their career would be short-lived.

Regardless the outcome of your last orders, whether positive or negative, you must admit that you need to place new orders when your entry criteria are met, without being 100% sure whether the outcome of the new orders would be positive or negative. An order you’re skeptical about may win or lose, while the one you’re confident about may win or lose. What matters most here is that you open new orders flawlessly according to your plan, regardless of the results. You must make new orders to make more money or attempt to recover some recent loss, no matter what the outcome would be. In the long run, positive expectancy will bring the odds to your favor.

Conclusion: What it takes to be a successful trader is easier said than done. But doing it is what would indicate what your eventual fate in the markets will be. This is the disparity between success and failure. The principles that bring lasting trading success are easy to preach but very difficult to follow, and that’s why a very small percentage attain lasting success in the markets. The lasting success is within your reach only if you could develop a mindset that accepts the realities of trading and bring your trading approaches in harmony with them. Your key to success lies in your ability to do what most other people find difficult to do. The 2nd part in this series would reveal the exact trading approaches that can improve your experience.

The quote at the beginning of this article is from Peter Brandt. Another quote from him ends this article.

“Consistent performance isn’t necessarily based on the dollars you make, but on the things you need to do to perform – repeating and repeating what you think are your best practices. The goal is to be a consistent performer and then let the money take care of itself.”



Eye-opening trading lessons: Lessons from Expert Traders

There is money to be made on Globo

Globo shares (LSE:GBO) are bearish, but the price seems to have reached some rock-bottom at the accumulation territory of 40.00. Around that territory, the market is volatile and bearish pulls have been sharply rejected. The trend cannot go down forever, for no hen will be unfortunate enough to lay black eggs.

We are watching the action of the Smart Money and capitalizing on their weaknesses.  The recent alignment of the EMAs 10, 20, 50, and 200 (the color that stands for each EMA is shown on the top left part of the chart) reveal that the trend is bearish. However, the price has broken upwards, through the EMAs 10, 20 and 50. The EMA 200 is currently under challenge, and should the price close above it, it would mean the end of the bearish trend.

The probability of the price breaking above the EMA 200 is very high. This would turn out to be a low risk and high return setup: there is money to be made here. Globo price could go on towards the distribution territory at 70.00 – even beyond.

This forecast is ended with the quote below:

It is very important to recognize that statistically, trades would be subjected to strings of wins or losses. Do not be overly alarmed.” – Jay Ng

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders




Monthly Forecast on Gulf Keystone (May 2014)

Gulf Keystone stock (LSE:GKP) is bearish in the medium-term and bullish in the long-term. The bearish bias is strong enough to make the bear profitable and to make the bull anxious.

When the recent bearish bias began, it was thought that things would change as the price tested one support level after the other. However, the support levels kept getting broken to the downside. If thrown upwards many times, the machete would tend to land on its flat side.

However, the current price action reveals that the stock may be trying to bounce upwards. There is a very strong psychological support level at 80.00. As soon as the price is above that support level, the bullish attempts in the market remain logical. The price is making an attempt to break above the upper Trendline; an attempt that could be successful. The RSI period 14 is below the level 40, but it needs to go above the level 50 in order to support the correct price action. A break above the resistance level at 100.00 is would be a clean signal that the bulls have the upper hands.

A renewed momentum makes the market looks sexy to the bulls. The price could move upwards towards the resistance level at 140.00.

This forecast is ended with the quote below:

“Stay realistically upbeat and focus on developing your skills as a trader. Work towards excellence, not perfection. You have to be good, but not perfect. You must have top-notch trading skills, but you don't need to be the best trader in history. When you take your ego out of the picture and stay modest, you'll find it easier to concentrate. And when you focus on the process of trading, rather than on the prize, you'll trade more profitably.” -  Joe Ross (Source: Tradingeducators.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Monday, April 28, 2014

Monthly Technical Reviews on Gold and Silver (May 2014)

Here’s the current outlook on Gold and Silver.

GOLD (XAUUSD)
Dominant Bias: Bearish
There is not yet any Bullish Confirmation Pattern in this market, unless the price goes above the resistance level at 1300.00.  As long as the price stays below the resistance levels, the bias remains bearish. Last week, there were large downswings and upswings in the market. The price reached a new weekly low at 1268.34, and later a new weekly high at 1306.26. The situation in the market now requires some tact in order to generate satisfactory results. One option is this: we would be looking at some levels that could be tested on the upside and the downside. After that, we might be able to take a position.

SILVER (XAGUSD)
Dominant Bias: Bearish
The situation on Silver is nearly similar to that of Gold.  The price dropped like a stone last week but recovered quickly. The demand level at 18.9050 was tested before the price shot skywards, reaching the supply level at 19.8700. That was a movement of over 950 points within the same day! After that, there was a sideways volatility, and it seems the bulls are no longer willing to push the price further upwards. The present correction still helps to show that the bearish outlook on the market is still logical. In the month of May 2014, the price may go more bearish. Nevertheless, it may not reach the recent demand level at 18.9050.


Eye-opening trading lessons: Lessons from Expert Traders


Sunday, April 27, 2014

Daily analysis of major pairs for April 28, 2014

The perpetual weakness on the USD/JPY has resulted in a ‘sell’ signal. This week, the price may reach the demand level at 101.50.  

EUR/USD:  This market traded in a range last week, but the bulls are now gaining upper hands. The price is now showing some bullish determination, but the determination would be clearer when the price closes above the resistance line at 1.3850. Should this become possible, the target for this week would be at the resistance line of 1.3900.


