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Wednesday, October 29, 2014

Kenneth Griffin: Another Great Mr. Trader

LEARN FROM THE GENERALS OF THE MARKETS - PART 54

“I've found that the more focused I am on trading and living a successful life, the fewer groups I actually fit into.” – Louise Bedford

Kenneth Griffin was born in 1968, Florida, USA. He’s an American trader and funds manager. He attended Boca Raton Community High School, and then Harvard University. While at the University, he began to manage some portfolios (as well as focus on his education). His first portfolio was worth $265,000 (including contribution from his granny). He sold short and made gains from the markets in 1987.

As soon as he earned a degree in economics (1989), an investor named Frank C. Meyer was impressed by his trading performance and he gave him $1 million to trade with. Kenneth was able to maintain his success with about 70 per cent profit. Soon, people began to hear of his trading prowess and some were intrigued enough to start investing with him.

He founded his hedge fund firm: Citadel LLC, a Chicago-based investment firm, in 1990. The capital base was $4.2 million. The firm grew quickly. In fact, the business kept up growing year after year and Kenneth grew richer and richer (year after year), until he eventually became a billionaire. He first appeared on Forbes 400 (2003), with a net worth of $650 million. His worth was eventually over $3 billion (some sources even say it has grown more than that). In 2011, he was ranked as the 512th richest person in the world.

In the year 2004, he earned an income of $240 million. He was paid $210 million in 2005, making him one of the 25 highest paid funds managers that year. His firm continued to perform strongly, and he was paid $1.7 billion in 2006, plus $2.6 billion in 2007. In 2011, he collected a salary of $700 million. No wonder he was able to buy the most expensive condo in Chicago for a mere $15 million, in 2012 (it was the most expensive there at the time). Very recently, he was paid close to $1 billion dollars.

At first he avoided the press and rarely gave interviews. But now, he’s more open and he’s taken a glare of publicity. He now talks about his purchases, contributions and political views.

He makes large donations to various individuals and programs: including education, medicine, research and politics. For example, in February 2014, he gave $150 million to Harvard University, so that some students could receive financial assistance in their studies. That was the biggest single donation in Harvard’s history, to date. The financial assistance is based on the needs of students. This would help some students who’ve difficulties in paying for their education.

Kenneth is happily married with 2 kids.

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

  1. Kenneth is a great trader, but without doubt, he got his own weaknesses. All traders have their strengths and weaknesses. The logic is to capitalize on your strengths and minimize/control your weakness. Doing so will push you ahead of the crowd who tend to be undisciplined in most cases.

  1. The highest paid footballer (C. Ronaldo) in the world is far poorer than the tenth highest paid funds manager in the world. In order word, the highest paid funds manager (David Tepper, for Kenneth is number 5 on the list for the year 2014) is 35 times more paid than C. Ronaldo. A footballer may be more popular because of hundreds of millions of fans and viewers worldwide; yet a funds manager, who trades on his computers in his office, may be far more strikingly rich. Kenneth was not born a billionaire, but he becomes one. His wealth is self-made. You may have been born in a financially humble family, but that shouldn’t preclude you from reaching financial freedom.

  1. I beg you profoundly; try to be the best trader you can be. Trading is full of challenges that can be overcome. Kenneth’s faced the challenges before and he overcame them. You too can overcome. When you become a successful trader, you can manage others’ money and you’ll be paid handsomely when you make money for others. Your track record will speak for you. The effort to reach consistency in trading may be daunting, but the eventual rewards are huge.

  1. Note that it took Kenneth many years to become what he’s today; neither does he double his gains overnight. Please map out a long-term plan to make realistic and consistent gains each year. Trading career is a journey of a lifetime.

  1. Yes, Kenneth’s beginning was humble. He started Citadel with a few million dollars and the firm grew up to become one of the world’s largest hedge funds. The growth was gradual, but it was sure. Don’t despise your little beginning; though it is small. Your latter end shall increase greatly.

  1. Leverage has advantages and disadvantages. It gives you some power while you’re also exposed to more risk. The trick is to make use of the leverage you’re given in a rational way so that you benefit from it and at the same time, limit the adverse effect it may bring.

Conclude: Please don’t forget that our orders in the markets are expected to bring us some profits in the long run. So there is no need for us to stay glued to our computer, and therefore we’d do well to leave our orders to pan out without being micromanaged. As soon as we control our negativity, there would be recovery, and eventual going ahead.

This article is ended with a quote from Kenneth:

“Capital markets reward you for what you learn that other people have yet to ascertain.”



 Source: www.tallinex.com

Learn from the Generals of the Markets: Market Generals

Tuesday, October 28, 2014

Trading Signals on JPY Pairs (October 29 – November 20, 2014)


USDJPY = Buy

AUDJPY = Buy

CADJPY = Buy

CHFJPY = Buy

EURJPY = Buy

GBPJPY = Buy

NZDJPY = Buy

NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. 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.

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

Trading Signals on CAD Pairs (October 29 – November 12, 2014)

AUDCAD = Sell

USDCAD = Sell

EURCAD = Sell

CADJPY = Buy

CADCHF = Buy

GBPCAD = Sell

NZDCAD = Sell


NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. 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.


