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Sunday, August 31, 2014

Daily analysis of major pairs for September 1, 2014

The USD/CHF has been able to stay above the support level at 0.9150. In fact, the price is now trading upwards, going towards the resistance level at 0.9200. That is the target for this week.

EUR/USD:  With the clean Bearish Confirmation Pattern in the market, this pair has the potential to move further southward. One reason for this is the palpable weakness in the Euro. The price may go further south, testing the support line at 1.3100. The outlook for this week is generally bearish.


USD/CHF: The USD/CHF has been able to stay above the support level at 0.9150. In fact, the price is now trading upwards, going towards the resistance level at 0.9200. That is the target for this week.

GBP/USD: The GBP/USD is still caught in its consolidation to the upside. The GBP is not as weak as the EUR and therefore, the Cable seems poised for an exponential breakout that may favor buyers. This can result in a long-term uptrend and it would materialize as soon as the price crosses the distribution territory at 1.6650 to the upside.

USD/JPY:  This pair is also trending upwards and it may reach the supply level at 104.50 this week. On Friday, August 29, 2014, the price closed at 104.08. This close was slightly above the demand level at 104.00, and the price may go further downwards from there. The market is presently strong.

EUR/JPY:  There is no question about it: the bearish signal that was generated last week on this cross is still valid. The validity holds in spite of the visible volatility in the market. The price may go more bearish and test the demand zones at 136.50 and 136.00 respectively. 

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group





Thursday, August 28, 2014

Weekly Trading Forecasts on Major Pairs (September 1 - 5, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish  
This pair is still currently bearish, but it is forming a base. A base is a kind of consolidation that precedes a breakout. With more weakness in the Euro, the price could reach the support lines at 1.3100 and 1.3050. Meanwhile, any rallies along the way might be contained at the resistance lines of 1.3250 and 1.3300. Any movement above the resistance line at 1.3300 would mean the end of the bearish bias, especially when the price closes above the line.   

USDCHF
Dominant bias: Bullish   
This pair is still currently bullish, but it is highly volatile. With more strength in the USD, the price could reach the resistance levels at 0.9200 and 0.9250. This is not what the bulls would find very easy to achieve, however. Meanwhile, any pullbacks along the way might be contained at the support levels of 0.9100 and 0.9050. Any movement below the support level at 0.9050 would mean the end of the bullish bias, especially when the price closes below that level.  

GBPUSD
Dominant bias: Bearish  
The Cable is also forming a base – and thus a breakout is normally expected. This week, the market (whose bias is still logically bearish) has not gone downwards significantly. In fact, the market has been consolidating to the upside. The price could go further downwards, testing the accumulation territories at 1.6550 and 1.6500. Possible rallies could push the price upwards to the distribution territories at 1.6650 and 1.6700. Should the price close above the distribution territory at 1.6700, it would mean a clean bullish signal.

USDJPY
Dominant bias: Bullish
This currency trading instrument has not been able to move upwards significantly recently. In fact, the bears are threatening the situation, which has already become precarious. Nevertheless, the price ought to breach the demand level at 103.00 before the bullish bias can be rendered useless. For the bullish bias to continue to be valid, the price needs to go further upwards, going towards the supply level at 104.50.

EURJPY
Dominant bias: Bearish  
The weakness in the Euro as compared to the strength in the Yen has forced this cross to form a Bearish Confirmation Pattern in the market. It may be possible that the Euro would be strong somewhere else, but as long as the JPY is stronger than it, the confirmed bearish outlook may continue to hold, taking the price towards the demand zone at 136.00    

This forecast is concluded with the quote below:

“Forex offers a level playing field for a wide variety of market participants — be it newbies or veterans, small or large accounts, full-time or part-time traders. Forex allows you to choose what fits you best: your time of the day, your preferred holding period, your trading style, your account size and your leverage.” - Gabriel Grammatidis




Wednesday, August 27, 2014

Monthly Technical Reviews on Gold and Silver (September 2014)

GOLD (XAUUSD)
Dominant Bias: Bearish
Contrary to the assumption that Gold would be bullish, its price has gone downwards significantly within the last 2 weeks. There is now a Bearish Confirmation Pattern in the market and the market can continue to be weak.  There are support levels at 1275.00 and 1265.00, which would serve as the targets for the bears, providing that the price goes further south. Meanwhile, the resistance levels at 1295.00 and 1300.00 ought to act as great barriers for any bullish rallies along the way. Any movement above those resistance levels would mean the end of the bearish outlook and the beginning of the bullish outlook – which would eventually happen in a foreseeable future.


SILVER (XAGUSD)
Dominant Bias: Bearish  
As long as Gold is bearish, Silver would be bearish. When Gold becomes bullish, Silver also would be pulled northwards. Right now, Silver is bearish and the bias is very strong. In fact, any rallies in the market proffer opportunities to sell short. However, this bias is not going to last forever.  While more weakness can cause the price to test the demand levels at 19.2000 and 19.0000, the supply levels at 19.7000 and 19.9000 should contain any attempts by the bulls to push the price upwards. Any movement above those supply levels would mean the end of the bearish outlook. Currently, the market is forming a base and there should be a breakout soon.  

  
Learn from the Generals of the Markets: Market Generals



Tuesday, August 26, 2014

Monthly Forecast on Gulf Keystone (September 2014)

GULF KEYSTONE SHARES RALLY

The shares (LSE:GKP) were trending downwards till the early part of August 2014. That was when the price hit a rock bottom around the demand level at 60.00. After this, the price begins to rally – something that is still valid up till now.