USD/CHF: When the EUR/USD goes upwards, the USD/CHF would have nowhere to go but south. In fact, there has been an initial bearish indication in the chart – which would become very sensible when the price closes below the support level at 0.8800. Should this become possible, the target for the week would be at the support level at 0.8750.

GBP/USD:  The Cable is still bullish and it may go further upwards this week, for this is what is expected to follow the recent consolidation in the market. The price needs to stay cleanly above the market territory at 1.6800, while it tries to go towards the distribution territory at 1.6900.

USD/JPY:  The perpetual weakness on the USD/JPY has resulted in a ‘sell’ signal. This week, the price may reach the demand level at 101.50.  There are supply levels at 102.50 and 103.00. The supply levels would act as barriers to sudden rallies that could threaten the novel bearish signal.

EUR/JPY: This market is not yet attractive; so it is OK to stay aside until there is a directional movement. The most probable direction is southward, especially when the price goes below the demand zone at 141.00. 

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, April 25, 2014

Weekly Trading Forecasts on Major Pairs (April 28 – May 2, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Neutral
The overall bias on the EURUSD is neutral because the market has been in an equilibrium phase for about two weeks. While there is currently no directional bias on this pair, momentum would soon return to the market, which would cause a significant movement in one direction. The most probable directional movement could be towards the north (as confirmed by the price action). Should this happen, one may be looking at the resistance lines at 1.3850 and 1.3900 as targets for long trades. 

USDCHF
Dominant bias: Bullish
This market is bullish but the situation remains precarious. It is so precarious that a movement below the support level at 1.8800 is enough to render the bullish outlook invalid. For the outlook to continue to make sense, the price needs to rise above the resistance level at 0.8850; although the logical target for the bull is at the resistance level of 0.8900. One thing is sure: when serious momentum returns to the market, both the EURUSD and the USDCHF cannot go in the same direction, for they are negatively correlated when the trend is strong.

GBPUSD
Dominant bias: Bullish
This currency trading instrument is still able to maintain its bullish trend, which has been on for several weeks. Here, noteworthy pullbacks proffer opportunities to go long, provided the pullbacks do not override the dominant outlook. The price may end up reaching the distribution territory at 1.6900; it could even go beyond that if the buying pressure is strong enough. Any pullbacks along the way could be contained at the accumulation territories of 1.6750 and 1.6700.

USDJPY
Dominant bias: Neutral
The recent events in the market have made it difficult for the price to go determinedly upwards. The price has also not gone determinedly downwards – hence the neutral bias. Nevertheless, momentum would soon return to the market, which would make the price break out upwards and close above the supply level at 103.00, or break below the demand level at 102.00. The possibility of the price breaking below the demand level at 102.00 is greater because of the perceived weakness in this pair.

EURJPY
Dominant bias: Bullish
It can be said that this cross is also trendless, though the bullish determination can still be perceived. In spite of the struggle between the bulls and the bears, the bears have been unable to drag the price too much downwards. The support zone at 141.30 is a barrier to the bears’ interest; and when price goes out of balance, the bulls may also want to push the price above the supply zone at 142.00, and then the supply level at 142.50. 

This forecast is concluded with the quote below:

“Well the truth is that never before in history have we been more able or have we had more tools at our disposal to fine-tune and isolate risk than at present.” – Dirk Vandycke 



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

Thursday, April 24, 2014

The risk-to-reward of 1 to 2 – a magic ratio

THE IDEAL POSITIVE EXPECTANCY

“It is especially in short-term trading, with a wealth of trading signals, that consistent trading in the overall trend direction pays off.” – Arne and Falk Elsner

One of the big factors in trading success is to think in terms of the risk-to-reward ratio (RRR). That’s your risk in terms of the potential reward. You know, for you to survive in the markets, you’ve to target at least two dollars for every dollar your risk.

Some target three, four, five, or more dollars for each dollar they risk; which is fine. This is the logic behind positive expectancy. In contrast to this, anyone who risks two, three, five… two hundred or five hundred dollars to target one dollar or a few dollars is using a negative expectancy approach. Anyone who doesn’t use stops and who’s determined to run the losses till they break even is using a negative (worse) expectancy approach. The fact is: anyone using a negative expectancy approach can’t last long in the markets. 

The benefits of the RRR of 1:2
Now, let’s go back to the idea of 1:2. In all the years of my grappling with the markets, I’ve seen that the RRR of 1 to 2 is the most optimal one. These are some of the reasons.

1.      The 1:2 expectancy is the least that should be sought by sensible traders. Risking one dollar to target less than two dollars is really not in the trader’s best interest.

2.      With optimal stops and targets, the ratio 1:2 is easily achieved than 1:3, 1:4, 1:5… 1:10 etc. While a higher RRR like 1:5 requires a hit rate of 20% or less to attain profits, it’s very difficult to practice, requires a high level of discipline, and requires an unending patience to run the winners. How many traders can surmount the emotional hurdles?

3.      With rational and logical fine-tuning of one’s strategy, one might be able to achieve a hit rate of 40% or more over time, thus the RRR of 1 to 2 is enough to make one a consistent winner.