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


Urals Energy to Rise Again from the Strong Base

Urals Energy shares (LSE:UEN) had always been a hopeless equilibrium market. For most part of this year, the market has been moving in a very tight consolidation, until the price rallied massively at the beginning of October 2014. Some people may call that a spike.

In the chart, the ADX period 14 is above the level 40, showing a strong trend. The DM+ is still above the DM-, meaning that the bulls are still in control despite the current bearish retracement. The MACD (default parameters) is a kind of giving a ‘short’s signal, but when it gives a ‘buy’ signal, there would have been a Bullish Confirmation Pattern in the chart, as the indicator works alongside the ADX period 14. By then, the MACD signal lines and the histogram would have gone above the zero line.

The price got corrected downwards after the spike, almost reaching the aforementioned strong base. It is not expected that the price would go below the base, which is around the demand zone at 4.000, for the base is a morbid hindrance to the bears’ attempts. Instead, the price is expected to rally from that base, going towards the supply zone at 13.000 ultimately. However this can take many months or a few years.

We want to go long in bull markets and go short in bear markets. Therefore, we don’t care what the fundamentals do. We care only for what is happening in the chart. When price is rising in the chart, why should we go short because the fundamental figures say so?

This forecast is ended by the quote below:

“Even a trade with a profit probability of 90 per cent can result in a loss.” – Falk Elsner

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




President Energy Stock Remains Volatile as Bulls Fight for Control

President energy stock (LSE:PPC) was a volatile market which was trending downwards about a few months ago. But recently, things have gone bullish, plus the pullback that is currently happening in the market is a good opportunity to go long. When people are concerned about what is happening now, they would like to see recent data instead of very old data.

The price has already gone above the EMA 21 and the Williams’ % Range period 20 is moving into the overbought territory. By the time the Williams’ % Range is in the overbought territory, bearish influence would have been shaken off as subsequent pullbacks proffer new long chances.

There is a good chance than the price may eventually reach the resistance levels at 40 and 45 in a foreseeable future, but that statement does not come with guarantees. There is no way we can always be correct with our predictions, and as a result of this, we need to put up with the negativity that comes our way now and then.

This forecast is ended by the quote below:

“Complicated systems breed confusion; simplicity breeds elegance.” – Justice Jack Sparrow Litle

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Sunday, October 26, 2014

Daily analysis of major pairs for October 27, 2014

On Friday, October 24, 2014, the USD/JPY closed above the demand level at 108.00; on a bullish note. There is a bullish signal in the market and the price may go upwards this week, reaching the supply level at 109.00. However, any possible pullbacks along the way may be contained at the demand level of 107.50.    

EUR/USD:  Last week, this currency trading instrument closed at 1.2669, on a bullish note. The dominant bias is bearish and therefore, the market may fall further towards the support line at 1.2600. That is the first target for the bears. On the other hand, there could be some attempted rally, which may push the price towards the resistance line at 1.2750.


USD/CHF: This pair is making some attempts to go upwards. The resistance level at 0.9550 has been tested, prior to the current shallow bearish retracement. The price could go further upwards, breaking that resistance level at 0.9550 to the upside, while making more attempts to reach another resistance level at 0.9600.

GBP/USD:  The bias on the Cable is neutral, but the consolidation in the chart is going to the upside. It is much likely that the GBP could gain strength this week, and therefore, the GBPUSD may go further upwards, reaching the distribution territory at 1.6150. By then, there could have been a Bullish Confirmation Pattern in the market.

USD/JPY: On Friday, October 24, 2014, the USD/JPY closed above the demand level at 108.00; on a bullish note. There is a bullish signal in the market and the price may go upwards this week, reaching the supply level at 109.00. However, any possible pullbacks along the way may be contained at the demand level of 107.50.   

EUR/JPY:  There is a ‘buy’ signal on this cross, and the price is expected to go further upwards this week, reaching the supply zone at 138.00. The probability of a further bullish movement is very high, which makes short trades illogical.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Weekly Trading Forecasts on Major Pairs (October 27 - 31, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
This is a weak market, and the current shallow rally is another opportunity to go short. This week, there is a possibility that the price would go south, reaching the support lines at 1.2600 and 1.2550 respectively. The resistance lines at 1.2750 and 1.2800 ought to serve as hindrances to the bulls’ interests, for the bulls may want to push the price upwards.  

USDCHF
Dominant bias: Bullish   
The USDCHF has some strength in it, as opposed to the EURUSD, and the current negligible bearish retracement may give the bulls a good chance to enter the market at a better price. This week, there is a possibility that the price would go north, reaching the resistance levels at 0.9600 and 0.9650 successively. The support levels at 0.9450 and 0.9400 should act as formidable barriers to the bears’ interests, for the bears may want to push the price downwards.

GBPUSD
Dominant bias: Neutral   
There is no clear directional bias on the Cable, especially as far as the recent price action is concerned. It is not unusual for the price to trend upwards, only to trend downwards again (all in the near term). Looking at the price action more closely, it would be noticed that the bulls are making some sincere effort to gain upper hands; hence the current consolidation to the upside. It is more likely that when a breakout does occur in the market, it would be to the upside. Should this prove to be correct, the price may reach the distribution territories at 1.6150 and 1.6200.

USDJPY
Dominant bias: Bullish  
This currency trading instrument has been going upwards in a slow and steady manner.  The price is currently above the demand level at 108.00, and a break above the demand level at 108.50 would result in a very strong Bullish Confirmation Pattern in the market. Given what is happening in this market, short trades are presently not advisable. There is a demand level at 107.00.   

