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Tuesday, December 30, 2014

Trading Signals for NZD Pairs (December 30, 2014 – January 14, 2015)

NZDUSD = Buy

NZDJPY = Buy

NZDCAD = Buy

NZDCHF = Buy

EURNZD = Sell

GBPNZD = Sell

AUDNZD = 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


Monday, December 29, 2014

Has End of the Year Strength Begun on Victoria Oil and Gas?

Victoria Oil and Gas shares (LSE:VOG) have begun going upwards in what can be called the end of the year rally. The recent bias was bearish and price dived further downwards this month before further bearish movement was rejected. Since then, the price has moved upwards seriously, with an up-gap that pushed the price higher.

The ADX period 14 is not very high, meaning that there is still much room for the current buying pressure to move on. The DM+ is above the DM-, which means the bias is bullish. The MACD (default parameters) has its histogram above the zero line. With a continuation of the current price condition, the MACD signal lines would also cross the zero line to the upside. This would result in a Bullish Confirmation Pattern, and thus, price would end up reaching the supply level at 80.00.

We have a bullish outlook on Victoria Oil and Gas. Strategies use historical information to generate signals; plus price conditions are not stable. Short-term predictions may tend to be inaccurate, but over the long term, good gains can be made.  As a result of this, serious speculators spend much energy and resources to lessen their trading errors. Trading truth is simpler than you think.

This forecast is ended by the quote below:

Traders have to make financial decisions under conditions of uncertainty and be able to cope with the results of their outcomes.” - Steve Ward

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals


This Is What Is Happening on Oxus Gold

Oxus Gold stock (LSE:OXS) is an extremely volatile market where it seems the price is consolidating. A closer look reveals that the bulls appear to be having upper hands at the moment and therefore, the price could go upwards.

The price is currently above the EMA 21 and the Williams’ % Range period 20 is around the overbought territory. This proves that the price has a good possibility of moving upwards when it becomes directed towards a clean bias. The price may reach the resistance level at 2.5 eventually. Should this stock break out further northward in a determined way, we would like to ride it. Most of our gains would be realized from fewer winners out of all our trades. Traders can make many negative trades, and sadly fail to make some trades that can help them recover their losses. There are times when we make much money and there are times when we do not make money (neither would we lose money). Those who take advantage of setups that bring negativity may quit when they see setups that may bring winners.

This forecast is ended by the quote below:

“It soon becomes apparent that you will have to give something in order to gain something Golden ratio, proportionelse. This may sound rather like a paradox when applied to trading, but it holds true.” - Mercedes Oestermann van Essen

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Sunday, December 28, 2014

Daily analysis of major pairs for December 29, 2014

The USD/JPY closed at 120.31, on Friday, December 26, 21014. This pair trended upwards last week before it consolidated towards the end of the week. The bias is bullish and the supply level at 12.50 would soon be breached to the upside; after which another supply level at 130.00 would be challenged.

EUR/USD: This market fell further last week, closing below the resistance line at 1.2200. The next target for the price is at the support line of 1.2150, and should that support line be breached to the downside, the price may then target another support line at 1.2100.


USD/CHF: This market rose further last week, closing above the support level at 0.9850. The next target for the price is at the resistance level of 0.9900, and should that resistance level be breached to the downside, the price may then target another resistance level at 0.9950. Could the USD reach parity with the CHF? It seems very likely.

GBP/USD: This currency trading instrument went downward last week, but further downward movement was rejected as the price bounced upwards from the accumulation territory at 1.5500. Now hovering around the accumulation territory at 1.5550, further upward bounce could be contained at the distribution territory at 1.5600. Meanwhile, the price could fall down again, testing the accumulation territory at 1.5500.

USD/JPY: The USD/JPY closed at 120.31, on Friday, December 26, 21014. This pair trended upwards last week before it consolidated towards the end of the week. The bias is bullish and the supply level at 12.50 would soon be breached to the upside; after which another supply level at 130.00 would be challenged.