4.      The best trending pairs and crosses in Forex are often the ones most analysts tend to ignore.  Remember that you need price movement before you can make money. No movement in the price, no profits/loss. If you trade highly trending Forex instruments, it’s more probable that you would achieve good results with the expectancy of 1:2 so that your stops/targets are triggered quickly as you look at short-term and medium-term biases. When more liquid and highly trending trading instruments are sought and played, the possibility of roll-downs is reduced while the rise in equity becomes noticeable. When the EURAUD is bullish, you need not give yourself any headache by going for complicated analysis. When the cross is bullish, you’d see the price going upwards.

5.      If you use the RRR of 1 to 2, it’ll be possible for you to reach breakeven with a hit rate of 33.3%. This means that recent losses are easily recovered. The risk-to-reward of 1 to 2 is indeed a magic ratio!

Conclusion: It’s very crucial that we acknowledge we can’t be correct most of the time, or often more than half of all our orders. Our hit rate may be far lower than that, but we’ll become profitable if we know how to handle our negative and positive trades, things over which we’ve control (especially when it comes to their effect on our portfolio over time). Using high lot sizes relative to our portfolio size is like courting financial disaster. It’s thus far safer to stake a maximum of 1% per trade while targeting at least, 2 dollar for each dollar that is at stake.

This piece is ended with the quote below:

“It takes patience and a strong commitment to study the markets and identify good setups... But in the end, it's worth it. If you carefully select high probability setups, you'll trade more profitably and you'll be more satisfied with your performance.” – Joe Ross


Source: www.tallinex.com

Eye-opening trading lessons: Lessons from Expert Traders


Tuesday, April 22, 2014

Plexus Holdings: A Very Difficult Market

Plexus stock (LSE:POS) is a difficult and choppy market as shown in the chart. The price is jumpy with no protracted directional move.

However, what would be the next directional move when momentum returns to the market? The ADX period 14 shows that the market is in an equilibrium mode; but the fact that the DM- is above the DM+ means the bearish determination is strong enough to be noticed.  On the MACD (default parameters), the histogram is below the zero line. The signal lines are also sloping downwards and when they succeed in crossing the zero line to the downside, they can only show one thing. The price may drop further.

We are not really interested in the fundamental noise that is behind the price action, we are interested in the effect it has on our portfolio. Now instead of worrying about the hit rate, we would want to use a sound position sizing technique to achieve our objective – that is to survive the current phase and make gains when there is a breakout. 

Conclusion: Plexus price is very choppy, but the it may drop further when a breakout does occur.  The current volatile and trendless phase in the market is giving the bear enough time to gain an upper hand over the bull. One whose teeth were sharpened by us now bites us with the same teeth.

This forecast is ended with the quote below:

“No one in his right mind would start out any position with 180 per cent of his/her total capital.” – Dirk Vandycke

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Iofina Shares Shall Dip Further

Iofina shares (LSE:IOF) are expected to dip further. The overall bias is bearish – established bias – and the possibility that the price may dip further is very high.

The price is below the EMA 21. The Williams’ % Range period 20 recently sloped upwards in the context of a downtrend. This is a kind of ruse to make buyers think that the rally would push the price significantly upwards. The rally has proven to be a trap, for the price has headed back southward. The Williams’ % Range is going into the oversold territory.

When the price possibly drops further; it might reach the demand level at 30.00. In this kind of market, money flows from noobs to pros. It is advisable to seek short positions only.

One strategy that works in a bearish trend is enough for this market. Statistics have revealed that a combination of two or more strategies may not improve trading results. That kind of combination would simply decrease the overall increase of the equity curve. The only way to enable an agreeable effect on our portfolio is to capitalize on our positive positions.

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders



Monday, April 21, 2014

Gold and Silver – Turbulent Markets

Here’s the current outlook on Gold and Silver.

GOLD (XAUUSD)
Dominant Bias: Bearish
Gold is now a turbulent market as a result of the upswings and downswings in the price which are brought about by cut-throat struggle between the bull and the bear.  The overall bias has been bearish: although there is a speculation that gold might soon rally, it would be prudent not to open long trades until there is a confirmation of a bullish bias in the market (something that is currently nonexistent). There is a price bottom at the support level of 1277.52 – a real challenge for the bear if they wanted to push the price below that point. In effect, the aforementioned support level could be a good target for intraday traders. The target could then be shifted further below, say, the support level at 1270.00 after the initial support level has been breached to the downside.

SILVER (XAGUSD)
Dominant Bias: Bearish
This market is also turbulent and volatile, just like its Gold counterpart. The demand zone at 19.1900 is a good bottom; a hurdle to any bearish pulls below that zone. Meanwhile, the demand zone might be a good target for intraday trader, which could be shifted further downwards should the price breach that demand zone to the downside and closes below it. In another scenario, the price might even rally strongly enough, but long trades would not be rational until the possible new bias is established.

Source: www.tallinex.com


Eye-opening trading lessons: Lessons from Expert Traders


Sunday, April 20, 2014

Daily analysis of major pairs for April 21, 2014

The USDCHF has already generated a bullish signal: the price would easily test the resistance level at 0.8850.

EUR/USD: It is still safe to call this pair a bull market. As long as the price is above the support line at 1.3800, the bullish outlook is valid. Any movement below that support line would mean a serious threat to the bullish outlook. It would also mean that long trades are no longer sensible. For the bullish outlook to continue, the price needs to go upwards towards the resistance lines at 1.3850 and 1.3900, especially when there is a break out of the current equilibrium zone.