EURJPY
Dominant bias: Bullish
The Euro itself is not strong, but here, the Yen is weaker than it. This reality has reflected in the bullish effort on this cross. Since testing the demand zone at 135.50, the price has gone upwards by around 150 pips. The supply zone at 137.00 is now under siege – almost giving way as it is being battered by buying pressure. As it is expected of most JPY pairs, the cross may go further upwards this week, reaching the supply zones at 137.50 and 138.00.  

This forecast is concluded with the quote below:

I enjoy talking about trading and would like to convince people that you can learn to trade just as you can train for any other profession and that there's nothing "evil" about it.” - Ruediger Born



Wednesday, October 22, 2014

I want to learn Forex but there are hindrances

"When you're in love with a market, it shows...in your trading account." - Old Trader

It’s no longer news that Forex markets are full of opportunities. Sure, there are challenges, but once you learn what it takes to overcome those challenges and become consistently successful, then the opportunities in the markets would bring you rewards. Why do some people feel reluctant to try Forex markets? It’s because they think success in the markets isn’t easy.

Success in other fields is also not an easy thing. More than 12 year ago, a young woman told me she wanted to become an actress, plus the reasons why she wanted to become an actress. Obviously, she was dreaming of becoming a celebrity, thinking of the glamor, fame, benefits, and riches that are being enjoyed by successful actors and actresses. I only advised her to weigh all the pros and cons of what she wanted to do.

Within a short time she joined a local theatre group and began practicing with them. Several days later, she followed them to a film location. That was when she was exposed to the dark sides of the local film industry: instant privation. This also included paling into insignificance when compared to veteran actors/actress on the location. She saw that her chances of becoming an instant celebrity were very slim. What she dreamed of didn’t come as quickly as she’d previously imagined. She thought she would join the industry and quickly become a star; but the reality was different.

When I later saw her, I asked how far with her experience with her new career. She told me the dismal things she faced, including having to work hard without any financial compensation. She swore never to go into the movie industry again and she stood by her promise. Perhaps, she could eventually realize her dreams if she’d pressed on for as long as it’d take her. 

Can you see how this true story relates to trading? Nothing good in life is easy to achieve. Sadly, there are many people who’re interested in Forex, but because of one flimsy alibi or another, they keep on postponing the experience that has the potential to bring them financial reward.

Flimsy Alibis
Some have tried everything they think they can do, without attaining any success. They may now threaten that if the new course or strategy that they want to purchase doesn’t work, they’ll never trade again. As Philip Yancey says, a truly paranoid person organizes his or her life around a common perspective of fear. Anything that happens feed that fear. The fact is that such people have really lost interest in the markets. While it’s wise to learn from the past, we shouldn’t live in the past.

Some think that they’re currently facing serious expenses and therefore they’ll have to wait till next year before they can start learning/trading. The fact is that there’s no guarantee that their expenses will be reduced next year.

Some say they want to learn everything they need to know about trading, including taking any courses and reading any books they can find. They think they can’t start until they’ve done that. The fact is that they’re yet to learn anything or read any books. If they’re yet to do it, would they be able to do it at all?

Some think they can learn trading by trial and error. This is possible, but time-consuming and circuitous. They may think they can become a market wizard at will. Then, what stops them from becoming a market wizard? 

You may think you can only trade when you’re less busy. Do you work only when you’re less busy? Trading is a serious business; it’s not for those who’re less busy.

You may think you can’t trade because your family doesn’t support that. You may want to think of how to win their support. Maybe if they know and appreciate the truth and realities of trading, they may support you. The way we view our circumstances is more important than the circumstances themselves.

If you say you don’t want to trade now, but in future, you may have forgotten that ephemeral wishes don’t mean anything. Anyone who doesn’t have the time for trading can’t trade. Anyone that doesn’t have resources to trade can’t trade. We worry so much about protecting ourselves that we fail simply to step up. These are facts.

Conclusion: What you can do today, don’t postpone till tomorrow. The best time to do anything is now. Make your decision and learn how to approach the markets as rationally as possible.
There are numerous ways to make money in the markets – just as there are numerous traders in the markets.

The quote below ends the article:

“We are all different and there are many ways to win in the markets – the important thing is to develop your own best method.” – Charles E. Kirk

Source: www.tallinex.com

Learn from the Generals of the Markets: Market Generals

Emed Mining Shares Gain Strength

Emed Mining shares (LSE:EMED) have gained strength as a result of buying pressure in the market. When we look at our chart in order to determine a bias, we see a bullish bias as the price makes higher highs and lower lows. The market moves because someone is interested in a higher price or a lower price.

We study charts in attempts to discover a promising candidate like this. The historical price has been full of large swings up or down, with high volatility. In this month, the price bottomed seriously and then rallies, going above the upper Trendline. The RSI period 14 is also above the level 50. This indicates a bullish strength that may enable the price to go below above the supply level at 8.50.

