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Sunday, November 30, 2014

Daily analysis of major pairs for December 1, 2014

The ultimate target for USD/JPY is at the supply level of 119.00, and price is now close to that target. With further strength in the market, the supply level can be breached to the upside as the bulls continue to push price up. In that case, the next target could be the supply level at 119.50.   

EUR/USD: The bias on the EURUSD remains bearish in spite of the bull effort to push price upwards. Rallies into the resistance lines at 1.2500 and 1.2600 should be seen as short-selling opportunities (for price may go further downwards from there). It is only a break above the resistance line at 1.2600 that can render the bearish bias invalid.


USD/CHF: The bias on this pair remains bullish in spite of the bearish attempt on it. Pullbacks into the support levels at 0.9600 and 0.9550 should be seen as good offers to buy long, unless price breaks the support level at 0.9550 to the downside. In that case, the bias could turn bearish.

GBP/USD:  The Cable is weak, even weaker than EURUSD. Therefore long trades are not currently recommended unless price breaks the distribution territory at 1.5800 to the upside. In the near-term, price may touch the accumulation territories at 1.5600 and 1.5550.

USD/JPY: The ultimate target for USD/JPY is at the supply level of 119.00, and price is now close to that target. With further strength in the market, the supply level can be breached to the upside as the bulls continue to push price up. In that case, the next target could be the supply level at 119.50.  

EUR/JPY:  This cross moved upwards at the beginning of last week and then moved sideways; before breaking further upwards on Friday. As expected, momentum has returned to this market and it has resumed its upwards journey. This has happened following the short-term base that was built by the sideways movement that occurred last week. The ultimate target is at the supply zone of 149.00 – which would be reached only with significant strength in the market.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Friday, November 28, 2014

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

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
This pair showcases a seriously struggle between the bull and the bear, as price remains volatile. The bull is making attempt to push price upwards but now and then, this is being thwarted by the bear. Before it can be said that the bias has turned bullish, the pair must go above the resistance line at 1.2600. On the other hand, a movement below the support line at 1.2400 would signify the strengthening of the extant bearish bias.

USDCHF
Dominant bias: Bullish   
As long as EURUSD is bearish, USDCHF will be bullish. In fact, it is very much likely that USDCHF would remain bullish for the rest of the year 2014, and therefore, one could look forward to buying short-term pullbacks. Pullbacks into the support levels at 0.9600 and 0.9550 could be good entry signal for buyers, especially when bullish candles form after these support levels are tested. Only a break below the support level of 0.9550 would mean the end of the bullish outlook, providing that price closes below that level.

GBPUSD
Dominant bias: Bearish  
The weakness in the Cable is more pronounced than the weakness in EURUSD. Short trades are not currently recommended in this market, for price could test the accumulation territories at 1.5600 and 1.5550.   The distribution territories at 1.5750 and 1.5800 should challenge any rallies that may want to start in the context of this downtrend. The idea of long trades may not be entertained until the distribution territory at 1.5800 is breached to the upside.

USDJPY
Dominant bias: Bullish  
This currency trading instrument has not reached the supply level at 119.00, but it is now close to reaching it. With the presence of the Bullish Confirmation Pattern in the market, it is likely that the supply level would be breached to the upside, as price targets another supply level at 119.50. Bearish retracements that take price into 118.00 and 117.50 temporarily would offer good opportunities to buy.     

EURJPY
Dominant bias: Bullish
EURJPY cross trended upwards at the beginning of this week and later moved sideways for a few days, forming a short-term base. On Friday, November 28, 2014, price broke upwards from the base – poised to go further upwards.  The base is now a barrier to bearish retracements, being located around the demand level at 146.00. Price may now target the supply zone at 149.00.

This forecast is concluded with the quote below:

“Without the discipline to follow a plan, your trading results will be random at best.” – Dave Landry






Wednesday, November 26, 2014

James Chanos: A Short Seller with Record Success

LEARN FROM THE GENERALS OF THE MARKETS - PART 56

"The most important function that fundamental short sellers bring to the market is that they are real time financial detectives."

Born in 1975, James Chanos is an American professional speculator and funds manager who’s a great bear in the market. He was born in a Greek family, and he attended Yale.  He worked as an analyst at Blyth Eastman Webber, Gilford Securities, and later, Deutsche Bank Capital Corp (where he was also vice president).

In 1985, James founded Kynikos Associates (registered in New York), which focuses on short selling. Since then he’s amassed great wealth by making popular short trades.  This is the mirror of what the Oracle/Sage/Wizard of Omaha does, which is based on fundamentals and long-term bullish outlook. James Chanos uses fundamentals and long-term bearish outlook. He’s successfully shorted some popular stocks like Baldwin-United and Enron Corporation, which have made him famous. He doesn’t just sell short, he sometimes blows whistle on some companies whose stocks, based on his analyses, would soon assume long-term southward journeys. He blew another whistle on China in 2010, that the country should be shorted. He’s plausible reasons for saying this, but time would tell how true the forecast is.

How rich is James? A recent report reveals that he’s worth about $1.5 billion. His net worth testifies to the validity of his forecasts and trading strategies.