In the chart, the price broke above the upper Trendline, going further upwards. From its oversold territory, the RSI period 14 has gone above the level 50. This shows the determination of the bulls to push the price higher. The market is supposed to continue rallying for the next several weeks, perhaps reaching the supply levels at 110 and 120 consecutively.

Those who missed the bullish breakout on Gulf Keystone may want to buy a pullback. When one misses an entry signal, one may wait for the price to come back to the level where one would prefer to enter.  Some positions may be smoothed in a trendless phase of the price journey. A trendless market ought not to be traded.

We ensure that we want to trade the correct instrument in a correct market condition, or else, we may be adversely affected.  

This forecast is ended by the quote below:

“You don’t have to make trades all the time. The big winners will come and when they do you need to have all your cash available. I think that’s what I would do differently – trade less and be more patient and wait for the best setups.” – Dan Zanger

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals

Keep on Selling Tesco Shares!

Tesco stock (LSE:TSCO) has been dropping like a stone for most of this year, although the price has kind of consolidated around the months of April, May and June 2014. Since then, the price has broken out to the downside, trending south. This southward trend is likely to continue.

Here, we use 4 EMAs. 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. As you can see, the EMAs are all sloping downwards, confirming the helplessness of the bulls. The EMAs 50 and 200 are great barriers to any rallies that may occur on the way down. Any rally into the EMAs 20 or 50 would mean another great shorting opportunity. As the price retraces, one may need to look out for the time when the price goes into an equilibrium phase. This is the area where another breakout may occur.

Tesco stock price may go down further, reaching the accumulation territories at 240.00 and 230.00 respectively.  When one determines the dominant bias on a big time horizon, one may then want to look for specific entry points on smaller time horizons.

This forecast is ended by the quote below:

“I find that taking a break from trading makes it difficult to get back into the trading mindset. While I do take breaks, sometimes vacations, when I am actively trading I prefer to keep my mind on trading, including writing, blogging, and interacting with other traders through social media.” – Chris Ebert

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Monday, August 25, 2014

Gap Trading Signals (August 25 – September 8, 2014)

Note: All the trades below were entered on August 25, 2014. If you’d trade the signals, they mustn’t be entered not later than 7.00 AM GMT on August 26, 2014.  

Gap trading offers unique trading opportunities when they happen on hourly charts and on many currency pairs and crosses simultaneously. In the year 2011, there were constant gap-ups and gap-downs in the currency markets, which brought great trading opportunities. In the year 2013, gaps were a curiosity at the open of the markets on Mondays. The gaps that occurred at the open of the markets this week brought about some trading signals that have the potential of over 45% accuracy. Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. With an RRR of 1:2, we’ve a satisfactory chance of survival.

Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. The trading duration is 2 weeks. The breakeven stop is set after about 70-pip profit is made. A trailing stop of 100 pips is set after over 170 pips have been gained.

Gap Signals
EURUSD = Buy
GBPUSD = Buy
USDCHF = Sell
USDJPY = Sell
USDCAD = Buy
AUDUSD = Buy
NZDUSD = Sell
EURGBP = Sell
EURCAD = Buy
GBPCHF = Sell
CADCHF = Sell
NZDCAD = Buy
AUDNZD = Buy
AUDCHF = Sell
NZDCHF = Sell

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


Learn from the Generals of the Markets: Market Generals

Sunday, August 24, 2014

Daily analysis of major pairs for August 25, 2014

The USD/JPY has already tested the supply level at 104.00. Should that supply level gets breached to the upside, the next target in the chart would be the supply level at 104.50.     

EUR/USD:  This pair has been able to continue its southward journey. As it was accurately forecasted, the last rally in the market proffered a short-selling opportunity. On Friday, August 22, 2014, the price closed at 1.3239. The price is now trading below the resistance line at 1.3250; it might reach the support line at 1.3200 this week.


USD/CHF: This pair has been able to continue its northward journey. As it was accurately forecasted, the last dip in the market proffered an opportunity to go long. The resistance level at 0.9150 has already been tested, and with renewed effort from the bulls, the price may close above that resistance level and go further upwards to another resistance level at 0.9200.

GBP/USD: This is a weak market, and the price has been able to stay below the distribution territory at 1.6600. Following the current pause in the trending move, the price may test the accumulation territory at 1.6550.

USD/JPY:  The USD/JPY has already tested the supply level at 104.00. Should that supply level gets breached to the upside, the next target in the chart would be the supply level at 104.50.  Right now, the Bullish Confirmation Pattern in the market is very strong, and therefore, short trades are currently not logical here.   

EUR/JPY: This market is a bull market – as long as the price stays above the demand zone at 137.00. There is a bearish retracement in the market but it is likely that the price would turn upwards and test the supply zone at 138.00.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group




Thursday, August 21, 2014

Weekly Trading Forecasts on Major Pairs (August 25 - 29, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish  
This pair has been able to maintain its bearish bias. In this kind of market, any rallies would proffer opportunities to sell short. Therefore, the current rally may be another short-selling opportunity, provided that it does not go above the resistance line at 1.3350. Any movement above that resistance line would mean the end of the bearish bias. Should the bearish journey continue, the price may reach the support line at 1.3200.  

USDCHF
Dominant bias: Bullish   
As it was expected – at least as a mandatory condition for the continuation of the extant bullish trend on the USD/CHF – the support level at 0.9100 has been breached successfully. After the breach to the upside, the price closed above that level, going further upwards. The price needs to break the resistance level at 0.9150 to the upside, or at least, test it, as the bullish journey continues. Now, the support level at 0.9100 has become a great barrier to any bearish pulls along the way.     