This forecast is ended by the quote below:

“Never underestimate trends. Trends can go on for years and riding one good trend might be a life changer. Treat early winners as potential trends, for each winner of 100 per cent must start off with one per cent.” – Dirk Vandycke

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Tethys Petroleum Continues Its Downtrend

Tethys Petroleum stock (LSE: TPL) has long been in a downtrend and this is supposed to continue. This downtrend has been going on for most part of this year, while rallies proffer short-selling opportunities. We do not want to be fooled by the noises in the market. Rather, we want to look at the Big Picture. On Tethys, the Big Picture is a weakness in the market.  

4 EMAs are used for this analysis, and they are EMAs 10, 20, 50 and 200. The color that stands for each EMA is shown at the top left side of the chart. All the EMAs are sloping downwards, with the EMA 50 providing resistance in the near-term and the EMA 200 providing resistance in the long-term. Any rallies into the EMA 10 or 20 may enable the price to nosedive again. It is not sensible to short a bull market, and neither is it sensible to purchase a bear market. The price may eventually reach the support level at 13.00.

This forecast is ended by the quote below:

 “Just as scientists claim, according to Chaos Theory, that a butterfly can start a storm, you can imagine that a few key, seemingly minor events, can start a major market move.”  – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Monday, October 20, 2014

Gold Becomes Bullish, and Silver to Follow Suit

GOLD (XAUUSD)
Dominant Bias: Bullish  
As it was expected, the trend on Gold has turned bullish – with a Bullish Confirmation Pattern in the market. The recent bearish bias drove the price as low as the demand level at 1183.00. That demand level was tested vigorously before further downward plunge was rejected, and since then, the price has moved upwards vigorously, rejecting bearish pulls along the way. Since early October 2014, the price has moved upwards by over 6600 points. It is no longer logical to seek short trades in this market, and buyers would do well to buy on dips, buying when things are temporarily on sale and in the context of the uptrend. This bullish trend may possibly continue for the rest of the year 2014, as dips along the way offer new opportunities to open long trades. Gold may soon reach the supply level at 1270.00.

SILVER (XAGUSD)
Dominant Bias: Bullish  
The bias on Silver is also bullish, but the upwards trend in the market is much weaker when compare to the upward trend on Gold. When both Gold and Silver was bearish, the downwards move on the latter was stronger and more furious than the downward move on the former. Now that things have gone bullish, the upward move on Gold is far stronger and more determined that the upward move on Silver. In fact, Silver has been in a kind of consolidation, but when a breakout does occur, it is more likely that it would be to the upside. The price may then reach the resistance level at 18.0000, even going above it.  



 Learn from the Generals of the Markets: Market Generals

Sunday, October 19, 2014

Daily analysis of major pairs for October 20, 2014


The EUR/USD has finally succeeded in going bullish. This has left a Bullish Confirmation Pattern in the chart, and the price is much more likely to go further upwards towards the resistance line at 1.2900.

EUR/USD:  The situation on the Greenback was the major determinant of the overall market directions last week. The EUR/USD has finally succeeded in going bullish. This has left a Bullish Confirmation Pattern in the chart, and the price is much more likely to go further upwards towards the resistance line at 1.2900.


USD/CHF: Since the USD has become weak, the outlook on the USD/CHF has been bearish. The price is more likely to test the support level at 0.9350 this week, for this is the weekly target. However, attention should be paid to the high volatility in the market (and in the Forex market generally). The high volatility is usually characterized by large upswings and downswings, and therefore, this should be considered when trading.

GBP/USD:  The Cable is also making genuine bullish attempts, which can render the recent bearish scenario completely invalid. The price is already going up, and the overall bias would turn bullish immediately the price crosses the distribution territory at 1.6200 to the upside.

USD/JPY: This pair closed at 106.89 on Friday, October 17, 2014. The price trended downwards last week, but the bull is now making some effort to push the price upwards. Nevertheless, the dominant bias remains bearish until the supply level at 107.50 is breached to the upside.

EUR/JPY:  This cross is also making some serious effort to go upwards in the context of an overall downtrend. From the demand zone at 134.50, the price has gone upwards; and a movement above the supply zone at 137.00 would mean the end of the bearish outlook.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Saturday, October 18, 2014

Weekly Trading Forecasts on Major Pairs (October 20 - 24, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
The major determinant of the direction of the EUR/USD (including most other USD pairs) is the USD itself. As a result of the weakness in the USD, the EUR/USD pair has been able to sustain its bullish attempts, which have been going on for about two weeks. There is now a Bullish Confirmation Pattern in the chart, and the price may end up reaching the resistance line at 12900. There are support lines at 1.2700 and 1.2650. The current pullback in the market may proffer opportunities for long trades.

USDCHF
Dominant bias: Bearish  
This pair has inevitably been moving in the opposite direction to the EUR/USD – hence the bearish outlook on it. Since October 6, 2014, the price has dropped by almost 300 pips. There is a high probability that the weakness in the market may continue, enabling the price to test the support lines at 0.9400 and 0.9350 respectively. Meanwhile, any bullish attempts may be frustrated at the resistance levels of 0.9550 and 0.9600.

GBPUSD
Dominant bias: Bullish    
This market is bullish because of the bullish effort on it, and the bullish effort has become strong enough to drive the price above the accumulation territory at 1.6050. Long trades are no longer advisable here, unless the price drops below the accumulation territory at 1.6000. Really, the price is expected to continue going upwards within the next several trading days, reaching the distribution territory at 1.6200.  