USD/CHF: The USDCHF has already generated a bullish signal: the price would easily test the resistance level at 0.8850. There is even a possibility that the price may go beyond that target, especially with an increase in the buying pressure. So, it would not be a surprise when the price also reaches another resistance level at 0.8900.

GBP/USD:  There is still a Bullish Confirmation Pattern on this currency trading instrument. The upward movement in the price has been challenged at the distribution territory of 1.6800, but the market looks determined to break that distribution territory to the upside. The market would succeed in doing this: the probability of doing it is very high. So we may be targeting another distribution territory at 1.6900 this week.

USD/JPY:  The signal in the chart is a ‘buy’ signal. The indicators on the 4-hour chart confirm this. The supply level at 102.50 has already been tested, and it could be breached as the price goes further north, towards the supply level at 103.00.

EUR/JPY: This cross closed at 141.41 last week; with some bullish determination. We would like to look for long orders this week, putting initial target at the supply zone of 142.00.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, April 18, 2014

Weekly Trading Forecasts on Major Pairs (April 21 - 25, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This market has been moving sideways for days without going in a directional move. However, the bullish bias is still valid because the price has been able to stay above the strong support line at 1.3800. Any movement below that support line could mean the end of the bullish bias. Really, the odds of the price moving upwards are very high when momentum returns to the market. For the bulls, there are targets at the resistance line of 1.3900 and 1.3950.

USDCHF
Dominant bias: Bearish
Although the current situation on this pair can still be termed as being bearish, the situation is highly precarious. The bearish outlook is under a serious threat because the pair has been moving slowly, but steadily upwards recently. The slow and steady upward move could render the bearish outlook totally useless, especially when the price breaks the resistance level at 0.8850 to the upside and closes above it. When the price stays below the resistance level at 0.8850, the bearish outlook is valid, but when it moves above it, the bearish outlook becomes useless.

GBPUSD
Dominant bias: Bullish
The Cable is strong indeed! With the Bullish Confirmation Pattern in the chart, it is more likely that the price would continue going further upwards in spite of the bearish retracement that is taking place on in. The retracement is shallow, and it is not expected to go below the accumulation territory at 1.6750. For the northward trend to continue making sense, the Cable needs to go above 1.6800 again and trade further upwards. Any test of the accumulation territory at 1.6700 (though not anticipated) can mean a danger to the bulls.

USDJPY
Dominant bias: Bullish
It is no longer valid to call this currency trading instrument a bear market, for there is a new ‘buy’ signal on it. It cannot be mentioned for sure whether the signal would be sustained or not, but one thing is true: a short trade does not make sense here at the present. For the past several days, the price has been making attempts to trade upwards (the bears could be slice up!); and this action is what has resulted in a bullish indication. Thus, the price could go on to test the supply levels at 103.00 and 103.50 within the next several days.

EURJPY
Dominant bias: Bullish
Needless to say, this cross has gone bullish and long trades ought to be sought now. The price action has formed a Bullish Confirmation Pattern in the chart and the price looks determined to challenge the supply zone at 142.00, plus another supply zone at 142.50 (providing that the buying pressure is intense enough).

This forecast is concluded with the quote below:

“When I started in the 70’s you could make money with a 10-day moving average. Over the years the noise has increased and you need to trade slower and slower trends.” – Perry Kaufman


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



Thursday, April 17, 2014

What Would Happen Next to the EURUSD?

“It is not so important to be right, but how to make money when you are right.” – Ivan Hoff

I remember what happened at one interesting trading conference I attended about 5 months ago. It was an interesting conference indeed. At one stage, the moderator showed us a EURUSD chart (whose dominant trend was bullish, but the short-term trend was bearish) and asked us this question:

Where do you think the price would go next?

There was silence in the hall. Predicting the future is a great challenge; plus it’s senseless to talk about the future price action with an utmost certainty. A few traders stood up and tried to give their opinions. I later stood up, took the microphone and said that two things could happen at that juncture: the price could turn in favor of the dominant trend which would continue OR the short-term bearish correction could actually be the beginning of a strong bearish outlook. Was I wrong?

One man quickly got up to announce that I was wrong. He said that the price MUST turn upwards since the dominant trend was bullish. I kept quiet. Can you see how traders showcase the mindset that can endanger their career?

This was a bone of contention; some seriously thought the pullback would end up blending with the overall trend. But the reality was that it could be the beginning of another long term reverse trend.

Being opinionated is a not a good thing in trading. Those who’ve enjoyed lasting success in the markets know how to admit their errors, get out of losing trades and look for the next signals which may be profitable. However, opinionated traders would never admit their mistakes and would take a decision to run their loss for as long as the market goes contrary to them.  An opinionated trader may even be confident enough to open a very large position (like 20% or 40% risk), believing that the price MUST go in their favor. The person may even refuse to put a stop for disaster prevention

Was the man right? Yes, he was right, but the short-term correction took the price downwards by up to 500 pips before the price went in the direction of the dominant bias. In some cases, the market could even go down by over 1500 pips within the next few weeks before any meaningful reversal, if that would happen at all. Can you see how people make decisions that have adverse effects on their portfolios?

Was I also right? Yes. I gave two possibilities of the price direction – either up or down.  In order to benefit from this expectation or ensure that an adverse movement doesn’t affect my portfolio, I truncate my loss when I’m wrong and give my gain some leeway when I’m right. I’m not opinionated: I know what to do whenever I’m proven wright or wrong.