Lessons:

These are some of what can be learned from James:

    1. There are many profitable short sellers like James Chanos and Tim Knight. These are astute speculators who take advantage of bear markets while some buy-and-hold investors suffer. When a trading instrument moves south, that signifies that the bears are still willing to continue selling the seemingly undervalued market. Some of the profitable sell trades are also taken from bear markets that are already established; from the markets some people think are too cheap. Permabulls invariably suffer in weak markets – a stupid experience in such markets. In these weak markets, the permabulls pay dearly for prices that drop like stones. Why must you suffer in a bear market? You mustn’t suffer at all when you have strategies that work in bull and bear markets. Of course, James also buys some stocks. He’s sometimes bullish on stocks, with commendable success. 


    1. Like James, you’ll do yourself a favor as you make intensive research into stocks you’re interested in. By doing this, you’ll get an insight into to the probable reality that may affect your predetermined direction. Once your positions are open, you may want to hold them for as long as the markets are in your favor. James holds his positions for the long term also. The big profits are to be made in the long-term.

    1. Sometimes, you may be correct in the long-term, but incorrect in the short-term. As a position trader or an investor, there are trade management techniques that can save you from being stopped out abruptly.

    1. According to James, you need to be able to weather being told you’re wrong all the time. Critics may be jeering at you when your forecasts go wrong, but never mind. As long as your method has positive expectancy and you make more gains than you lose, you’ll be fine.

    1. Don’t be carried away by the noise the media make. When I was still a rookie, I checked several websites for technical and fundamental analyses on the instrument I wanted to trade. In most cases, I got lost among conflicting opinions. Even, when I seemed to conclude that most analysts were saying the same thing, I still lost on the trade I made based on it. Don’t worry about the noise in the market, even if you listen to it.

    1. It’s better to start trading when one is a young man or woman. It was a regret that I started trading in my early 30’s, not in my early or late 20’s. In my article titled “Teach Your Teens the Art of Trading,” I mentioned some of the benefits of learning trading early in life. This is why some traders like Joe Ross, Anton Kreil, Peter Soodt, Kenneth Fisher, etc. became financially free early. Elderly people can also learn trading and attain success in the market, but it’s far better to do so when one is still young. This is what James says further concerning this fact:  "Life intrudes -- as when you get older you end up with more responsibilities and your ability to take risk diminishes.  If you are 25 and have a great idea and you fail, no one is going to hold it against you, and future employers and investors might actually look favorably upon it. So if you really want to pursue something, do it while you're young — you'll have more energy and you'll be able to take more financial and career risk. If it doesn't work, you still have your whole life ahead of you."  Chanos thinks that if you have to take risk, take it early in life. Nevertheless, it’s never too late for me; it’s never too late for you.

Conclusion: The bulls and the bears make the market what it is. Hence, the bulls and the bears are watching one another with suspicion and each group is ready to take advantage of the other group’s stupidity.  When the market experiences a roll-down, its existence may be transient, but the intensity may be great enough to make the bears wealthy.

This article is ended by a quote from James. The quote above is also from him:

"There’s a big difference between a long-focused value investor and a good short-seller."





Learn from the Generals of the Markets: Market Generals

Tuesday, November 25, 2014

Optibiotix Makes Substantial Gains

Optibiotix stock (LSE:OPTI) has gone upwards significantly and it is expected that the substantial gains made by the bulls would be sustained. In this market, short-term pullbacks should be seen as another money making opportunities by the bulls. When speculating on a new bias, what you think is a new bias may simple be a transient retracement amidst the existing protracted bias.

4 EMAs are used for the 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. The EMAs 10, 20 and 50 have been sloping upwards as price stays above them. This means that the stock has made serious gains as it breaks upwards from the long-term base that had been building for several months. Price is now crossing the EMA 200 to the upside. As it closes above the EMA 200 (a Golden Cross), it would be the beginning of a new bullish era in the market. Price may eventually reach the resistance level at 30.00.

Nevertheless, in the art of speculation, your willingness to stake your money also goes with the possibility of making gains. Transient retracements may preclude some from taking advantage of the opportunities offer by those retracements. The majority are therefore looking for retracements that hold out long enough. When these happen following consolidating phases, it is either the speculator takes advantage of it or misses the move.

This forecast is ended by the quote below:

“Trading is not a path to easy money; profits must be earned through homework, discipline, courage, patience, and perseverance in the markets.” – Rich Trader (by Steve and Janna Burns)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Phorm Corporation Remains a Bear Market

Phorm Corporation shares (LSE:PHRM) is a bear market and it would remain so for some time to come. The recent bullish run peaked in September 2014, after which a bearish bias started. Therefore, the last near-term rally that has happened in this month is a good opportunity to sell short and ride the market downwards.

We are not always sure of the validity of our decision when we want to join a new directional movement, but our bravery is often rewarded. Price has gone into the Trendlines and a break below the lower Trendline would mean a sign of the renewal of the bearish outlook. The RSI period 14 is below the level 50, and as a result of this, the only logical thing to do is go to short. Price may reach the accumulation territories at 10.10 and 9.00 very soon.