GBPUSD
Dominant bias: Bearish  
Since the middle of July 2014, the Cable has dropped by over 550 pips. It is clear that the trend-following sellers would have made huge gains while those who go against the trend would have suffered adverse consequences. There is still a Bearish Confirmation Pattern on the Cable, and so, long trades are not yet sensible. A trend is not over until it is actually over. It is possible that the price would reach the accumulation territories at 1.6650 and 1.6600 within the next several trading days. However, this would not happen without challenges from the bulls. The bullish challenges may be contained at the distribution territories at 1.6700 and 1.6750.

USDJPY
Dominant bias: Bullish
There is now an established northward outlook on this currency trading instrument. The price was able to break the demand level at 103.00 to the upside, going towards the supply level at 104.00. The supply level at 104.50 could be the target for the next week.  

EURJPY
Dominant bias: Bullish  
The Euro is a weak currency and the Yen is also a weak currency. But in this scenario, the Yen is weaker than the Euro; thus the current bullish breakout, which has now been sustained. In fact, all the JPY pairs are bullish and the EUR/JPY pair is no exception. After the supply zone at 138.00 is tested and broken to the upside, the price may target another supply zone at 139.00.    

This forecast is concluded with the quote below:
“My good trades not only pay for my bad trades, but also put food on the table.” – Chris Ebert




The Most Important FACTOR Behind Traders’ Failure – Part 1

“No methodology will work unless you are able to develop the proper mindset to follow it.” – Dave Landry

The world of trading is full of things that work and things that don’t work. To be honest, there are many successful traders who’re also teaching people how to become successful. There are many signals providers who provide winning signals. There are many strategies that work and there are many programs, like webinars and trading rooms which can help other traders to improve significantly. Unfortunately, in spite of these, the percentage of losers still remains above 90%. Why?

There is a primary reason for that (other reasons are merely secondary). The human mind isn’t wired to trade properly – unless the mind is trained to adapt to the seemingly ‘strange’ but helpful approaches that guarantee one’s survival. We don’t find it easy to do the things that can ensure our permanent triumph. What we find easy to do are things that agree with our faulty mindset, but which can’t help us in the long run. If you can’t ride your winners, it’s because your mindset is against that, and you’ll always find it difficult to do. Even if a swing trading system has a high hit rate, it won’t make money if profits aren’t allowed to run.

For instance, most motorists obey traffic rules because they want to avoid the legal consequences for not doing so, not because they take their own safety serious. Why should the use of helmet be enforced for bikers? Don’t they know that the use of helmet is for their own safety? They know, but they still find it easier not to put on helmet than to put on one. That’s human mindset.

It’s known that making phone calls or receiving phone calls while driving is dangerous (for the brain of a driver who does that doesn’t fare better than the brain of a drunkard, at that time), yet some drivers find it a fanciful and agreeable thing to do.

I once chattered at taxi. While the driver was driving me, his phone began to ring consistently. He sensed that the call was very important, and as a result of that, he located a suitable place to park. He parked and received the call. After that, he continued the journey. What the man did might look stupid in the eyes of most drivers. How could he begin to look for a place to park simply because he wanted to receive a mere call? In contrast, most drivers would prefer to answer the call while driving – the thought of tickets being the only thing that can prevent them from doing that. 

In the world of retail trading where retail traders are allowed to trade as they like, it’s no wonder that they often end up losing. Even if they know what they can do to safeguard their accounts in the face of the vagaries of the markets, they’re prone to ignore that because of irrational emotions. If retail traders could be forced and micromanaged to do the right things while trading, the percentage of losers would decrease dramatically, but such a thing isn’t possible.

For example, false breakouts are common in consolidating market phases, and trading them would have adverse effects on our portfolios if we’re invested for the long-term. You may’ve sworn never to trade a consolidating market, but because of the faulty mindset, you suddenly open a position in a consolidating market because you feel the position is promising. You’ve sworn to respect your stops, but you suddenly see yourself running a gargantuan negative position. Obviously, you’ve refused to smooth the position because you feel it may go back to the entry price.

When institutional traders cover their positions, the market pulls back, but the noobs think they can follow the direction of the pullback.  When you see a significant bias that occurs without plausible economic reasons, the bias can be transitory and the pullback might even be a new protracted market outlook. You’ve sworn to be a swing trader or position trader, opening a few trades per month or week, but you suddenly start scalping or opening too many positions that you close within 24 hours because of too much negativity. You call yourself a position trader or an investor, but you suddenly find yourself watching the one-minute chart because you can’t sleep while you’ve open positions. You know, a position trader got nothing to do with one-minute charts. You think new significant biases may start and you want to be an early bird by looking at one-minute charts.

You’re swing/position trader, and thus you need to use wide stops so that you can create more room for normal market fluctuations. But you find yourself using stops that are too tight: you don’t want to allow a trade to move against you by a few or several pips and you call yourself a position trader! Tights stops cause frequent losses – even trades that ought to end up winning would be stopped out if the stops are too tight.

Doing the right things require discipline, even if it makes you look stupid sometimes. You’ve got to find a way to condition your mind to do the right things; no matter what. That’s what pays in the long run. It’s better to look for ways to control losing streaks than to look for ‘wise’ trading rules that don’t improve any statistics. This is what’ll ultimately help you by making you avoid severe roll-downs. It’s after you survive severe roll-downs that you can hope to make some gains. 

This article is ended with the quote below:

“One thing is sure: a trading strategy that is not adapted to the traders individual preferences concerning philosophy, trading frequency or time exposure will not generate profits simply because it will not be followed.” – David Pieper


Learn from the Generals of the Markets: Market Generals


Wednesday, August 20, 2014

There Is a Sudden Bearish Confirmation Signal on Kea Petroleum

The bullish attempt on Kea Petroleum stock (LSE:KEA) came to an abrupt end as the price gaps down massively. This has led to a new Bearish Confirmation Pattern in the chart.