Being Bearish or Bullish Makes No Difference
It’s common for many a trader to say ‘I’m bearish/bullish on this market.’ That doesn’t make any difference.  What would happen when a swing trader goes short in a market because she/he hears a scalper announcing being bearish? When a position trader says she/he is bullish, do you think an intraday trader can make a ‘fool-proof’ long trade?

 I look at a EURUSD chart and I say I’m bearish, but you look at it and say you’re bearish. A chart is a chart, plus both the bear and the bull can make money in the same market. When a dominantly bearish market rallies by over 600 pips, the bull can make some gains. In the same market, the bear can also make some gain when the price pulls back in the direction of the dominant bias in which the buying selling is prevalent – what make the difference are the timing methods and trading styles.

Being bullish or bearish makes no difference. What makes difference is your respect for the realities taking place in the markets. A confirmation of a reversal wouldn’t happen overnight; it takes days or sometimes, weeks.   The transition from a downtrend to an uptrend doesn’t happen in a flash; instead there would be a gradual thinning out of the downtrend which then translates into an uptrend, causing lower highs amidst consolidation and swing lows.  No matter how significant a counter-trend bullish or bearish engulfing candle pattern is, it doesn’t mean the trend is over, unless the next series of candles continue to hold onto the reversal long enough. Otherwise, the significant bearish or bullish engulfing pattern may be a spike which gives traders an excellent opportunity to enter the market on a good bargain.

Conclusion: The FX markets are among the most liquid trading markets in the world, and therefore, when a strongly trending instrument assumes an established bias, it may go on longer than anticipated. In the face of this fact, a reversal in the context of the established bias may either be transitory or be a start of a protracted movement in the opposite direction. Rather than being opinionated about a direction, you’ll help yourself by aborting your losers and riding your winners – the only way to face the vagaries of the markets victoriously.

This fact is summed up in the quote below:

"I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out. If they are going for me, I keep them." - Paul Tudor Jones


Eye-opening trading lessons: Lessons from Expert Traders


There is a clean opportunity to go long on Quindell

There is a good opportunity to go long on Quindell stock (LSE:QPP). The long-term trend is bullish and the current pullback creates a great chance in the market. Here, the stubborn bear may not fear the possible northward outbreak: the fly does not fear death.  But it is certain that the bear would be sliced up when the price goes north.

4 EMAs are used for the analysis. They are EMAs 10, 20, 50 and 200 (the color that stands for each EMA is shown at the top left part of the chart). All the EMAs are sloping upwards, with the EMAs 50 and 200 acting as good support. The current pullback may be halted when it reached the EMA 50, and from there the price may rally, probably reaching the resistance level at 50.0.

Conclusion: Quindell would move upwards. When the stock fails to move, we would not want to trader it. Going long when things look cheaper gives us some edge. We do not want to force the market to give us profits, but we are thankful for whatever profits it gives us.

This forecast is ended with the quote below:

“The best traders understand that there is no Holy Grail and think about their system in terms of probability. Because the outcome of any single trade is unpredictable (random).” - Dr. Dariusz Swierk

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessosn from Expert Traders


San Leon: Go short until the price reaches 2.00.

San Leon shares (LSE:SLE) are very weak; so they would continue going downwards until they reach an accumulation territory that is strong enough to challenge the downtrend.

The price has been dropping since early February 2014. It consolidated this month, but later broke out below the lower Trendline. The RSI period 14 is likewise below the level 40, going towards the level 30. The weakness it strong enough to continue pushing the price downwards, and the price may reach the accumulation territory at 2.00.

Conclusion: Shorting San Leon shares could make us realize profit. The entry criterion is not the only thing we need to make money; so we need to manage the trade very well. You would thus need to make the decision whether or not to take an action. No-one else would make the decision for you. When you are pressed and you want to go to toilet, you cannot send someone to do that for you.

This forecast is ended with the quote below:

“Keep learning, keep growing, keep tweaking your trading. Stick with what makes you money and allows you to keep it, discard what does not…The question is not where you are now in your trading journey and how much money you have, the real question is who you will be and what you will have five and ten years from now if you keep doing what you are doing. Keep studying, keep growing, never give up.” – Steve Burns (Source: Tradersonline-mag.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders




Monday, April 14, 2014

Silver May Turn Bullish, Just Like Gold

Here is the current outlook on Gold and Silver.

GOLD (XAUUSD)
Dominant Bias: Bullish
As it was forecasted before, the price on Gold has become bullish and the perpetual bullish attempts in the market (in spite of some occasional pullbacks, which are often transient) are now conspicuous. From the support level at 1277.50, the price has moved upward seriously. At the time of preparing this article, Gold was trading at 1326.40. The medium-term target is at the resistance level of 1380.00. Sure, there would be pullbacks along the way, but the confirmed bias in the market is bullish.

SILVER (XAGUSD)
Dominant Bias: Neutral
We can say the bias on Silver is currently neutral because the market has been flat (trendless) for the past few weeks. Within the weeks, there has been a deadly tug-of-war between the bulls and the bears, accompanied by volatile upswings and downswings, with no side having a clear upper hand. However, a closer look at the chart reveals that a bullish trend may be imminent as the market seems to have found a bottom at 19.530. The era of the “Death Cross” may be thinning out gradually; plus this is accompanied some bullish determination. It may be possible for this market to go into a positive correlation with Gold – something that is not unusual. Our next target is thus at the supply level of 20.600.