A directional outlook cannot hold out indefinitely. At last, the outlook ends and as it is always is, and a new directional outlook would start. But an existing directional outlook may last far more than the majority of speculators may expect. Randomly picking tops and bottoms in the markets may eventually backfire.

This forecast is ended by the quote below:

“To others, being wrong is a source of shame; to me, recognizing my mistakes is a source of pride. Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes.” – George Soros

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Monday, November 24, 2014

Trading Signals on JPY Pairs (November 24 – December 9, 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, November 23, 2014

Daily analysis of major pairs for November 24, 2014

The sudden weakness on the EUR/USD on Friday has resulted in a very strong bearish bias. The pair may be weak for the rest of this month, as the EUR continues to be battered. The price closed below the resistance line at 1.2400, and the next target may be the support line at 1.2350.     

EUR/USD: The sudden weakness on the EUR/USD on Friday has resulted in a very strong bearish bias. The pair may be weak for the rest of this month, as the EUR continues to be battered. The price closed below the resistance line at 1.2400, and the next target may be the support line at 1.2350.   


USD/CHF: The sudden strength on the USD/CHF on Friday has resulted in a very strong bullish bias. The pair may be strong for the rest of this month, as the USD continues to be uplifted. The price closed above the support level at 0.9650, and the next target may be the resistance level at 0.9750.     

GBP/USD:  Generally, the bias on the Cable is bearish. It is very much likely that the price would hit the accumulation territory at 1.5600, but it is unlikely that the price would break that territory to the downside. After the price tests that accumulation territory, there could be a rally in the market.

USD/JPY: This currency trading instrument trended strongly last week, but there is now a mild pullback in the context of an uptrend. This proffers a good opportunity to buy, for the bullish bias may still continue till December 2014.

EUR/JPY:  This market trended strongly last week, but after testing the supply zone at 149.00, there was a significant correction – a downward move of close to 300 pips from that supply zone. The downward move was augmented by the weakness in the EUR itself. One needs to note that the overall outlook is still upwards and the price may trend upwards from here.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Friday, November 21, 2014

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

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
The hope of the EURUSD going seriously bullish in this month has been dashed.  The price broke down through one support line and another, as the forlorn bull becomes listless. The price has closed below the resistance line at 1.2400, and it may soon test the support line at 1.2350. With further weakness in the market, the support line at 1.2300 may also be tested.  The only thing that can change the situation is the weakness in the Greenback.

USDCHF
Dominant bias: Bullish   
This pair has been able to shrug off the bearish pulls there were trying to weigh it down. The bearish effort has been nullified and the strength in the market may continue into December 2014. The price has now closed above the support level at 0.9650, threatening the resistance level at 0.9700. That resistance level is now almost yielding and the next target for the bull would be the resistance level at 0.9750.

GBPUSD
Dominant bias: Bearish  
This is still a weak market – with no strong directional movement to the upside or to the downside last within the last several trading days. The accumulation territory at 1.5600 was tested last week and this week: it could be tested again. However, it is unlikely that the accumulation territory would be breached to the downside, and as a result of this, the price might make an attempt to rally anytime.  

USDJPY
Dominant bias: Bullish  
This currency trading instrument is very strong, with a Bullish Confirmation Pattern in the market. Most JPY pairs have the potential to remain strong till the end of this month, so it would be OK to look to buy on dips. The current shallow sale should be seen as another opportunity to go long at a better price. There is a supply level at 119.00, which could be reached and breached as the price resumes its northward journey.     

EURJPY
Dominant bias: Bullish
From the supply zone at 149.00, the EURJPY plummeted by roughly 300 pips, closing below the supply zone at 146.50. The short-term outlook is bearish, but the dominant bias remains bullish, unless the price breaks the demand zone at 144.50 to the downside. A break below that demand zone would mean the end of the bearish outlook on this cross; otherwise the price can still resume its upwards journey.  

This forecast is concluded with the quote below:

“Professional traders and institutional investors… use the odds offered by the markets to secure regular and, in particular, consistent incomes.” – Jens Rabe




Wednesday, November 19, 2014

Being Grateful as Traders

“Education is incredibly important for traders. Traders should look to educate themselves as much as they can along their trading journey.” – James Hughes

In USA, Thanksgiving Day is around the corner. Thanksgiving Day is a national holiday celebrated primarily in the United States and Canada as a day of giving thanks for the blessing of the harvest and of the preceding year. Several other places around the world observe similar celebrations. It is celebrated on the fourth Thursday of November in the United States and on the second Monday of October in Canada (definition source: Wikipedia.org).  This year, Canada celebrated their Thanksgiving Day on October 13, 2014; the US will celebrate theirs on November 27, 2014.

The essence of this holiday is to give thanks. In trading also there are many things we can give thanks for. We tend to complain and fret over the disadvantages we think we face, without thinking of the advantages we enjoy. When we ponder the blessings we enjoy in our trading career (as well as in life), those seeming disadvantages pale into insignificance. 

During my quite time, many reasons to be thankful as a trader came to my mind. Obviously, traders now enjoy great tools and services that were not available to those who were speculating just a few decades ago. Here are some of the reasons to be thankful. There are many more reasons than these. Could you think of additional reasons?