Following the strong gap-down, the ADX period 14 goes towards the level 50, showing that the current bias is strong. The DM- just crossed the DM+ upwards, meaning that the bears now have upper hands. Also, the MACD (default parameters) has just had both its histogram and signal lines below the zero line. To be precise, the signals lines are just crossing the zero line downwards. This is Bearish Conformation Pattern in the chart and a southward journey should resume from here.

Gap-downs or gap-ups that render the existing bias useless are no longer a curiosity. They happen now and then. To be honest, seasonality signals come repeatedly because of the constant habits of those who move the price. When you see a particular trading setup repeatedly, it means that market makers have left their footprints in the chart.

Kea Petroleum stock may continue moving further downwards, and we want to speculate only on the market that is prone to continue moving in a direction. Should a movement stall, we would not like to speculate.

This forecast is ended by the quote below:

“The more opportunities you have to trade your profitable system, the more money it’ll give you.” –Alvaro Echeverri 

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


Long-term Sellers of Maple Energy Continue to Gain Huge Profits

Maple Energy shares (LSE:MPLE) have been in a long-term bearish trend. Short-term sellers have made huge gains and would continue to make more money as the bearish trend continues.

The EMA 21 shows that the market is in a long-term downtrend, while the Williams’ % Range has perpetually been in the oversold territory. This has been going on for many months and there is no end in sight. Any rallies only give new sellers more opportunities to join the ride to the south. Right now, the price is under the EMA 21 – a renewed ‘sell’ signal. The price could reach the demand levels at 5.000 and 4.500.

Short-term trades may also want to join the market during trending movement and smooth their positions when the market stalls. Trading instruments do not move all the time, and therefore, we would want to stop trading when there is no movement. Impatient traders can thus be forced to trade a trendless market, simply because they are desperate for quick profits. Being patient is one of the greatest factors that contribute to ultimate success. When we follow the lines of the least resistance, we would do ourselves favor by staying away from the markets that do not show clear trading opportunities.

This forecast is ended by the quote below:

 “You must risk money to make money…You cannot possibly make profits in the markets unless you put up the money.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals





Sunday, August 17, 2014

Daily analysis of major pairs for August 18, 2014

Rather than going upwards, the USD/CHF broke below the resistance level at 0.9050. This has resulted in a clean ‘sell’ signal, and a movement below the support level at 0.9000 would mean the total end of the bullish bias.   

EUR/USD:  Since the strong support line at 1.3350 was tested several times last week, and the market has been unable to go downwards, it looks like the market has formed a base. It has begun to consolidate to the upside, but there is a challenge at the resistance line of 1.3400. For a ‘buy’ signal to make sense, the resistance level must be broken to the upside as the price journeys northwards. One may wait until this condition is met before taking a position.  

USD/CHF: Rather than going upwards, the USD/CHF broke below the resistance level at 0.9050. This has resulted in a clean ‘sell’ signal, and a movement below the support level at 0.9000 would mean the total end of the bullish bias. There is already a Bearish Confirmation Pattern in the chart - long trades are no longer logical.

GBP/USD: There is another short-term base on the Cable, as it fails to continue going downwards. This is the prognosis for the week: A break below the accumulation territory at 1.6650 would means the bearish trend would continue, and a break above the distribution territory at 1.6800 would mean the beginning of another bullish outlook.

USD/JPY:  Here, the bears battered the bulls on Friday and the price went downwards. However, the bullish bias could still be considered valid as long as the price stays above the demand level at 102.00

EUR/JPY: The event affecting the Euro is showing the possibility that it may gain some stamina. This cross closed at 137.15 on Friday, August 15, 2014. This is on a bullish note, which is rational as long as the price is above the demand zone at 136.50.  

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Friday, August 15, 2014

Premium Signals on Gold and Silver (August 15 – November 25, 2014)

Instrument: XAUUSD
Order: Buy
Entry date: August 15, 2014
Entry price: 1313.73
Stop loss: 1293.32
Take profit: 1373.32

Instrument: XAGUSD
Order: Buy
Entry date: August 15, 2014
Entry price: 19.9263
Stop loss: 19.7083
Take profit: 20.5083


NB: 2% per trade is risked. All open trades are closed after the duration of the signals has expired. A breakeven stop is used after a 140-pip gain and a trailing stop of 150 pips is used after a gain of 300 pips.

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


Learn from the Generals of the Markets: Market Generals


Weekly Trading Forecasts on Major Pairs (August 18 - 22, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish  
This pair has continued to be weak, though the southward movement has been limited so far. In fact, there is a constant struggle between the bull and the bear, which has resulted in a high volatility. The resistance line at 1.3400 has been battered a few times (bearing the brunt of the struggle in the market). While the possibility of a serious rally holds, the pair could still go further downwards, reaching the strong support line at 1.3300. In the meantime, a stronger bearish bias is needed to break the tough support line at 1.3350 to the downside.  

USDCHF
Dominant bias: Bullish   
On the USDCHF, there is a great support level at 0.9000 and a formidable resistance level at 0.9100. The price presently hovers between the two market levels, while the resistance level at 0.9100 faces more challenge from the buyers. This resistance level was tested several times between August 5 and 7, 2014: it was also tested this week. The price is supposed to go upwards again to test the resistance level. The resistance level ought to be broken to the upside as the bullish trend continues. On the other hand, a movement below the support level at 0.9000 would mean the end of the bullish outlook.    