EUR/JPY:  This cross should be bullish – just like certain JPY pairs. However, the weakness in the EUR is too much to allow any significant bullish move. There is a possibility that the demand level at 146.00 could be tested, though a rally may cause the price to reach the supply zone at 147.50.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


Saturday, December 27, 2014

Weekly Trading Forecasts on Major Pairs (December 29, 2014 – January 2, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
EURUSD trended downwards last week, closing below the resistance line at 1.2200. Since the recent bullish attempt was rejected at the resistance line of 1.2550, price has dived by over 360 pips, resulting in a very strong Bearish Confirmation Pattern in the market. The bearish bias may continue till the end of this year, enabling price to test the support lines at 1.2150 and 1.2100 respectively.                  

USDCHF
Dominant bias: Bullish   
This pair has continues its upward journey in a slow and gradual manner (thanks to the ongoing strength in Greenback). Since the recent bearish pull was rejected around the support level at 0.9550, price has skyrocketed by more than 320 pips, closing above the support level at 0.9850 last week. The next victim of the bulls’ assault is the resistance level at 0.9900, which could even be breached to the upside as price can target another resistance level at 0.9950, especially with the continuation of the strength of the USD. Could the USD ultimately reach parity with the CHF? This seems likely.

GBPUSD
Dominant bias: Bearish
This is also a bear market. It fell towards the accumulation territory at 1.5500 before the current upward bounce happened in the market. Price is currently hovering around the distribution territory at 1.5550, not being able to go far above it at the present. Price may go south from here, testing the accumulation territory at 1.5500 again. Technically, further upward bounce may be rejected at the distribution territory of 1.5600.

USDJPY
Dominant bias: Bullish  
This is a strong currency trading instrument, supported by the Bullish Confirmation Pattern in the market. Price trended upwards last week and consolidated till the end of the week. Being above the demand level at 120.00, further northward movement is expected here – which can continue into January 2015.    

EURJPY
Dominant bias: Bearish
This cross ought to be bullish just like some other JPY pairs, but the weakness in Euro is still very much. In spite of the effort by the bulls, the bears still flex their muscles conspicuously. Price is currently threatening to go down, with the possibility of testing the demand zone at 146.00. Should the bears lose out suddenly, price can try the supply zone at 148.00.

This forecast is concluded with the quote below:


“One thing that never changed was my need for inner freedom. I believe to this day that trading is the most interesting vehicle to enjoy ultimate freedom. I am not only talking about financial freedom. That’s a mere bagatelle in comparison to the emotional freedom I received as a present along the trading way.” - Mercedes Oestermann van Essen


  

Thursday, December 25, 2014

Janet Yellen Can Ruin Your Portfolio

“Greed is one of the cardinal sins in trading.” – Maite Krausse

Janet Yellen assumed office on February 3, 2014, as chairwoman of the Federal Reserve (the central bank of the US). Going back to the topic above, this isn’t to say that Janet will take control of your portfolio and ruin it. However, the Fed can make decisions and take actions that can have negative (or positive) effects on your investment. The Fed’s assets are worth trillions of dollar. In my opinion, the office of chair of the Fed is more important than the office of MD of the IMF (the International Monetary Fund), and that’s why decisive actions taken by the Fed have far-reaching effects on the markets – far more than the decisive actions taken by the IMF.

The Chair of the Fed is more powerful than the MD of the IMF. Janet is the main decision maker, for the Fed can’t take a major action without her approval. One of such major decisions was pumping dollars into the American economy (quantitative easing), which was going on for several years. This was done to help the economy grow, though the growth was slower than expected.  The Fed regulates banks, but most of their top executives are academics rather than bankers. The Fed is independent. Even the US congress cannot control it because their independence is respected, just like other rights spelt by the U.S. Constitution. Unlike some Federal officials and secretaries, the Fed officials aren’t told what they do; not even President will tell them what they do.  The Fed decides to spend money according their powers. They keep interest rates minimal in order to encourage loans, which in turn may provide stimulus for an improved economy. Most speculators are affected by the Fed decisions – whether they know it or not.

As far as inflation, unemployment, banks and other important issues are concerned, The Fed can take any actions. Janet can approve or disapprove bank mergers. Apart from banks, she can even regulate financial institutions (under Dodd-Frank). She’s even been given powers to regulate big insurance companies. One thing, nevertheless, must be noted. The Fed isn’t infallible. They can make decisions which can have adverse effects on the US economy and the market. Some of their actions, like quantitative easing, have not brought the ideal results. It’s possible that things can even turn out better without the Fed, but they’ll continue taking actions while hoping that things would become better. 