1.      We’re grateful for the opportunity to trade and invest our money.

2.      We’re grateful for good brokers out there who treat their clients fairly.

3.      We’re grateful for funds managers who help us make profits by managing our funds. We’re grateful for great opportunities like copy trading/social trading, winning signals services, etc. which help us make money.

4.      We’re grateful for regulatory bodies that regulate brokers, financial institutions, etc. They make financial markets safer for us to trade. 

5.      We’re grateful for cutting-edge trading platforms, data feeds and other tools that are available to us.

6.      We’re grateful for free and paid education materials that are available to us. We enjoy trading education through various means, including books, DVDs, trading rooms, webinars, etc.

7.      We’re thankful for many career opportunities that are available in the world of trading.

8.      We’re grateful for winning trading systems and software – manual, semi-automated and automated strategies that are at our disposal. There are many strategies out there that work.

9.      We’re thankful for those analytical tools and indicators that are available to us. These things help us to analyze the markets objectively.

10.  We’re thankful for the fact that trading is a fantastic life-style. We can trade anywhere in the world as long as we have access to a good Internet connection.

11.  We’re thankful that the markets don’t discriminate on the basis of nationality, gender, religion, education background, race, tribe, color, etc. The markets are a level playing ground, offering anyone an equal opportunity to be successful irrespective of the aforementioned factors.

12.  We’re grateful that there are many good trading coaches the world over. They help us master various aspects of trading psychology, risk management, positions sizing, trading systems, chart patterns, trend cycles, etc. These coaches are selfless and altruistic individuals who love to help struggling traders. As for me, when the going was tough and I wanted to quit, I was inspired by successful coaches who made me realize that there are people who’re making consistent profits and that I can be successful too. 

13.  We’re thankful for the riches and financial freedom the markets proffer. Many people have made billions of dollars as traders and some of them are among the richest individuals on this planet. You mayn’t become a billionaire (or even a millionaire), but you can become financially free and live a fulfilled life. I define financial freedom as being able to meet your basic needs and still save money for future use.

14.  We’re grateful for the availability of positive expectancy – which makes us make money regardless of occasional losses. If there were someone who can’t lose in the markets, that person would soon have all the money in the world.   We do the right things to get the right results. The secret to trading success is in controlling your losses and adding to your winners.

15.  We’re grateful that the markets don’t offer short-cuts to lasting success. More haste in trading is equal to less speed. Short-cuts are very dangerous. Those who take short-cuts are trying to dodge realities, but realities will face them eventually.

16.  We’re grateful for the movement and liquidity present in the markets. Super rich individuals don’t seek to double their portfolios overnight. Instead, they seek slow and steady returns (which translate into great wealth over time).  Retracements in the markets can be played by any trader, since they reflect smoothing of positions by large financial establishments. The smoothing of positions by large financial establishments sometimes cause contrarian movements in the markets, which are sometimes called significant rallies or dips.

17.  We’re thankful that we’re free moral agents who can choose what our fate will be. Being active in the markets is a matter of interest and choice. When you’re interested in something, no-one needs to beg you or persuade you constantly before you do it. You’d even be willing to spend your time, resources and energy in order to master what you’re interested in. But if you aren’t interested in something, you won’t do it no matter how much noise is made about it, even if you’re persuaded again and again.

The list can go on… The tools and services we enjoy as traders ought not to be taken for granted. Can you think of any other reasons we should be grateful as traders?

Conclusion: We wish Americans a peaceful, blissful and rewarding Thanksgiving Day celebration. At the same time, we are grateful for wonderful opportunities the markets offer us. Yes, there are many reasons to be grateful as traders. When you taste success in your trading career, you’ll be hooked, and as such, you’d do well to strive for permanent success, not temporary success. May you become a successful trader.

I end this article with the quote below:

“Remember, trading from your highest and best self is all that matters to getting your desired trading results.” – Dr. Woody Johnson



Learn from the Generals of the Markets: Market Generals




Tuesday, November 18, 2014

Virgin America Stock – a Promising Market

Virgin America stock (NASDAQ:VA) is a promising market which may make substantial gains within the next several months. The price may go upwards consistently irrespective of pullbacks that are expected occasionally.

A pullback is a normal part of market movements. It is not a bane – it is rather a blessing to skilled traders.   Significant rallies are followed by serious pullbacks. When a price moves seriously in one direction, that means trend followers have made gains. These profits would also be transferred to other market speculators who are also smart.

In the chart, the price is above the Simple Moving Average (SMA) 20 and the Commodity Channel Index (CCI) is now trying to slope upwards. This means that it is logical to seek long trades, for short trades are not currently logical. This is the explanation for the expected bullish run in the market, though some pundits tend to find fundamental reasons for every price action.

Virgin America stock may reach the distribution levels at 50.00 and 80.00 within the next several months.