GBPUSD
Dominant bias: Bearish  
This currency trading instrument is weak, and the weakness has started since the middle of July 2014. The price has dropped by about 500 pips since then. This week alone, the price has dropped by over 100 pips. There could be another movement to the downside, which could take the price towards the accumulation territories at 1.6650 and 1.6600. Any rallies in the price should be short-term: they should be contained at the distribution territories at 1.6800 and 1.6850.  

USDJPY
Dominant bias: Bullish
Since the JPY is weaker than the USD, it is not a surprise that this pair has been going upwards in a slow and steady manner. In fact, there is a Bullish Confirmation Pattern in the chart, and the price could go on towards the supply level at 103.00 within the next several trading days.

EURJPY
Dominant bias: Bearish  
The bearish outlook on this cross is now under a threat - any journey above the supply zone at 137.50 would mean the beginning of a new bullish outlook and the end of the current bearish outlook. But as long as the price cannot break the aforementioned supply zone to the upside, the bearish bias would be rational.   

This forecast is concluded with the quote below:

“Cut short your losses; let your profits run on.” – David Ricardo (1772 - 1823)  



Learn from the Generals of the Markets: Market Generals

Thursday, August 14, 2014

What You Need to Know about Strategies Accuracy

“Markets change continuously. Therefore, I am constantly searching for trading setups that may improve my trading.” – Christian Lukas

One of the most important aspects of a strategy is its accuracy percentage. High accuracy is more preferable than low accuracy, although it must be coupled with positive expectancy. A trader whose strategy is only 25% accurate can end up winning if she/he uses an RRR of 1:5, small sizes and run their profits. This is something that requires maturity and patience. On the other hand, a trader whose strategy is 75%+ accuracy can end up blowing his portfolio when she/he uses a worse expectancy like risking $20 to gain $2, doesn’t use stops, runs losses indefinitely and uses big sizes.

Having said this, why would most traders still find trading so challenging despite the fact that they use stops and optimal lot sizes? The answers are not far-fetched.

You need to know that the position sizes for huge portfolios aren’t the same as the position sizes for small portfolios. Traders who speculate on small accounts would be frustrated when they try to follow the trend. Trend-following is good, but it requires patience, discipline and ability to handle long losing periods. That’s why it’s better done on huge portfolios. The overall accuracy of strategies that follow the line of the least resistance is so low, especially now that false breakouts are no longer a curiosity and sustained trending moves are rather rare. Such are today’s markets. 

The retail trader finds it difficult to increase their portfolio balance because they use strategies that have low accuracy in most cases. One way to drastically reduce the difficulty is to look for ways to increase your strategy accuracy. Accuracy of 40-50% is certainly better than an accuracy of 25-35%.

This is a fact of trading: When your accuracy is high, it would be easier for you to recover your losses and move ahead. When your accuracy is low, recovery of losses would be more difficult. The wider a take profit level is, as compared to a stop loss level, the more difficult it would be for the take profit level to be hit.   The tighter a take profit level is, as compared to a stop loss level, the easier it would be for the take profit level to be hit.  A tighter take profit level makes sense when strategy accuracy is high, because the stop loss level would even be tighter and the positive expectancy incorporated into the system would be rational.  

This is another fact: The higher the accuracy of a system, the less frequent and the more fleeting its losing periods would be. The lower the accuracy of a system, the more frequent and the more protracted its losing periods would be. A trading method whose accuracy is 30% will usually lose more than 20 trades in a row when a losing period materializes; whereas a trading method whose accuracy is about 50% will usually lose less than 15 trades when a losing period materializes. The higher the accuracy, the fewer the losses in a losing period.

We tend to gain money in markets, but we give some of it back during a losing period. Someone says it’s not easy to keep money that’s made from the markets. By letting profits run and hoping for a target to be hit, we sometimes end giving back some of our profits, but we want to give back as little as possible. We do this by using small lot sizes, increasing our accuracy, using a rational RRR that’s commensurate with the rate of accuracy, and temporarily stop trading after a weekly or monthly drawdown limit has been reached.

Conclusion: The retail trader would do well to look for a strategy that has a higher accuracy, so that the trading experience can be easier and losing periods reduced and more short-lived. Please learn from your past mistakes and adjust your trading style accordingly. When a good football team gets defeated, they learn a lesson. When they win, they also learn a lesson. This is one of the factors that improve their performances in spite of recent failures. This is also true of trading.

This article is ended with the quote below:

“I have traded now for 13 years and I still have yet to have a year where my winning percentage is over 50 per cent. I posted a 100 trade experiment in 2008 where my win/loss was 48.32 per cent yet the account grew 57.47 per cent.” – Adam Jowett


Learn from the Generals of the Markets: Market Generals


Tuesday, August 12, 2014

Regency Mines - Buyers Offload Their Positions in a Hurry

Regency Mines stock (LSE:RGM) has nosedived again while the major bias remains bearish. This means that the market has a high probability of going further south as the chart shows. Because of this, sane buyers offload their positions in a hurry.

4 EMAs are used and they are EMAs 10, 20, 50 and 200. The color that stands for each EMA is show in the top left part of the chart. The EMA 200 shows that the overall bias in the market is bearish. Even, a Golden Cross attempt was rejected last month, and this caused buyers to panic. Those who went long when the EMAs 10, 20 and 50 were sloping upwards had to smooth their positions in a hurry as the price gapped down recently. After all, the movement so far this month has been bearish.

This is a weak market and it would be prudent to short the stock and control the risk. While risk control prevents your portfolios from huge drawdowns, it is courageous prognoses that would make your rich. With a few more days of southward journey, the EMAs 10, 20 and 50 would confirm the ‘sell’ signal: the price may reach the support levels at 0.270 and 0.250 within the next few weeks or months.