The decisions taken by Janet can have serious effect on your investment, whether you’re an American or not. Those decisions can ruin your portfolio or help it to grow. Recently, the Greenback has been very strong, and the strength has been ongoing for several months, making that currency the strongest around. As a result of this, Gold, Silver, Euro, Aussie, and others have been under serious bearish pressure. The protracted strength in the Greenback has caused various protracted effects in the Forex markets: USD pairs have been strong or weak, depending on whether the USD is the base or counter currency of each pair.

Janet Yellen Can Make Your Portfolio Grow
Let’s take USDJPY for example. Since July 2014 until the time of writing this piece (December 2014), the pair has gone upwards by over 1800 pips, making it one of the strongest existing trends in the Forex markets. The simple reason for this is the great strength in the USD and great weakness in the JPY. This great trend has made trend followers realized lots of profits, while those who‘ve gone against it have been sliced up.

If a good trader is caught in a wrong side of a great trend like this, she/he quickly truncates his position. If caught in the right direction, a good trader would also capitalize on the trend by riding it. If caught in a wrong direction, a bad trader would continue to run her/his loss until a margin call is received. After you bet all your account in one single trade and things go contrary to your expectations, you may want to smooth the adverse position. As Dr. Peter Putz pupts it, after all, a miserable end is preferable to misery without end.  If a bad trader is caught in the right direction, she/he will quickly exit the position with a small profit, based on the fear that the trend would soon reverse.

Janet Yellen isn’t, and can’t be held responsible for the effects her decisions have on your portfolios. You make your trading decisions and bear responsibility for them, whether the outcome is positive of negative. The trend that has brought big losses to some people has also brought big profits to some people. Such is trading and such is life.

It doesn’t matter whether Yellen was dovish or hawkish. Even a wonderful trading idea can become a flop without you knowing why, but determined traders can make money in the markets no matter the actions taken by the Fed. In the current market conditions (and the future market conditions), you can make it.

We open trades and then allow the forces in the markets to work in our favor.  We should continue to stick to our good strategies in spite of occasional losing streaks, unexpected events, crashes and good signals. The good strategies would eventually bring profits.

Conclusion: No matter how complicated you make your chart analysis, it doesn’t translate to consistently huge profits. When you forfeit a fortune in the markets, you’ll either swear not to trade again or become more determined to do all you can to become successful in this business. Losses are good in that they teach you valuable lessons that make you become a better speculator.

This piece is ended by the quote below:

“Only fools think they know it all. Investing is a lifelong education and its teacher is loss. I will continue to have losses and make mistakes, but I can continue to increase my success rate, and most important, decrease the time it takes for me to realize I made a wrong decision.” – Ian Cassel




Learn from the Generals of the Markets: Market Generals


Wednesday, December 24, 2014

Trading Signals for JPY Pairs (December 24, 2014 – January 23, 2015)


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

Tuesday, December 23, 2014

Trading Signals for EUR Pairs (December 24, 2014 – January 15, 2015)

EURUSD = Sell

EURCAD = Sell

EURAUD = Sell

EURNZD = Sell

EURJPY = Sell

EURCHF = Sell

EURGBP = 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

Monday, December 22, 2014

Tern Is Now a Fertile Market for Buyers

Tern stock (LSE:TERN) is ripe for a northward movement and buyers would be wise to capitalize on that. Price broke upwards from the recent base (an equilibrium zone in the market), as it trends northward significantly.

The price broke out of the upper Trendline. Before that, the bulls were making effort to push the price upwards, while still between the upper and the lower Trendline. It is clear that this kind of effort should not be ignored: the cat lies down as though lazy, but its wisdom is great.

The RSI period 14 is also above the level 80, showing a strong uptrend. This also shows that there may be occasional pullbacks in the price, after which the price may go further upwards. The stock may eventually reach the resistance level at 10.00. This movement may be attributed to fundamental events, but technical analysis is used to find a good entry point.  As one expert puts it, technical analysis measures system output, while fundamental analysis merely looks at the input.