This forecast is ended by the quote below:

“You are unable to take risks because you fear failure. You tend to hold back rather than make new discoveries. Trading is a profession where you must take risks and explore new market opportunities.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



“Learn From the Generals of the Markets” – Almost Free Copies Now Available


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How true is this statement! When you hang out with those who hate trading, those who’ve been floored by the markets and sworn not to have anything to do with the markets again, those who’re afraid of the challenges the markets offer, those whose job is to discourage you from attaining your goals in life, you can’t become successful in the markets.

We need to surround ourselves with successful traders or at least, read about them, plus the principles that can be learned from them. The 20 generals of the markets featured in this book below will inspire you and reveal the principles behind their success. You’ll do yourself a great favor when you buy the eBook; now at a giveaway price.

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Monday, November 17, 2014

Gold and Silver: Have Thanksgiving Rallies Started?

GOLD (XAUUSD)
Dominant Bias: Bearish
On Friday, November 14, 2014, Gold bounced upwards. That was a break from the equilibrium zone that was formed last week. The upwards bounce was strong enough to threaten the existing bearish bias. In the US, Thanksgiving Day is on November 27, 2014. As usual, it would be the 4th Thursday of the month of November. What is unique about this period is that Gold tends to rally around the period – with a high degree of accuracy. If you check the historical data of Gold around the Thanksgiving Day, you would see that Gold tended to rise in the middle of November every year. While this is not correct for all the past 12 years, it is correct for most of those years. Interested ones may look forward to going long on Gold today or tomorrow, setting a stop of 200 points below the entry price, with a target of 600 points. Usually, the rally has a tendency to start about several trading days before Thanksgiving Day.


SILVER (XAGUSD)
Dominant Bias: Bearish 
The Thanksgiving rally may also happen on Silver (though Gold is the main focus), for it often goes in the same direction with Gold. Last week, the price moved sideways, forming a base in that week. From that base, the price broke upwards in conjunction with Gold. That upward break was significant enough to put the existing bias in jeopardy and the current weak pullback may offer a good opportunity to go long, as a stop of 200 points and a target of 600 pips are set.   


  
Learn from the Generals of the Markets: Market Generals

Sunday, November 16, 2014

Daily analysis of major pairs for November 17, 2014

The Cable dropped by roughly 300 pips last week, testing the accumulation territory at 1.5600. There is now a shallow upwards bounce from that territory, which should be short-lived as the Cable continues to be weak. Any movement above the distribution territory at 1.5800 would seriously threaten the bearish outlook.

EUR/USD: The outlook on this currency trading instrument remains bearish, but the existing price action is a threat to the bearish outlook. A movement above the resistance line at 1.2600 would mean that it is no longer logical to seek short trades. There is a support line at 1.2400.


USD/CHF: This currency trading instrument closed at 0.9590, On Friday, November 14, 2014. The price action is a threat to the bull, especially when the price goes below the support line at 0.9550. However, some would think of buying pullbacks on this instrument, provided that the price does not go below the aforementioned support line.   

GBP/USD:  The Cable dropped by roughly 300 pips last week, testing the accumulation territory at 1.5600. There is now a shallow upwards bounce from that territory, which should be short-lived as the Cable continues to be weak. Any movement above the distribution territory at 1.5800 would seriously threaten the bearish outlook.

USD/JPY: The USD/JPY moved upwards by over 250 pips last week. Obviously, the JPY is very weak and this is aiding the bullish runs on most JPY pairs. The strength in this pair could continue this week, and therefore, it would be nice to look for how to go long when there are transient pullbacks in the market.

EUR/JPY:  This cross enjoyed a nice bullish run last week, going upwards by over 300 pips. The EUR particularly is making serious attempts to go further upwards and as such, this pair may continue trading upwards, reaching the supply zone at 146.50.  

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group




Friday, November 14, 2014

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

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
The outlook on this pair remains bearish, but it is now in a precarious condition. There was a significant bullish effort on Friday, and the bearish outlook may be put in a serious jeopardy when the price manages to go above the resistance line at 1.2600. As long as the price is below that resistance line, the bearish outlook may be valid. However, when the price breaches that resistance line to the upside, it could be the beginning of a medium-term bullish trend, which may hold out till early December 2014.   

USDCHF
Dominant bias: Bullish   
This currency trading instrument is also bullish – though that bullish outlook is now seriously threatened. The market traded largely sideways within the last several trading days and later broke out in favor of the bears. While some may think of buying low, any movement below the support level at 0.9550 would mean that it is no longer sensible to seek long trades. This would happen especially in the face of the increasing stamina in the CHF.  

GBPUSD
Dominant bias: Bearish  
This is a weak market. The GBP is now weak against most majors. The market dropped seriously this week, testing the accumulation territory at 1.5600, before the existing shallow upward bounce. With further weakness in the GBP, that accumulation territory may be tested again: it may even be breached to the downside. On the other hand, the Cable may also try to go into the normal positive correlation with its EURUSD counterpart, and in that case, a moderate transitory rally may be seen.

USDJPY
Dominant bias: Bullish  
The USDJPY remains bullish as a result of the marked weakness in the Yen. This is evident on most other JPY pairs, and this uptrend may continue for the rest of this month. The best thing to do now is to look for buying opportunities when things go temporarily on sale in the context of the extant uptrend.      