This forecast is ended by the quote below:

Your investment process is the tool that keeps you on track, making good decisions and avoiding bad ones.” – Bruce Bower

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


President Energy: Price is ready to break out to the downside

President Energy shares (LSE:PPC) may lose more of their value when the price breaks out and go further south. The market has been very choppy and volatile lately, plus the logical thing to do right now is to seek short trades.

Since last month, July 2014, the price has been coming down, going through very turbulent waters as the bulls and the bears continue to struggle. The bears have upper hands. In the chart, short orders would make more sense as soon as the price breaks below the lower Trendline. The RSI period 14 is still below the level 50, supporting a possible bearish run.

This is the type of market in which sellers make money. Many people think that money is being lost when the market goes downwards, but this is not true. No money is lost in bear markets; it just changes hands.

This forecast is ended by the quote below:

“Study the successful people in your field so your own views on the markets will be verified and validated.” – Louise Bedford

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


Sunday, August 10, 2014

Premium Signals on the EUR Pairs (August 11 – September 5, 2014)

Instrument: EURJPY
Order: Sell
Entry date: August 11, 2014
Entry price: 136.885
Stop loss: 137.902
Take profit: 136.939

Instrument: EURAUD
Order: Sell
Entry date: August 11, 2014
Entry price: 1.44525
Stop loss: 1.45556
Take profit: 1.44537

Instrument: EURCAD
Order: Sell
Entry date: August 11, 2014
Entry price: 1.47040
Stop loss: 1.48070
Take profit: 1.45070

Instrument: EURCHF
Order: Sell
Entry date: August 11, 2014
Entry price: 1.21418
Stop loss: 1.22443
Take profit: 1.19443

Instrument: EURGBP
Order: Sell
Entry date: August 11, 2014
Entry price: 1.79896
Stop loss: 1.80915
Take profit: 1.77915

Instrument: EURUSD
Order: Sell
Entry date: August 11, 2014
Entry price: 1.34041
Stop loss: 1.35054
Take profit: 1.32054

Instrument: EURNZD
Order: Sell
Entry date: August 11, 2014
Entry price: 1.58430
Stop loss: 1.59472
Take profit: 1.56472


NB: 1% per trade is risked. All open trades are closed after the duration of the signals has expired. A breakeven stop is used after a 70-pip gain and a trailing stop of 100 pips is used after a gain of 170 pips.

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


Learn from the Generals of the Markets: Market Generals

Daily analysis of major pairs for August 11, 2014

The USD/CHF closed at 0.9055 on Friday (August 8, 2014). This pair is having a serious difficulty breaking the resistance level 0.9100 to the upside. In fact, the price has dropped by about 50 pips since the resistance level was challenged.

EUR/USD:  On this pair, there has been a rally in the context of a downtrend. This gives a clean opportunity for a renewed short trade, which could take the price further south. The price may test the support line at 1.3350 again: it may even break it to the downside and close below it.


USD/CHF: The USD/CHF closed at 0.9055 on Friday (August 8, 2014). This pair is having a serious difficulty breaking the resistance level at 0.9100 to the upside. In fact, the price has dropped by about 50 pips since the resistance level was challenged. The price needs to go upwards again to test the resistance level so as to allow for the continuation of the uptrend. Otherwise, the trend could turn bearish, especially when the price crosses the support level at 0.9000 to the downside and closes below it.

GBP/USD:  The Cable dropped by around 70 pips last week – in spite of some desperate effort by the bulls to push the price upwards. The pushing of the price upwards resulted in a nice short-selling signal, which has now dragged the price below the distribution territory at 1.6800. The next target in the market is at the accumulation territory of 1.6750.

USD/JPY:  Despite the volatility in the market, this currency trading instrument remains bearish. There is a Bearish Confirmation Pattern in the chart, and the price could go further south, till it reaches the demand level at 101.50.

EUR/JPY:  The rally on the EUR/JPY should be transient, especially for the current bearish outlook to be valid. Any movement above the supply zone at 137.50 could render the bearish outlook useless.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Thursday, August 7, 2014

Weekly Trading Forecasts on Major Pairs (August 11 - 15, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish  
This pair has been able to continue its slow and steady journey downwards so far. There are occasional shallow rallies in the market – which often lead to renewed ‘sell’ signals. The Euro is very weak right now and the market has a high probability of remaining bearish next week (even in this month of August 2014). Yes, the probability that the market would remain bearish is far higher than the probability that it would turn seriously bullish. The market could become seriously bullish within the next several trading days, but the possibility of this happening is far less than the possibility of the market remaining bearish. A trend is not over until it is actually over.   

USDCHF
Dominant bias: Bullish   
What could happen next to the USD/CHF? Since the pair is in a negative correlation to the EUR/USD, it would go upwards as the latter goes downwards. The possibility of the continuation of the uptrend is very high, but there is an impediment to be overcome: the great resistance level at 0.9100. Just like the support level at 0.9000 - which gave the bulls extremely tough time before it was finally breached - the resistance level at 0.9100 is another barrier.  However, the barrier must be broken to the upside for the bullish bias to continue, even if it is going to be a pyrrhic victory. The support level at 0.9000 itself is a great barrier to the bears’ interest, for the bear that tries it now could well be hurtling itself against a rock.

GBPUSD
Dominant bias: Bearish  
The Cable is positively correlated with the EUR/USD, and thus should also continue trading downwards, unless there is an unexpected event which catapults the price skywards. There is a Bearish Confirmation Pattern in the market. The price could reach the accumulation territories at 1.6800 and 1.6750 sooner or later.