Sunday, April 13, 2014

Daily analysis of major pairs for April 14, 2014

The USD/CHF is weak and it is currently challenging the support level at 0.8750. Once the support level has been overcome, the price would go to the next target at 0.8700.

EUR/USD: This currency trading instrument closed at 1.3884 on Friday, April 11, 2014. It closed on a bullish note, which means that the price was bullish last week. This bias is also expected to continue this week. The resistance line at 1.3900 is currently under siege, but the chances that the price would breach it to the upside are very high.


USD/CHF: The USD/CHF is weak and it is currently challenging the support level at 0.8750. Once the support level has been overcome, the price would go to the next target at 0.8700. The bearish outlook in the chart ensures that the selling pressure may continue as the pair weakens further.

GBP/USD:  The Cable was bullish last week, though it gave up some of its gains. From the distribution territory at 1.6800, the bullish force in the market was rejected and it was corrected downwards by up to 70 pips. The price is now below the distribution territory at 1.6750, but it may challenge that territory again, break it to the upside, and end up closing above it.

USD/JPY:  The USD/JPY tanked after testing the supply level at 104.00 and having dropped by over 250 pips, testing the demand level at 101.50. It seems that further dip is being halted but the price may breach the demand level to the downside.

EUR/JPY: This is also a bear market, though the weakness is not as strong as that of the USD/JPY. It may be possible that the price would go upwards, but it would be sensible to think the outlook remains bearish as long as the price stays below the supply zone at 141.50.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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

Friday, April 11, 2014

Weekly Trading Forecasts on Major Pairs (April 14 - 18, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This pair rejected the recent southward pull on it, trended upwards and resulted in a confirmed bullish bias. From the support line at 1.3700, this market has moved upwards and it could test the resistance line at 1.3950. Testing the resistance line at 1.4000 also is not an impossibility, for the trend has a probability of continuation rather than that of a reversal. Along the way there could be some pullbacks before the pair reaches the aforementioned targets.

USDCHF
Dominant bias: Bearish
The USD/CHF has been weak so far – that is the latest development in the market. The strength in the EUR/USD is pushing the USDCHF downwards, for they must go into negative correlation with each other, especially when there are significant moves in the markets. As long as the EUR/USD is strong, the USD/CHF pair will continue its weakness; it could reach the support level at 0.8700.

GBPUSD
Dominant bias: Bullish
The significant rally in this currency trading instrument has resulted in a Bullish Confirmation Pattern in the chart. The distribution territory at 1.6800 has been challenged before the price was corrected a little. The price could go upwards again to challenge that distribution territory. It may slash through it, close above it and go further upwards towards other distribution territories at 1.6850 and 1.6950.

USDJPY
Dominant bias: Bearish
It was expected that the last bullish run on this currency trading instrument would hold out till around April 10, though those who went against the Yen would have realized some gains in the latter part of March 2014. The present conspicuous weakness in the USD has resulted in an established bearish outlook. It would, therefore, make sense to seek short trades here. The market level at 101.50 has been besieged, and with an increase in the selling pressure, the market level would be violated as the prices reaches out for the market level at 101.00.

EURJPY
Dominant bias: Bearish
The bias on this cross is bearish, but the trend itself has been limited in force because of the perceived strength in the EUR. The price is very volatile; plus the struggle between the bears and the bulls is intense. However, the current price action shows that there are greater odds on the side of the bears. We may want to put our target at the demand zone of 140.00. 

This forecast is concluded with the quote below:

“The biggest mistake you can make is changing your trading style based on your previous trade or series of trades.” - Peter Brandt


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



Wednesday, April 9, 2014

Ray Dalio: The Steve Jobs of investing

LEARN FROM THE GENERALS OF THE MARKETS - PART 47

“We are easily deceived when we are told exactly what we want to hear.” – Malcolm Robinson

Ray Dalio was born in August 1, 1949, in Jackson Heights, Queens, New York, United States. He’s an American hedge fund guru. Being a son of an artiste (the only child of his parents), he began to deal with the markets at the age of 12. He’s both a BA and an MBA from reputable universities.

After his university experience, he worked at NYSE. Then he worked as director of commodities at Dominick & Dominick LLC; after which he was both a broker and trader at Shearson Hayden Stone. In 1974, he founded an investment firm named Bridgewater Associates. This firm has been playing the markets triumphantly since then. In the year 2012, it became the largest investment firm in the world; with assets that were worth $120,000,000,000. His firm’s website is: Bwater.com.

In 2007, Ray accurately forecasted the credit crunch – which his firm survived with profits. Since he was worth $10,000,000,000, he was named the 31st richest person in the USA (88th in the world), in March 2012. In the recent years, top magazines have included him in the list of the world’s most influential people.

He lives in Greenwich, Connecticut. He’s married and blessed with 4 children

Lessons
Here are some of the great trading lessons that can be learned from Ray:

  1. Ray Dalio is one of the richest hedge funds managers on this planet, yet his firm’s performances are not always great. There were years he made good profits, and there were a few years in which the results were either small negativity (which was easily recovered), flat or breakeven. Despite this, he stands firm as an investor. Do you quit trading when your performances don’t go according to your expectation? Do you abandon your good strategy during periods of flat performances, fleeting negativity or results that are below expectations? This isn’t the right action to take; for all strategies, whether manual, semi-automated or automated would eventually experience the aforementioned phases, but good ones will soon resume bringing profits. Bad market conditions may try hard to discourage you and wreck your determination. Sadly, the trading course is littered with those who had a determined start but did not keep going. Negative thoughts may haunt you, but you’ll stand firm and stick to your goals.