EURJPY
Dominant bias: Bullish
This cross was able to trend further higher recently; a bias which is expected to continue. Since last month, the cross has trended upwards by more than 1000 pips, for the Bullish Confirmation Pattern in the market is getting stronger and stronger.  While the demand zone at 144.00 ought to be watched, the supply zone at 147.00 is a now potential target for the bulls.

This forecast is concluded with the quote below:


“Forex trading capitalizes on smooth, clean and consistent trends while mitigating risks. Currency price charts have many advantages in areas where you find drawbacks with stocks.” – Dr. Van K. Tharp



Thursday, November 13, 2014

Israel Englander: Attaining Permanent Success in the Market


LEARN FROM THE GENERALS OF THE MARKETS - PART 55

"When you are trading, trade the truth. Truth is the only safe ground to stand on." - Old Trader

Israel Englander (sometimes called Izzy) was born in 1948, in New York City, USA. He’s a Hedge Fund guru. He was raised in a Jewish family - his parents were Poles who immigrated to the States after they left a Soviet labor camp.  Israel got fascinated with the markets when he was in high school. He earned a B.S (finance) from New York University in 1970. Later he applied for an MBA program at the same University and he was accepted, but he didn’t finish his studies.

Before he enrolled for the MBA program, Israel worked at Kaufmann, Alsberg & Co: a Wall Street Firm. He and his partner John Mulheren Jr. founded an investment firm, which was called Jamie Securities Co. in 1985. The Belzberg family of Canada was a major investor in the firm, having contributed about $75 million. Mulheren was convicted of facilitating unlawful trading practices for Ivan Boesky (who was also a professional trader). Israel was never implicated with Mulheren's wrongdoings, but the lawsuit caused a very bad reputation that damaged Jamie Securities. The firm was shut down.

Israel and Ronald Shear founded Millennium Partners in 1989, with seed money of about $35 million. The beginning was very rough for the firm and as a result of this, Ronald Shear left the business. From that time on, Israel has made the firm achieve success, growing it into a very big hedge fund that is worth billions of dollars. Rather than charging a fixed management fee per annum, Israel shares trading expenses with his investors.

Now Millennium Management LLC, the firms uses several unique strategies to achieve their goals. It got about 900 employees and 12 offices.  It’s one of the most successful hedge funds in the world. The firm trades with over $21 billion. In March 2014, Israel was worth $3.3 billion dollars. He’s been very generous to Jewish schools and organizations. He’s married to Caryl Englander and they’ve 3 children.

Lessons
Here are some of the lessons you can learn from Israel Englander:

  1. Never give up when you face challenges in your career. When Israel and Ronald Shear founded Millennium Partners in 1989, things were not encouraging then. Ronald even left him. Before all these, the Jamie Securities he co-founded was dissolved. These things were enough for chickens who’d rather go back into their comfort zone. Nevertheless, Israel kept on, rather than giving up and he ended up being the boss of one of the biggest and most successful hedge funds around. 

  1. Israel is a good stock picker. He likes to pick promising stocks. It’s what you pick that’ll bring gains for you. How can you find stocks and trading instruments that are really promising? You need to develop strategies that help you do this?

  1. Israel is secretive – even in the world of hedge fund. He doesn’t appear in public, talk to the press, grant interviews, and broadcast his photos. Yet, he’s made billions of dollars from the markets. Really, those things aren’t what would make you a successful trader. In fact, talking publicly about your open trades would have an adverse effect on your psychology because it would put your ego on the line. You don’t have to be the most handsome, the biggest mouth, the greatest orator and the most hyped socialite, before you can become a successful trader.

  1. Israel wasn’t born rich, but he made fabulous money. His riches are self-made. No matter your background and economic class, you can end up making it in life.

  1. Are you often disturbed by your critics? Are your actions decided by what people say about you? It’s a mistake to think you can always answer your critics; plus one of the best ways to fail is to try to please everybody. As a trader, just continue to put out your trading best and let others continue to make the noise. Despite a possibility of a hedge fund scandal and allegation of fraud affecting one of the traders at Millennium, Israel told his top employees that they shouldn’t pay attention to what they saw in the press, but they should focus on making profits so that they could keep their jobs.

  1. Israel’s Millennium has been doing great consistently. It makes an average of 17 per cent returns per year: that certainly beats the bank. Good results were achieved when the markets were seriously unfavorable to the bulls and when the markets were seriously favorable to the bulls. With only a profit of one per cent per month, you can become rich in the long run – not only when you make 50% per cent (that’s a recipe for financial disaster). You can also make money in bull and bear markets. 

  1. Like Israel, it’s possible to attain permanent success in the market if you’ve strict risk management and realistic goals. At Millennium, trading is treated as serious business and no nonsense is allowed. There are many traders working for the firm and they must make money in order to retain their jobs. Each trader must also not experience drawdowns that go below the predetermined level, otherwise she/he is dismissed. On the other hand, traders who perform well at the firm would be given more money to trade with. Prudent trading firms also employ effective risk control principles so as to ensure that they continue to enjoy everlasting triumph. By defining your maximum risk per trade, maximum roll-down per week or month (after which you temporarily stop trading for a while) and other risk control techniques like trailing stops, you survive the vagary of the markets. 