This forecast is ended by the quote below:

“You do not need to have an opinion about where the S&P is going in order to trade it successfully, but you need the mental clarity to act on your trading signals with confidence. You need to know your trading set ups and master your set ups and this means mastering yourself, your trading psychology.” - Mercedes Oestermann van Essen

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Stratex International Shares Crash

Stratex International shares (LSE:STI) started crashing at the beginning of this month and this can continue for the rest of the month.  A break below the demand level at 2.00 would result in further strengthening of the bearish outlook.

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 part of the chart. The current position of the EMAs support the extant bearish movement – with the EMA 200 signaling that the bearish trend is the dominant bias. Price is supposed to continue crashing towards toward the demand level at 1.00.

The markets of nowadays require creative approaches. The market conditions several decades ago (with high interest rates and more predictable movements) were really different than the market conditions nowadays.  You do not need a great system to trade this market. Just watch what the market is doing and go with the flow. We tend to look for the Golden Goose system that can give us a huge advantage over many other traders. There is nothing new under heaven and this is also true of trading. It is now clear that certain small scale traders are even more skillful than some institutional traders.

This forecast is ended by the quote below:

“Trading isn't a hobby or an easy way to pay the bills. It is a lifestyle, something you have a passion for. It may take years to master. Not everyone makes it within a few years, but that's all right. As long as you love what you're doing, you'll achieve success in the end.” – Joe Ross

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals




Sunday, December 21, 2014

Daily analysis of major pairs for December 22, 2014

The USD/JPY went upwards last week, following a bearish run that made it go below the demand level at 116.00. The price was unable to stay below the demand level at 116.00 – as it rose steeply above the demand level at 119.00. This market could continue its upwards movement and as a result of that, price could reach another supply level at 120.50.   

EUR/USD: This is a bear market and the bearish movement is supposed to continue this week. From the resistance line at 1.2550, the price dropped by more than 300 pips, closing below the resistance line at 1.2250. The next target to be reached by the price is the support line at 1.2200.


USD/CHF: This is a bull market and the bullish movement is supposed to continue this week. From the support level at 0.9550, the price rose by more than 280 pips, moving close to the resistance line at 0.9850. That resistance level could be breached to the upside, and the next target to be reached by the price is resistance level at 0.9900.

GBP/USD: This is a very volatile market. The volatility is caused by a struggle between the bull and the bear, though the bears have upper hands. With further strength in the Greenback, the price could challenge the accumulation territory at 1.5550.

USD/JPY: The USD/JPY went upwards last week, following a bearish run that made it go below the demand level at 116.00. The price was unable to stay below the demand level at 116.00 – as it rose steeply above the demand level at 119.00. This market could continue its upwards movement and as a result of that, price could reach another supply level at 120.50.  

EUR/JPY:  This currency trading instrument closed at 146.16 on Friday, December 19, 2014, on a bearish note. The price ought to be bullish like some other JPY pairs, but the weakness in the EUR is too much to allow that. Only a movement above the supply zone at 147.50 could mean the end of the bearish outlook.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group




Saturday, December 20, 2014

Weekly Trading Forecasts on Major Pairs (December 22 - 26, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
This pair tested the resistance line at 1.2550 before further upward movement was rejected. From that resistance line, price went down by over 300 pips, closing below the resistance line at 1.2250. This has resulted in a strong Bearish Confirmation Pattern in the market and price is supposed to continued going further downwards this week, possibly reaching the support lines at 1.2200 and 1.2150 respectively.

USDCHF
Dominant bias: Bullish   
USDCHF broke below the support level at 0.9600; but it was unable to stay below that support level. Price moved upwards significantly, moving far above the support level at 0.9800. This has resulted in a strong Bullish Confirmation Pattern in the market and price is supposed to continued going further upwards this week, probably challenging the resistance levels at 0.9850 and 0.9900 successively.

GBPUSD
Dominant bias: Bearish
This is a very volatile market, caused by the ongoing struggle between the bears and the bulls. Looking at the market more closely, it would be seen that the bears are winning the battle gradually and they can maintain their subtle supremacy within the next several trading days.  The accumulation territory at 1.5550 is a formidable barrier to the interests of the bears. However, with a continuation of the strength in Greenback, that accumulation territory could be breached to the downside.