  1. It’s best to accept that your trading methods don’t know what will happen in future. This would enable you to take measures that can safeguard your portfolios in worst-case scenarios. Traders that do well are those who accept that the future can’t be predicted.

  1. It’s better to be active in the markets than to be reactive. It’s great for traders to trade in the moment. The markets – just like an economy – aren’t that complicated unless we make them so for ourselves.

  1. According to Ray, one of the biggest problems facing traders is ego sensitivity which prevents us from working on our weaknesses and encouraging our strengths. Traders who want success should do the opposite.

  1. One journalist wrote that in spite of the fact that Euro was once dropping like a stone and the markets went maniacal, Ray was able to discuss mosquitoes at that moment.  There are many things Ray’s interested in (like meditation) apart from markets. Don’t be occupied only by the markets, there’s life outside trading. Trade and prosper, but don’t forget to enjoy other aspect of life.

  1. Bridgewater once made around 13% per annum for about 19 years: sometimes 9.4%, sometimes 11%, or sometimes 2%. Hear me, greedy traders, gamblers and money-doublers, do you need to make hundreds of percentage per annum to be called successful? If you think so, well, it’s possible, but I doubt if you can enjoy lasting success in the markets with that approach.

  1. Like Malcolm who’s quoted above, people are really harmed when they’re told what they want to hear. What can help people are the truths they mayn’t want to hear. Ray believes that a notion that’s a brutal honesty, no matter how uncomfortable, yields the best results. He once commented that telling him what he wanted to hear created sugar addition. There’s no need to shy away from the truth because truthfulness is mandatory when it comes to independent thoughts and useful knowledge. In my articles, I’ve been making attempts to reveal the truths about trading; howbeit with blatant honesty. Illusions and fantasies that others peddle can’t help you.

  1. Even if your grades were poor while at school, you can still become great in life. You can still become a successful trader. Ray said he was a very ordinary kid who was a substandard high school student.

  1. It pays to be exposed to the markets when one is very young. I’ve always mentioned this in some of my past articles. When you become older, you’ll find the art of speculation easier. Ray started speculating when he was 12. Then he purchased some Northeast Airlines shares for $300 and he later made over 200%.

  1. If you’re successful in the markets, please share your lessons with other traders so that they can benefit too. After past hesitation, Ray Dalio has started sharing his trading secrets. There are many frustrated traders out there who need our help. Please let’s try to help them. If you’ve killer trading secrets which have made you very rich, they won’t be useful for you in your grave. Please let the world benefit from the secrets.

  1. Ray says: “In return, society rewards those who give it what it wants. That is why how much money people have earned is a rough measure of how much they gave society what it wanted.” Ray’s foundation is helping many organizations. If you’re rich, you can learn from that.

Conclusion: We appreciate experts who started the trading race before us and just continually, consistently, steadily kept running until they passed on. Others started trading before us and they are still trading now. We must determine to keep going until we reach permanent financial freedom. There would be distractions and challenges from time to time. There would be instance along the way when the markets seem to ‘disappoint’ us, but we will be rewarded if we remain steadfast.”

This article is ended with a quote from Ray Dalio:


“I worry about another leg down in the economies causing social disruption because deleveragings can be very painful - it depends on how they're managed.”

Eye-opening trading lessons: Lessons from Expert Traders

Sefton Resources shares to remain hopeless

Sefton Resources shares (LSE:SER) are hopelessly bearish, and they are expected to continue being so. For the past several months, the market has done nothing except to consolidate and trade further south in a slow and steady manner.

The ADX period 14 shows a lack a momentum: it is below the level 20. The DM+ is below the DM-, testifying to the bears’ domination. The MACD (default parameters) has its signal lines and histogram below the zero line. There is a clean Bearish Confirmation Pattern in the chart. The bears are happy with this kind of scenario, and the bulls do not overreact - the hard wood does not produce sap. The bulls know the price cannot go down forever.

Conclusion: Sefton Resources may go as low as 0.100 or 0.050 before it turns upwards. Whatever the market does, we are ready to take advantage of it. You see, the easier a trading approach is, the more quality the signals and that would be much OK. We are indifferent to both negativity and positivity. With this kind of market condition, you would need to adopt a trading style, optimize it and follow it religiously.

This forecast is ended with the quote below:

“There’s no reason to fear risk. Well perhaps there is, but far less than we subconsciously think. In fact risk equals opportunity, as without uncertainty financial markets wouldn’t exist in the first place.” – Dirk Vandycke

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders


Tuesday, April 8, 2014

Touchstone is a bears’ paradise: Price to reach 0.200 and below

Touchstone stock (LSE:TGL) has long become a bears’ paradise.  There has been a steep decline in the price; which was punctuated by short-term rallies and further dips. This kind of bias has really benefitted the bears, since they have learned how to make fortunes from this kind of market. A tormentor makes his victims hardy.

The price is under the EMA 21 and the Williams’ % Range period 20 is has long been around the oversold area. This shows that the market is weak and the bias is expected to continue. The plan here is to use a method that works in a bear market. You stick to your plan, for that attitude pays off.

Conclusion:  Touchstone stock would only go more southward. It could eventually test the accumulation territories at 0.100 and 0.050, before it ever turns upwards. When you pick your signals according to the dominant bias, you do yourself a favor in the long run.  