Conclusion: Formal education can’t help protect our accounts as risk control principles can. Our discipline and sense of responsibility help us avoid approaches that can endanger our portfolios. When we started trading, we faced some recalcitrant challenges. If we’d done the right things from the beginning, the results could have been different. In order to move forward as traders, we try to focus on what we still have rather than what we have lost.

The quote below, which ends this article, is attributed to Israel:

“Here's a chair and computer — go trade.”



Learn from the Generals of the Markets: Market Generals

Tuesday, November 11, 2014

Keep on Selling Gulfsands Petroleum!

Gulfsands Petroleum shares (LSE:GPX) have been falling and it would be logical to keep on selling them. As the shares fall further, buyers are being hit repeatedly because they refuse to honor the power of the bear at the moment. The viper does not tolerate insults.

In the chart, the ADX period 14 is around the level 20, meaning that the momentum in the market is very low. But the momentum would soon become strong. The DM- is slightly above the DM+, showing that buyers are being caught on the wrong side of the market flow. The MACD (default parameters) has both its signal lines and histogram below the zero line.

Essentially, there is a Bearish Confirmation Pattern in the chart – which would become particularly strong as the ADX line rises above the level 30. The price may thus end up reaching the support level at 20.000. Some may contend this possibility. However, you do not need to be a pro before you contend trading facts. This does not mean we cannot be wrong, but it means we would come out victorious. We do not worry about inevitable negativity as long as we come out victorious in the long run.

This forecast is ended by the quote below:

One of my broker/trader friends wins only 27% of his trades, but makes lots of money every year. It's daunting to think about it, but you may see many more failures than successes on your way to becoming a seasoned, master trader.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


Central Rand Gold Experiences a False Breakout

The spike on Central Rand Gold stock (LSE:CRND) could mean a false breakout if the price is not able to keep on going north. There has been a strong sideways movement for several months, resulting in a strong base. During that period, the market was trying to consolidating to the downside: prior to the current strong breakout.

The false breakout reached the distribution territory at 35.00, before the current bearish retracement. The EMA 21 has the price already far above it as the Williams’ % Range period 20 starts its journey into the overbought area. Nevertheless, we need to proceed with caution. The price would be a real false breakout if the market fails to go above the distribution territory at 35.00. In that case, the price may hit the long-term base at the accumulation territory of 9.60 again; otherwise, we may see the start of a long-term northward bias, fuelled by relevant fundamentals.

Truth sounds like rubbish. This kind of market is difficult to trade because it could be a false breakout as well as the beginning of a new uptrend. Price actions come with stubborn challenges. How can we now keep trading challenges and setbacks from destroying our determination? Trading is a serious business; and Reginald Mengi says one of the secrets of success in business is to see problems as challenges and see opportunities in those challenges.

This forecast is ended by the quote below:

“Experienced traders know how to take losses and setbacks in stride. They don't mull over past defeats, or trading losses. They see a setback as an opportunity to improve their skills, and grow. They examine what they did wrong, learn from their mistakes, and view a temporary setback as a launch pad from which to achieve higher future performance” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Monday, November 10, 2014

Trading Signals on the EUR Pairs (November 12 - 25, 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

Trading Signals on CHF Pairs (November 10 – December 4, 2014)


AUDCHF = Sell

USDCHF = Sell

EURCHF = Sell

CADCHF = Sell

CHFJPY = Buy

GBPCHF = Sell

NZDCHF = 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


Sunday, November 9, 2014

Daily analysis of major pairs for November 10, 2014

The USD/JPY tested the supply level at 115.50 several times, but it was unable to break it to the upside. There is an existing bearish pullback in the market, which could be challenged at the demand level of 113.50. Any movement below that demand level may put the bullish outlook in a precarious situation.

EUR/USD: This pair is still a weak market, but there is a good possibility that the pair may rally this week. This may happen as a result of the EUR becoming strong versus some other popular currencies, including, of course, the USD. This may happen this week or next week, and therefore we are looking for a rally here.



USD/CHF: This currency trading instrument closed at 0.9660 (on Friday, November 7, 2014). The price closed lower in the context of a downtrend. Some may see the bearish correction as another opportunity to go long, provided that the price would not go below the resistance level at 0.9600. That is a level where long trades may no longer be sensible.

GBP/USD:  The Cable dropped by 200 pips last week, testing the accumulation territory at 1.5800 before bouncing upwards beyond the accumulation territory at 1.5850. For the bearish trend to continue, the accumulation territory at 1.5800 would be tested again; otherwise the price may go above the distribution territory at 1.5950.

USD/JPY: The USD/JPY tested the supply level at 115.50 several times, but it was unable to break it to the upside. There is an existing bearish pullback in the market, which could be challenged at the demand level of 113.50. Any movement below that demand level may put the bullish outlook in a precarious situation.