USDJPY
Dominant bias: Bearish  
The USD may be strong somewhere else, but not with the JPY. In fact, most JPY pairs are bearish and the USD/JPY is no different. There is a ‘sell’ signal in the market, for the price could go on towards the demand level at 101.50. The supply level at 103.00 should check any serious bullish breakouts (for the bearish outlook could be rendered useless when it happens that the supply level is challenged).   

EURJPY
Dominant bias: Bearish  
As a result of the weakness in the Euro and the stamina in the Yen, this cross has become very weak. Long trades are no longer sensible here, for the price could reach the demand levels at 136.00 and 135.50 next week.    

This forecast is concluded with the quote below:

“Trading is a joy to me and I do not get half as stressed as I used to do.”  - Stu Whisson




Learn from the Generals of the Markets: Market Generals

Maria Boyazny: An Influential Female Trader

LEARN FROM THE GENERALS OF THE MARKETS - PART 51

“You need to be comfortable with the level of risk you are taking when you trade.” – Stuart McPhee

Maria Boyazny is the Founder and Chief Executive Officer of MB Global Partners, which is based in New York. MB Global Partners is an asset management firm which focuses on the credit and special situations markets.

Maria earned a degree in Economics – with a concentration in Finance and minor in Mathematics (University of Pennsylvania). She later earned her MBA from Columbia University. She worked as a portfolio manager/managing director at Siguler Guff & Co. In addition, she’s authored some books, spoken at conferences, and also been a guest speaker at Fox Business, CNN, Bloomberg TV, etc.

Maria has taken part in many prestigious professional career and activities that distinguish her as a highly sought expert in the trading world. Her investment strategies are unique as well as effective. She makes consistent profits for her clients. Because of this, she’s been recognized as one of the top five most influential women in hedge funds, among other accolades. Her firm’s official website is: Mbglobalpartners.com.

Lessons
Here are some of what you can learn from Maria Boyazny:

  1. The global markets are inefficient – in contrast to what some pundits believe. An individual trader/fund manager with decades of experience is a living testimony that the global capital markets are really inefficient.

  1. When you master the art of trading and the simple principles of everlasting success become your second nature, you’ll find yourself trading effortlessly and making money. Maria trades without flinching and with the quiet confidence of somebody who knows what she’s doing, what the markets are doing and how to take advantage of them. One person wrote that, for Maria, trading is as natural and effortless as breathing. She’s reached a level at which she can no longer be swayed by market noises or fear of the future. Professional traders have reached that stage and you can reach it too.

  1. Managing over $4,500,000,000 for her clients, Maria’s realized sizable returns for them. Because she’s able to do a simple thing: she makes consistent returns no matter what the markets are doing.  The markets that slice the gamblers up are the markets that bring great profits to the pros. It doesn’t matter whether the markets go up or down; what matters is that you can harness gains from them no matter where they go. It’s reported that many people lost their socks, shorts, shirts, sweats, homes, marriages and lives during the recent global financial crisis. However, astute traders like Maria identified this crisis early enough and make lots of money from it. You see, what brings loss for some is also what brings profit for others.  For traders who know what they’re doing, the trading business is really recession-proof.

  1. It’s crucial to know how to pinpoint good trade setups and how to exit your orders properly. Please look for ways to know when to enter and when to exit.

Conclusion: When we win, we mayn’t learn any lessons. But when we lose, we learn valuable lessons that potentially make us better traders. You see, Smart Money has effective trading/investment rules that give them ‘unfair’ advantage over many other traders.

This piece is ended with a quote from Maria Boyazny:

“Many of the liquid credit assets such as high yield, might have a bit of room to run but overall are overpriced and investors need a gradual exit plan.”



 Learn from the Generals of the Markets: Market Generals

Wednesday, August 6, 2014

Roxi Petroleum Goes Upwards… BUY

Roxi Petroleum shares (LSE:RXP) are very strong right now, having broken upwards and having resumed a bullish journey since last month. This bullish bias has also continued this month… and this is just the beginning.

In the chart, the ADX period 14 is above the level 50, going towards the level 60. This signifies a very strong movement in the market. The ADX DM+ is above the DM-, meaning that the bulls are currently victorious. This is a buy signal. The MACD (default parameters) has both its histogram and signal lines above the zero line; another buy signal confirmation. This is a Bullish Confirmation Pattern in the chart.

The price may go upwards within the next several months, reaching the supply levels at 19.00 and 20.00. By riding the trend, our portfolios enjoy gradual percentage increase. Be aware that success in trading comes gradually, being a marathon, not a sprint.

This forecast is ended by the quote below:

“One of my strengths is to be able to delay rewards. This is very positive for trading.” – Julian Komar

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


Afren Gaps Down Massively – SELL

Afren stock (LSE:AFR) has now become hopeless against the bears. The price gapped down massively recently, rendering any bullish hope and outlook useless.

The market was in a tight consolidation – a cutthroat struggle between the bulls and the bears – for a few months. But at the end of July/beginning of August, 2014, the market gapped downwards significantly. This is a serious breakout in the direction of sellers. The price is currently below the EMA 21 and the Williams’ % Range period 20 is now in the oversold territory. Once again, the market is weak and it is supposed to go further south.  

Conclusion: Afren stock is supposed to continue going lower and lower, reaching the support levels at 96.0 and 95.0; although there could be transitory rallies during the journey. No long trades would be sought in this market until there is a Bullish Confirmation Pattern in the market. If you are misled by a spurious signal to go long, it would be OK as long as the sustained negativity would be far less when compared to the positivity that has been sustained in this bear market. Although trading is a skill that could be learned by all, not everyone would be disciplined enough to do what it takes to be victorious.