USDJPY
Dominant bias: Bullish  
This currency trading instrument dipped seriously at the beginning of last week, going below the demand level at 116.00. After that, the bulls came in with fury and drove price northwards, making it to go above the demand level at 119.00. The supply level at 119.50 is currently being battered and there is a high chance that it would be breached to the upside, for price might target another supply level at 120.50 this week or next week.   

EURJPY
Dominant bias: Bearish
This cross should normally go upwards; nevertheless, the weakness in EUR is too much to allow any significant bullish movement. In spite of desperate effort by the bulls, the outlook remains bearish. The demand zone at 145.00 has a high chance of being challenged, even if there would be a rally after that.

This forecast is concluded with the quote below:


“How do you make money in the market? It’s not by predicting.  Instead, it’s by watching what the market is doing and then going with the flow.” – Dr. Van K. Tharp


  
Learn from the Generals of the Markets: Market Generals




Thursday, December 18, 2014

Leon Cooperman: A Distinguished Trading Veteran

LEARN FROM THE GENERALS OF THE MARKETS - PART 57

“You have to respect the stock market. If you don‘t, you‘re going to get wiped out.”

Leon G. Cooperman was born in April 25, 1943, in New York, USA. He was born to Jewish parents who immigrated to the US. He’s an astute American trader and philanthropist. He attended Hunter College and after graduation, he worked as a quality control engineer at Xerox. Later, he earned his MBA from Columbia Business School. That was 1967.

Immediately after leaving Columbia Business School, he started working at Goldman Sachs, serving that company in various capacities for the next 25 years. He then started a private firm called Omega Advisors, Inc., based in New York and managing about $6,000,000,000.

In March 2013, Leon was worth $2, 500, 000, 000. Forbes has constantly ranked him among the most influential persons, the richest persons and the highest-earning funds managers. The Institutional Investor All-America Research Team survey voted him the best portfolio strategist for 9 years. He belongs to various societies and foundations. As a philanthropist, he’s made large donations towards many education and cultural causes.

Leon’s married to a wonderful woman named Toby and they’re blessed with children and grandchildren.

Lessons
Here are the lessons that can be learned from Leon Cooperman:

  1. Leon’s managed funds have been outperforming the markets for over 22 years. He makes at least, average returns of 14.6% per annum. This shows that when you have good strategies that can enable you to survive all market conditions, it is possible to make profits almost on annual basis for the rest of your trading career, though, some years can be better than others.

  1. One secret of successful traders (including other professionals) is to employ the services of those who’re more knowledgeable and more competent than they’re. Leon is aware of this secret and makes use of it. In fact he likes to use this quote from Andrew Carnegie: “Here lies a man who was wise enough to bring into his service men who knew more than he.” Really hedge funds big boys and great financial institutions have pros who’re working for them and thus contributing to their overall success.

  1. Leon uses fundamental analysis in his trading approaches and you can take note of this. Besides, you need to love trading and work hard at it. Discipline is also a must for traders who wish to attain success.

  1. There are always trading opportunities in the markets. Once the opportunities have been sighted, you can open your positions at the predetermined time. As an active trader, you need to monitor your trades and manage them properly.

  1. Leon likes to buy cheap markets and sell expensive markets. Some may call it contrarian trading – which works for those who’re good at it. Profitable speculation also has to do with entering the markets when the prices are right for your positions.

  1. Large pullbacks (called crashes) are a normal thing in bull markets, and good speculators make money from them.

  1. Some of the stocks traded by Leon are winners and some of his stocks are losers, but he knows how to recover quickly and move ahead. This fact reflects in his account history. You can’t be right all the time, but with good trading management principles, you can always recover at last and move ahead.

  1. There are chart patterns, market cycles and repetitive trends in the markets, which have very high winning probabilities. This is one of the secrets behind Leon’s success. You need to identify cycles and repetitive chart patterns that work for the financial instruments you trade.