USDJPY
Dominant bias: Bearish
This has remained a bear market, unless the current rally in the context of the downtrend continues until the price is able to reach the supply level at 108.00. By all indication, it seems the market is bent on moving upwards, but one should stay aside until the supply level is breache to the upside. Otherwise, this may turn out to be another short-selling opportunity.   

EURJPY
Dominant bias: Bearish
The scenario on this currency trading instrument is nearly similar to that of the USD/JPY. The market is making some commendable effort to go north, but the overall bias remains bearish. This is a highly volatile market, with upswings alternated by downswings. The high volatility should be put into consideration when trading. When the instrument moves above the demand zone at 137.00, it can be said the bearish bias is over; otherwise, buyers should be cautious.  

This forecast is concluded with the quote below:



"At the heart of all trading is the simplest of all concepts—that the bottom-line results must show a positive mathematical expectation in order for the trading method to be profitable." - Chuck Branscomb



Thursday, October 16, 2014

An Opportunity to Sell Emerges on Leni Gas

There is now an opportunity to go short in Leni Gas market (LSE:LGO). Although the market has been going upwards for the most past of this year, the recent bias has turned bearish and has rendered the dominant bullish bias invalid.

In the chart, the ADX period 14 is still essentially above the level 30, which means there is still momentum in the market. The DM- has almost crossed the DM+ to the downside, showing that the sellers have gained upper hands. For the MACD (default parameters), the histogram is already below the zero line; plus the signal lines are almost crossing below the zero line. Should this pan out eventually, it would lead to a Bearish Confirmation Pattern in the market. The price is thus expected to go further downwards, reaching the resistance level at 1.50 this year or sometimes next year.

This forecast is ended by the quote below:

“Opinions can change but the laws of supply and demand remain the same forever.” – Sam Evans

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



JQW Stock Shall Plunge Towards the Demand Level at 30.00

JQW stock (LSE:JQW) shall plunge towards the demand level at 30.00 within the next several weeks or months. This is very likely because the dominant bias has been bearish since the beginning of July 2014.

Now, there is a clean rally attempt in the market, which gives another opportunity to go short at a better price. The price is generally below the EMA 21 and the Williams’ % Range period 20 – which has always been around the oversold territory – has surged upwards. The upward surge is a trap to the bull, since the price is expected to come down again, reaching the aforementioned demand level. In this kind of market, the astute bear is not afraid of going short again (or remaining short).  The chimpanzee is not afraid of somersaulting.

This forecast is ended by the quote below:

"You know traders are growing when they start asking questions that have answers." -- Old Trader

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Wednesday, October 15, 2014

Michael Marcus: A Mentor to Trading Geniuses

LEARN FROM THE GENERALS OF THE MARKETS - PART 53

"You need to get comfortable with losing money, or you will never make money." - Chris Tate


Michael Marcus is a professional trader. He went to Johns Hopkins and studied Psychology at Clark University. He started speculating on the markets in the year 1972. His first trade was successful, though that might be out of pure luck. In 1973, his portfolio that was initially worth twenty-four thousand US dollars was increased to sixty-four thousand US dollars. In fact, he’s said to have turned his portfolio from thirty thousand US dollars into eighty million US dollars.

Michael has worked for many trading firms in various capacities. His investment strategies are unique and the trading instruments he chooses are well-known and traded in well-planned ways. He’s also a technical analyst. He’s featured in a book titled: “The Predictors: How a Band of Maverick Physicists Used Chaos Theory to Trade Their Way to a Fortune on Wall Street.” He was reported to have been an ardent follower of the Maharishi Mahesh Yogi.

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

1.         Although Michael is today viewed as a legendary trader, he started as a noob who had initial challenges in the markets. You may be a noob today, but that shouldn’t prevent you from becoming a legendary trader in future.

2.         When Michael was having challenges, he was mentored by Ed Seykota (a market wizard). Ed’s help and guidance made Michael a better trader. He was also taught money management. Do you find it difficult to be a successful trader? You might want to find a mentor who’s a successful trader cum talented coach. You might be surprised. Michael himself is now a mentor to professional traders.

3.         There’s life outside trading. Don’t be a market addict – to the detriment of your spiritual, social, parental, connubial etc. health. That’s what affected Jesse Livermore; the end of his life was worse. Michael was once making this kind of mistake. He was married to his screen and checked the market actions now and then, even at night. According to him, that was a factor that contributed to the collapse of his first marriage. He says: “If trading is your life, it is a torturous kind of excitement. But if you are keeping your life in balance, then it is fun. All the successful traders I’ve seen that lasted in the business sooner or later got to that point. They have a balanced life; they have fun outside of trading. You can’t sustain it if you don’t have some other focus. Eventually, you wind up over trading or getting excessively disturbed about temporary failures.” This is a great lesson. 

4.         It’s better to trades the markets that you understand very well and which you’re comfortable with.  Stay out of equilibrium markets, volatile markets, choppy and unpredictable markets. Trade only the markets that are easy to predict; the markets that you know very well. If you’re only familiar with Forex markets, you’d have difficulty making money from trading futures. Stay out of irrational and insane markets and court sexy and trending markets. This is one way to increase the odds in your favor.