This forecast is ended by the quote below:

After all, aren’t traders and investors all predators to some extent? Eat or be eaten.” – Michael Covel

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Monday, August 4, 2014

Introduction to a Market-neutral Strategy for Forex Markets

A NON-DIRECTIONAL TRADING APPROACH

“For traders and investors, finding low risk ideas is one of the most important tasks no matter what asset class you trade.” - Gabriel Grammatidis

The world of speculation is replete with strategies that are aimed at making profits. The strategies can be ones that follow the lines of the least resistance or ones that make use of mean reversion; there are many ways to skin the cat. No matter what methods we use, we’re either following the dominant biases or going against them.

Let’s face it, the reason why we invest our money in the markets is to make profits. We’d also prefer to enjoy permanent success in the markets. The sure way to achieve this is to go for small and consistent profits that become great over time, and to employ safe risk control measures that make sure that our portfolios remain intact in spite of the vagaries of the markets.

For more than a century, trading legends have made use of market-neutral strategies. A market-neutral strategy is a non-directional trading approach that enables us to harness profits from the unpredictability of the markets. An overextended bullish market can still remain more overextended: and vice versa for an overextended bearish market. Whether the market goes up or down or sideways, we end up making average gain that is much bigger than average loss.

This kind of trading approach is very popular among expert traders – it’s one of their most closely-guarded secrets. Non-directional trading approaches can be used in any types of financial markets; they can be used in Forex markets. For example, one method is to go short on both the EURUSD and the USDCHF a few hours after the open of the markets, especially when it’s observed that they’re in a trending mode. This is one effective way of making money from the negative correlation of the two pairs. Using an RRR of 1:3 enables traders to gain about two times the loss that is sustained from one trade.

A habitually choppy trading instrument would tend to remain choppy in spite of being punctuated by sustained trending moves. In the face of a sustained trending move, there would normally be occasional pullbacks. Given this, optimal stops ensure that normal market fluctuations wouldn’t stop us out quickly, nor would we experience a huge negativity on a position because of a protracted loss trade. In order to run our profits for a considerable amount of time, fairly wide stops must be put in consideration so as to make room for normal market fluctuations.

Trading Like a Market Wizard
The trading methodology that’s discussed here is the one that makes use of positively correlated pairs in Forex. It is completely NFA-compliant, and thus, it can be used by all traders the world over. The risk is low and limited. With this non-directional strategy, we consider instruments that are in positive correlation only, not the ones in negative correlation like the EURUSD versus the USDCHF. There are many examples of positively correlated instruments in Forex, but we want to watch for opportunities on those which are somewhat popular. The highly correlated pairs we’d like to use are:

EURUSD and GBPUSD
EURGBP and EURCHF
EURAUD and EURNZD
EURJPY and GBPJPY
AUDJPY and NZDJPY
AUDUSD and NZDUSD
GBPAUD and GBPNZD
AUDCAD and NZDCAD
AUDCHF and NZDCHF
Gold and Silver

Let’s consider AUDUSD and NZDUSD. Both are positively correlated, i.e. when one goes up, the other goes up, and the other way round. When one moves sideways, the other also moves sideway. Meanwhile, a good non-directional trading signal occurs when one of the highly correlated pairs goes north significantly and the other one goes south significantly. How do we know this? We put the RSI period 14, levels 70 and 30 on the 4-hour chart. When one of the two normally correlated pairs has recently gone above the level 70 (or 30) and the other one has recently gone below the level 30 (or 70), we open new orders.

We want to bet on the transitory negative correlation of a normally highly-correlated pair. We short the instrument that goes north and purchase the one that goes south.  In time, the two instruments would become positively correlated again, and that’s how we make our profits.
The only issue with this strategy is that its trading signals in Forex markets (especially on popular pairs and exotic crosses) are few and far between.

Both trades make money in 60% of cases. About 70% of cases, one trade makes less loss than profit in the other trade. Please take note that when a stop for a trading method is wide, this would make sense only if the method has a hit rate of at least 60%. A wide stop with a very low hit rate won’t improve any statistics. Combining medium-term and long-term speculative outlook enables us to close trades that quickly meet our target and at the same time, create more leeway for those that take longer time to meet our target.

Trade, Money and Risk Management
Once new orders are opened, trading becomes managerial and discretionary.  We risk only 1.5% per trade, setting our stop at 150 pips. The take profit is usually 300 pips. A breakeven stop is triggered when a trade has at least 70 pips in profits. A trailing stop of about 100 pips is triggered when the trade has at least 170-pip profit. When two open trades of a correlated pair have profits that are up to 200 pips in total, the two trades are smoothed. When the difference between a negative trade and a positive trade is at least, 200 pips in profits, the two trades are smoothed.

The duration for a positive trade is about one month. A negative trade may reverse or it would be left alone until it hits the stop (but the stop wouldn’t be widened under any circumstances). In most cases, we look for trading opportunities every Monday. We look at 4-hour charts for this purpose.

Conclusion: In addition to the JPY Pairs Pullback Trading Signals and Premium Signals on selected pairs/crosses, this Non-directional Trading Signals would be sent to our readers as soon as they’re pinpointed. This article is important in that it reveals the rationale behind the signals that would be generated with the trading approach, plus the stop, the breakeven stop, the trailing stop, risk per trade, exit possibility and trading duration. These facts won’t be repeated in coming signals – only signals would be sent. 

This article is ended by the quote below:

“If I get into a protracted drawdown, I reduce trading size until it stabilizes, or my positions start working again.” – Larry Tentarelli


Learn from the Generals of the Markets: Market Generals



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