This forecast is ended with the quote below:

“Many traders are gambling without even knowing it - trading in a way or for a reason that is completely dichotomous with success in the markets.” - Cory Mitchell

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Eye-opening trading lessons: Lessons from Expert Traders




Monday, April 7, 2014

Gold Is Becoming Bullish, But Silver Remains Neutral

Here is the current outlook on Gold and Silver.

GOLD (XAUUSD)
Dominant Bias: Bullish
The bias on Gold was recently bearish, but the precious metal has been trying to reject further southward move. The effort to reject further southward move became serious throughout last week when the price found a bottom at the support level of 1277.63. Since then, the price has been consolidating to the upside. The ‘upside’ consolidation has become vivid enough to result in a ‘buy’ signal in the chart. The current slight bearish correction is too shallow to be termed as being a threat to the new ‘buy’ signal. The price may rise from here and trend upwards towards the resistance levels at 1350.00 and 1370.00. Should the first resistance level get broken, the price would be able to go towards the next resistance level. The support level at 1277.00 should act as a hurdle to any bearish pull along the way.  

SILVER (XAGUSD)
Dominant Bias: Neutral
The term ‘Neutral’ is used for the dominant bias because it would not be correct to refer to the medium-term bias as being bullish or bearish. The movement in the price so far in this month has been largely flat. However, when a breakout does occur, it may be towards the upside. This market appears weak in recent years, but it sometimes gets positively correlated with Gold. It would be very easy for the price to challenge the supply level at 20.6100; that is when the price breaks out upwards.


Eye-opening trading lessons: Lessons from Expert Traders



Sunday, April 6, 2014

Daily analysis of major pairs for April 7, 2014

The USD/CHF tested the resistance level at 0.8950 last week. It would test that resistance level again this week.

EUR/USD:  In spite of the adamancy of the EUR, this pair remains a bear market. Yes, the outlook is bearish and the market is expected to continue going lower this week. The support line at 1.3700 has been challenged vigorously and it is almost giving way to the bears. The main target for this week is at the support line of 1.3600.


USD/CHF: The USD/CHF tested the resistance level at 0.8950 last week. It would test that resistance level again this week. There is a Bullish Confirmation Pattern in the chart, and thus it is normal to expect that, with an increase in the buying pressure, the price would go further upwards.

GBP/USD:  Last week, the Cable was largely bearish. This constant inability to trend higher has already resulted in a bearish signal in the chart. One may want to seek short trades as the price is poised to reach the accumulation territory at 1.6550. Should that accumulation territory be breached to the downside, the next target would be the accumulation territory at 1.6500.

USD/JPY:  There has been a sharp reversal on the USD/JPY, though the long-term bias is bullish. From the supply level at 104.00, the price dropped by over 80 pips, closing at 103.24 on Friday (April 4, 2014). For the bullish bias to continue to make sense, the reversal must be contained at the demand level of 103.00.

EUR/JPY: The weakness of the EUR is affecting the movement on the cross – which is showing some sign of weakness. The price must stay above the demand zone at 141.00. Otherwise, the tide would turn southward.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

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


Friday, April 4, 2014

Weekly Trading Forecasts on Major Pairs (April 7 - 11, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
The pair has remained bearish recently, going downwards slowly and steadily. There is a Bearish Confirmation Pattern in the chart, and with the continuation of the selling pressure, the price would easily test the support line at 1.3650. Should that support line be breached to the downside, the next target would be the support line at 1.3600. The resistance lines at 1.3750 and 1.3800 should act as good barriers to any possible rallies.

USDCHF
Dominant bias: Bullish
Since March 20, 2014, there has been a bullish signal on this currency trading instrument, plus the price has moved upwards by over 150 pips. The confirmed bullish bias is expected to continue, especially with an increase in the stamina in the USD. The market may reach the resistance level at 0.8950. It should be noted that the resistance level has already been tested: the market would test it again and possibly breach it to the upside.

GBPUSD
Dominant bias: Bearish
It has been noted that the GBP has been weak against some major currencies, so it is not a surprise that it has assumed a bearish outlook against the USD. The previous flat movement in the price has resulted in a bearish run. The market is now trading below the distribution territory at 1.6600, which means that the price could go towards the accumulation territory at 1.6500. This is our target for the week.

USDJPY
Dominant bias: Bullish
Since March 21, a bullish run has been expected in the market. This market really went up and tested the supply level at 104.00 rigorously, but it failed to slash it to the upside and close above it. Historically, the bullish signal could go on till the April 10, 2014. Right now, there is a bearish correction in the chart. The correction would be seen as a good chance to buy long, provided it does not push the price below the demand level at 103.00.  

EURJPY
Dominant bias: Bullish  
Just as the USDJPY and other JPY pairs are doing, this cross has generally been bullish. The possibility of corrections cannot be ruled out; for prices do not move in straight lines. However, the current southward correction in the market is strong enough to threaten the established bullish bias. The bullish bias is deemed to be valid as long as the price is able to stay above the demand zone at 141.00.

This forecast is concluded with the quote below:
                               


“Have you noticed that the hardest trades to take emotionally often turn out to be the best trades?” – Sam Seiden


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


The default minimum deposit amounts are: $100 for Micro accounts, $500 for Pro-Managed accounts, and $2,000 for Pro accounts However, an optional "suggested deposit amount" parameter may be used.