5.         As it is said before, money management is very important. This is one of Michael’ formulas for lasting survival in the markets. You can survive protracted losing streaks only when you risk a small amount per trade. When winning streaks come around, the losses are then recovered. By risking too much per trade, there’s no way you can survive long in the markets; which means you won’t be able to recover your losses and you’ll stop trading. The best trading technique has losing streaks at times. With money management, you can avoid a margin call.

6.         We become better at trading only when we embrace losses and learn lessons from them. The lessons can change us for the better and revolutionize our trading approaches. Great traders don’t think they’ll always win – that’s impossible. We don’t make progress when we blame the markets. We make progress when we learn from our mistakes.

7.         There are many ways to make money without being active on the markets. This may be through funds management accounts, social trading or signals strategy services. However, if you want to be a trader, you need to learn how to trade, including the trading approaches that fit your psychology. You need to discover the type of trader you are and what works for you.

Conclusion: A good trader would eventually recover the recent loss she/he suffered. For examples, good funds managers have made gains that more than compensate for the negativity they experienced during the recent financial crises (some even made gains during the crises). It is also important to know which markets and currency trading instruments are favorable to your trading style. You need to begin to acquire the skills necessary to make you a victorious speculator. Should you fail to do this, you’d discover that you’re still a novice in several years to come, just as you’re now.

This article is ended with a quote from Michael:

“Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don’t stay with your winners, you are not going to be able to pay for the losers.”



  
Learn from the Generals of the Markets: Market Generals 

Tuesday, October 14, 2014

Trading Signals on CAD Pairs (October 15 – 29, 2014)

AUDCAD = Buy

USDCAD = Buy

EURCAD = Buy

CADJPY = Sell

CADCHF = Sell

GBPCAD = Buy

NZDCAD = Buy


NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. 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.


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

Monday, October 13, 2014

Trading Signals on JPY Pairs (October 13 - 29, 2014)

Trading Signals on JPY Pairs (October 13 - 29, 2014)

USDJPY = Buy

AUDJPY = Buy

CADJPY = Buy

CHFJPY = Buy

EURJPY = Buy

GBPJPY = Buy

NZDJPY = Buy

NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. 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.


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, October 12, 2014

Daily analysis of major pairs for October 13, 2014

In spite of the bullish attempt that happened on it last week, the Cable is still in a bearish mode. The price is now below the distribution territory at 1.6100, going towards the accumulation territory at 1.6000. The price might touch the accumulation territory before there could be a potential upwards bounce in the market.

EUR/USD:  On this pair, the bulls made genuine attempts to drive the market northwards, but they were eventually overpowered by the bears. On Friday, October 10, 2014, the price closed at 1.2628; on a bearish note. There is a possibility that the price may even test the support line at 1.2550.



USD/CHF: What can happen on the USD/CHF is simply a negatively correlated movement when compared to the EURUSD. In spite of the pullback that occurred in the market, the price was able to shrug off the bearish pulls, closing on a bullish note. There is still a Bullish Confirmation Pattern in the chart, which could see the price testing the resistance level at 0.9700. This resistance level is one of the ultimate levels targeted by the bulls.

GBP/USD:  In spite of the bullish attempt that happened on it last week, the Cable is still in a bearish mode. The price is now below the distribution territory at 1.6100, going towards the accumulation territory at 1.6000. The price might touch the accumulation territory before there could be a potential upwards bounce in the market.

USD/JPY:   The Bearish Confirmation Pattern on the USD/JPY is still intact.  The price is now trading below the supply level at 108.00, going towards the demand level at 107.00. That is the next target for the bears, and the target could be reached before the price turns upwards.

EUR/JPY:  This is a bear market which could be threatened by a sudden weakness in the Yen. The market could continue going south as long as the Yen is strong, but should the Yen show any sign of weakness, there could be a rally in the market.  

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


Saturday, October 11, 2014

Weekly Trading Forecasts on Major Pairs (October 13 - 17, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish  
Recently, this pair made some commendable effort to rally, but the Greenback is still very determined to continue showcasing its strength.  The attempted rally in the market had almost invalidated the bearish outlook before the bears succeeded in pushing the price significantly south. The price is now under the resistance line at 1.2650, and should the bears hold out long enough, the price could test the support line at 1.2500 again.

USDCHF
Dominant bias: Bullish   
The weakness on the EURUSD has invariably had salutary effect on the USDCHF. There was a pullback that almost resulted in a Bearish Confirmation Pattern, but the bulls were again able to push the price upwards, allowing it to go above the support level at 0.9550. With further bullish determination, the price may end up reaching the resistance level at 0.9701 – which is a level that has long been targeted by the bulls.   

GBPUSD
Dominant bias: Bearish   
Since the Cable is positively correlated with the EURUSD, it is no wonder that the former would go almost in the same direction with the latter (in most cases). There was a noticeable attempt to push the price upwards. However, the bears subjugated the bulls and ended up pushing the price downwards; which allowed the Bearish Confirmation Pattern to form in the market. Further southwards movement in the price may enable it to reach the accumulation territory at 1.5950 again.

USDJPY
Dominant bias: Bearish
Yes, the JPY is strong and the mighty USD is not even spared. This currency trading instrument has been going downwards recently, making it illogical to go long. Nevertheless, the demand levels at 107.50 and 107.00 may succeed in halting the bearish movement. While it is possible that the price may test the aforementioned demand levels, the possibility of a rally exists for next week, which may bring the price towards the supply levels at 109.00 and 109.50.  