EUR/JPY:  This market moved sideways in the last few days of the last trading week, on a consolidation note. The market is consolidating in the context of an uptrend. Any movement above the supply zone at 143.50 would signal the renewal of the bullish trend, but any movement below the demand zone at 141.50 would put the uptrend in jeopardy.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Saturday, November 8, 2014

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

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
The outlook on the EURUSD remains bearish as the market dropped below the support line at 1.2400. Since then, the market has bounced upwards a little, closing almost above 1.2450. While the price could hit the support line at 1.2400 again, it is now more likely that the EURUSD would rally next week or after that, especially when the market crosses the resistance line at 1.2600 to the upside. The bias would have turned bullish by then.

USDCHF
Dominant bias: Bullish   
This currency trading instrument is now bullish, but things may not be so by the end of next week or after that. It is possible that the bulls may manage to push the price further upwards to the resistance line at 1.9750, but it is not likely that the price would go above that resistance line – at least for the time being. The price has being corrected lower (which some may see as an opportunity to go long). Should any strength develop in the CHF, which is expected to become strong next week or after that, the USDCHF would fall towards the support level at 0.9550.

GBPUSD
Dominant bias: Bearish  
The Cable trended downwards last week, dropping by more than 200 pips. The price hit the accumulation territory at 1.5800 before the recent weak rally. With further strength in the Greenback, the Cable could fall below that accumulation territory, but there is a possibility of the currently weak rally becoming stronger, therefore taking the price towards the distribution territory at 1.6000.  

USDJPY
Dominant bias: Bullish  
This pair remains strong, with the Bullish Confirmation Pattern on it. The price went far beyond our weekly target and managed to test the supply level at 115.50, before turning a bit lower. With any stamina in the market, the supply level could be hit again. There is a demand level at 113.50, which is supposed to be a barrier to the bears’ effort, but the bullish outlook would be threatened when the price drops below the demand level at 113.00.     

EURJPY
Dominant bias: Bullish
The market closed at 142.72, on Friday, November 7, 2014. The market has been moving sideways for a few days. The overall trend is bullish, which may make the market remain bullish as a result of the Euro making effort to gain strength.  On the other hand, the bullish effort may be rendered useless on this course when the Yen possibly gains a measure of stamina.

This forecast is concluded with the quote below:


“Trading is a fantastic life-style. I can live and trade anywhere in the world… As long as I’ve a solid Internet connection, let’s go!” – Dr. Alexander Elder





Thursday, November 6, 2014

Emotions that differentiate between losers and winners

“After placing the orders, we leave the rest to the market forces.” – Sam Evans

Good traders make a new trade regardless of the outcome of the last trade. However, rookies often allow irrational emotions to guide their actions when they are making trading decisions.  Why are some traders always frustrated while others play the markets joyfully? Let’s read some cogent examples.

1.      The bad trader is afraid to make a new trade because of the fear that it may lose. This fear comes regardless of the fact that the setup may be flawless and there’s no reason not to trade the setup. On the other hand, as long as the entry criteria are met and there’s no reason not to enter the trade, the expert wouldn’t hesitate to take the trade.

2.      The bad trader tends to be fatalistic in outlook, thinking that trading is a scam or that permanent success isn’t attainable. On the other hand, there are more than enough proofs that trading success is possible, plus permanent success. The expert always keeps their chin up. When facing roll-downs, the expert knows it’s a fleeting experience.

3.      While there is no reason not to trade a setup, the bad trader feels that a trade setup needs much more time to consider before an execution is made. She/he wants lots of confirmation and guarantee before opening a trade, without knowing that one can trade the best setup and still lose.

4.      I was doing it before; I used to check several different websites for fundamental, sentimental, and technical confirmation before I took a trade. I wanted to be sure that most pundits were saying the same thing before I took a trade. Needless to say, I still lost in spite of my painstaking effort. The expert trader is satisfied with the limited information she/he has access to.

We don’t need to look for complicated analysis or think that there must be a million reasons supporting a setup, before we trade the setup. No matter how beautiful a strategy is, it would still sustain occasional losses.  You may think that a particular trading methodology is wonderful, but when it goes thru baptism of fire in charting effort, we’d see how it can survive. When risk is under control and the performance is enhanced, the results can then be optimized. When a position first goes in our favor before reverting to the opposite route, we can get out without sustaining any loss on that trade. 

Irrational emotions are the reasons why the bad trader is worried while trading, getting frustrated or hesitating to take a trade and eventually missing a great trade or sustaining huge negativity in the markets. Rational emotions are the reasons why the expert trader is calm when trading – being profitable overall.

We evaluate the motion in the markets as money-making opportunities and when we consider the cost of each trade (particularly low spreads), we’d appreciate the benefits over time. We’ll only consider the probability of making money after we also put spreads into consideration. Since there is a cost for each trade, we wouldn’t want to overtrade.

The quote below ends this article:

“Strange as it may seem to some, my trading has evolved to a point where I no longer attempt to predict whether stock prices will rise or fall… I found that most of my profits came as result of simply cutting off trades that were either losing or giving up their previous gains; and I could profit from trades entered practically on the flip of a coin.” - Chris Ebert


Source: www.tallinex.com 

Learn from the Generals of the Markets: Market Generals
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