EURJPY
Dominant bias: Bearish
This market dropped by over 140 pips this week, breaching the demand zone at 136.00 to the downside. The demand zones at 135.50 and 135.00 may be tested, but they may end supporting the bullish effort, since it is possible that most JPY pairs may rally this week.  Should this prove to be correct, the price may reach the supply levels at 137.00 and 138.00.

This forecast is concluded with the quote below:


“I have always been fascinated by being successful in the markets and making my way there.” – Rene Wolfram



Thursday, October 9, 2014

Buying Pressure Makes Bahamas Petroleum Shares Look Attractive

Bahamas Petroleum shares (LSE:BPC) looks very attractive to buyers as a result of the buying pressure in the market. Even if the price gets corrected southwards, it would eventually rally and break more and more supply levels to the upside.

Recently, the price has formed a strong base after it experienced a sharp drop. The base – which held out for a few weeks – resulted in a serious equilibrium phase. In September 2014, price shot skywards from the base, testing the supply level at 5.00 before going downwards again. The price must go above the upper Trendline so that the bias can continue to be logically bullish (a movement below the lower Trendline would also mean a new southwards outlook). The RSI period 14 has bounced off the level 50, pointing further upwards.

The worst thing that may potentially happen to the price of Bahamas Petroleum shares is to test the demand level at 2.00, because the price would often rally after or before testing the demand level. The market may continue going upwards until it reaches the supply level at 6.00.

This forecast is ended by the quote below:

"It's better to take a more realistic, practical approach to trading. It's vital to be a realist." – Joe Ross 

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


EBay Stock Finds Support as the Price Rallies

EBay stock (NASDAQ:EBAY) has found support around the EMA 200, as a potential death cross was averted and the price rallies from there. The price gapped up seriously at the end of September 2014, and it later dropped. But the price has turned upwards after testing the EMA 200, which acts as a great support for bullish effort.

In the chart, 4 EMAs are actually used and they are the EMAs 10, 20, 50 and 200. The color that stands for each EMA is shown at the top left corner of the chart. The market has been volatile seriously, but the recent action of the EMAs shows that the near-term bias is bullish. Transient noises ought not to mislead a professional trader, especially one who respects the big picture. It is shameful for an expert swing trader to be misled by a mere fleeting noise in the market. It is shameful for a professional hunter to report being chased by a rodent.

From here, the price may go upwards to test the distribution territory at 60.00 to the upside. The distribution territory may even be breached to the upside as the market goes towards another distribution territory at 70.00.

This forecast is ended by the quote below:

"You have all it takes to be a fantastic trader. You might just need someone to boost you up and give you the confidence to triumph." - Louise Bedford 

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Tuesday, October 7, 2014

Trading Signals on AUD Pairs (October 8 – November 6, 2014)

Trading Signals on AUD Pairs (October 8 – November 6, 2014)

AUDJPY = Buy

AUDUSD = Buy

EURAUD = Sell

AUDCAD = Buy

AUDCHF = Buy

GBPAUD = Sell

AUDNZD = Buy

NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. 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.

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

Monday, October 6, 2014

Trading Signals on the EUR Pairs (October 6 - 24, 2014)

Trading Signals on the EUR Pairs (October 6 - 24, 2014)

EURUSD = Buy

EURCAD = Buy

EURAUD = Buy

EURNZD = Buy

EURJPY = Buy

EURCHF = Buy

EURGBP = Buy

NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 would be used. 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.

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

A Simple Change in Trading Signals Approach

“Trading for a retail trader is the best job in the world, and if you can perform it without holding a PhD in statistics… how much time you’ve saved!” – Professor Emilio Tomasini

We’d like to announce a necessary but simple change in our trading signals approach. With the new approach, a market direction for a relevant trading instrument would be given, e.g. USDCAD = Sell. Then an interested person would simply set a stop loss of 100 pips and a take profit of 200 pips for the trade. The stop loss and take profit can be set before, or immediately after a trade is opened.

This is necessary because effort has been made to improve the accuracy of the signals, and therefore, the frequency of the signals will be increased. The signals generated since September 19, 2014 have been reflecting the effort. We can now look forward to better trading results on a quarterly basis (with thousands of pips in some months).

For example, should it be seen that the CHF pairs might become weak, there would be signals thus:

USDCHF = Buy

EURCHF = Buy

GBPCHF = Buy

AUDCHF = Buy

NZDCHF = Buy

CADCHF = Buy

CHFJPY = Sell

When the USD is very strong, almost every pair that has the USD as the base currency would rise and any pair that has the USD as the counter currency would fall. When the USD is very weak, almost every pair that has the USD as the base currency would fall and any pair that has the USD as the counter currency would rise.

Someone who predicted that the EUR would be strong around the middle of September 2014 would have been somewhat correct in spite of the fact that the EURUSD was weak throughout that month. Why? The EURAUD, the EURZND, and the EURJPY rallied massively in September 2014 (the EURNZD alone rose by more than 800 pips). Therefore, EURUSD fell only because the USD was stronger than the EUR.

Successful Forex trading is all about matching weak currencies with strong currencies, and anyone that can do that effectively will always come out ahead no matter what, when her/his results are evaluated on monthly/quarterly/annual basis.

With improved hit rate, one may be tempted to bet big on each trade, but it’s far better to bet very small. What cause big roll-downs are lot sizes that are too big for a particular portfolio balance. For each trade, only 0.5% should be risked. In trading, the less our risk per trade, the more money we make in the long run. Another benefit is that 0.5% risk per trade isn’t only a protection to our portfolios; it’s also a protection to our nerves. With this kind of low risk, we’re naturally indifferent to the outcome of an individual trade. Yes, we trade with peace of mind.

Since we use an RRR of 1:2, we simply have good chances of moving ahead. It’s like risking 0.5% to gain 1% - risking $1 to gain $2. With seven trades, we risk a total of 3.5% to gain a total of 7%. The forecasts come with about 70% potential accuracy, but with only 40% accuracy we’ll be ultimately triumphant. In another instance, we make nice profits even when we win 9 trades out of 21. We break even when we win only 7 trades out of 21.

Trade and risk management recommendations would accompany the signals. The purpose of risk management is to keep our accounts permanently safe no matter our trading results. Nevertheless, risk management can’t make us money – only bold predictions will make us money. Bold predictions make our accounts grow when we’re correct, and risk management keeps our accounts safe when our predictions are wrong. This is one example of the beauty of trading.

Our breakthrough in the markets begins in a new direction. Until you become a trader or an investor, you can’t access the riches the markets offer.

This article is ended by the quote below:

“Professional traders have a rare talent, and feel fulfilled because they express their talent by trading profitably.” – Joe Ross


Learn from the Generals of the Markets: Market Generals


Sunday, October 5, 2014

Daily analysis of major pairs for October 6, 2014

Last week, the Cable dropped by over 270 pips, going below the distribution territory at 1.6000, and closing at 1.5971 on Friday (October 3, 2014). The Bearish Confirmation Pattern is now very strong and the price could test the accumulation territory at 1.5900 this week.   

EUR/USD:  This pair has continued to be weak, breaking the market line at 1.2550 to the downside and closing below it. This week, the price may easily target the support line at 1.2500: it may even go below it. However, there are also possibilities that attempted rallies may cause the price to reach the resistance lines at 1.2600 and 1.2650 respectively.


USD/CHF: As long as the USD is strong and as long as the EUR/USD is weak, this pair has nowhere to go except upwards. The pair moved upwards by over 170 pips last week; and it is now threatening to test the resistance level at 0.9700. Should the market remain strong enough, the resistance level could be breached to the upside, going towards another resistance level at 0.9750.

GBP/USD:  Last week, the Cable dropped by over 270 pips, going below the distribution territory at 1.6000, and closing at 1.5971 on Friday (October 3, 2014). The Bearish Confirmation Pattern is now very strong and the price could test the accumulation territory at 1.5900 this week.  

USD/JPY:  This is a bull market, and the sharp but transitory drop that occurred in the market last week simply gave a clean opportunity to go long when things when on sale and in the context of an uptrend. As long as the Greenback is strong, this currency trading instrument would be going upwards. It may reach the supply level at 110.50 this week.                                                                                                                                                  
EUR/JPY:  This market is weak because of the weakness in the EUR itself. Further bearish move may cause the price to test the demand level at 136.50. On the other side, a rally may happen this week, taking the price towards the supply zone at 138.50.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group




Friday, October 3, 2014

Weekly Trading Forecasts on Major Pairs (October 6 - 10, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish  
The EUR is now one of the weakest currencies among the majors, while the USD is the strongest currency among the majors. Hence, the EURUSD dropped sharply again last week, dropping below the resistance line at 1.2550. Further downwards movement may cause the price to test the support lines at 1.2500 and 1.2450. However, it is very much likely that the EUR would begin to rally before the end of this week, which may eventually cause the aforementioned support lines to end up aiding the bulls.

USDCHF
Dominant bias: Bullish   
The movement of this market is largely determined by what is happening to the USD and the EURUSD. A serious rally in the EURUSD may result in a sharp pullback on the USDCHF, which may make it to test the support level at 0.9550; whereas a continuation of the weakness in the EURUSD may cause the USDCHF to test the resistance level at 0.9750. But it should not be thought that the USD would reach parity with the CHF.  

GBPUSD
Dominant bias: Bearish   
The Cable dropped by over 270 pips last week, closing below the distribution territory at 1.6000. The price may reach the accumulation territory at 1.5900, which could be easily test this week – it could even get breached to the downside. On the other hand, the distribution territories at 1.6050 and 1.6100 may be targeted by the bulls.

USDJPY
Dominant bias: Bullish
This is a very strong currency trading instrument, forming a Bullish Confirmation Pattern in the market. There was a sharp pullback in the market last week, brought about by transitory stamina in the Yen.  Eventually, the sharp pullback proffered an opportunity to go long when things went on sale in the context of a downtrend. The current rally in the market could lead the price towards the supply level at 110.50.

EURJPY
Dominant bias: Bearish
Since this market tested the supply zone at 141.00, it has come down by over about 400 pips. The demand zone at 137.00 has been tested, and the demand zone to watch this week is at 136.00. Should the EUR rally significantly enough, there may be a bullish run in this market, which could make become a threat to the current bearish outlook.

This forecast is concluded with the quote below:

“Information is power. Most big profits are gained through one person knowing something that most other people don’t.” – Skip Archimedes

Source: www.tallinex.com

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.