  1. Courage is important for traders. You need to believe in your trading approach, especially if they worked for you in the past. Sometimes, things mayn’t go as expected, but with persistence, you’ll rebound. You don’t need to abandon your proven system because of temporary losing streaks.

  1. Trading is a university from which you can’t graduate. You continue to learn new things that can improve your career the more and the more. Leon said: “One thing nice about the investment business is that, even though I‘m 68, I continue to learn. You learn something every month and every quarter.”

Conclusion: There isn’t a trader without a scar; and the scar of every trader is the sacrifice being made then and now. Success comes at a cost. Your victory doesn’t lie in knowing what it takes to become a profitable speculator; your victory lies in doing what it takes to become a profitable speculator.

This article is ended by these quotes. The quote above is from Leon, and the quote below is also attributed to him:

“I think all we’ve learned is what we already knew, is that stocks have become like commodities, regrettably, and they go up to a limit and they go down to a limit. And we’ve also known over the years that when they go down, they go down faster than they go up.”


Learn from the Generals of the Markets: Market Generals



Wednesday, December 17, 2014

Stay Away from Nanoco

Nanoco shares (LSE:NANO) are currently not attractive. This is a market in which bulls and bears may suffer if they try to open swing trading or position trading positions. This is a kind of the market in which the price always makes it difficult for most speculators to make money, because of its deceptive movement.

In the chart, the ADX period 14 is below the level 20, meaning that there is no momentum in the market. The DM+ and the DM- are intertwined, with no indication of any upper hands of either the bull or the bear. The MACD (default parameters) has its signal line and histogram above the zero line, but this is nothing significant. Should the price go further upwards above the supply level at 140, it would mean the establishment of a Bullish Confirmation Pattern. A break below the demand level at 100 would lead to a Bearish Confirmation Pattern.

Long-term traders may stay out of this market until there is a clear directional movement. Right now, short-term positions may be opened to take advantage of short-term fluctuations, thereby allowing profitmaking when long-term investors suffer.

This forecast is ended by the quote below:

“As a trader, I don’t care what others think because I don’t have to justify myself to anyone. This is another bit of freedom that this [trading] profession gives you.” – J. C. Parets

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Ultrasis Makes Attempt to Recover Its Losses

Ultrasis stock (LSE:ULT) gapped downwards seriously in October 2014 and the considerable loss was sustained for the following few months. This month, price rose significantly, almost recovering the recent loss in the market. This may be the beginning of a long-term bullish run. What you see as a great directional movement began as a rally in a bear market or as a pullback in a bull market or a breakout in an equilibrium market.

Price is above the EMA 21 and the Williams’ % Range period 20 is now around the overbought territory. This means that the market is currently strong, and irrespective of occasional pullbacks along the way. Occasional pullbacks may trap some bears into thinking that a bearish movement may begin. This emphasizes the reality of noticing people’s weakness when studying the markets. Price may reach the resistance levels at 0.8 and 1.0 respectively.

This forecast is ended by the quote below:

“The power of software and hardware leads us to forget that trading is above all focused on man and on his needs. Often choices are made by simply following good sense and not complicated algos on quant trading. You must be comfortable with what you do on the markets otherwise painful trading will not lead anywhere.” – Professor Emilio Tomasini

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Monday, December 15, 2014

The Conditions on Gold and Silver Become Precarious

GOLD (XAUUSD)
Dominant Bias: Bearish
The long-term bias on Gold is bearish, but the medium-term bias is bullish. Even the medium-term bullish bias has been put in a precarious condition, because price has been trending downwards this week. Any movement below the support level at 1187.00 would make it illogical to seek long trades, while a movement below the support level at 1185.00 would result in further strengthening of the selling pressure in the market. It is now clear that this precious metal can no longer trend significantly upwards this year, and as a result of this, further southward movement might be anticipated, while rallies would be seen as good opportunities to sell short. The bearish outlook may hold until January 2015 – a period when Gold could begin to rally seriously.

SILVER (XAGUSD)
Dominant Bias: Bearish  
The selling pressure on Silver is even stronger than the selling pressure on Gold. Price trended upward last week, and then moved in a tight consolidation before it closed. This week, price has been dropping so far, having gone downwards by over 900 pips on Monday. The market is currently trading below the supply level at 16.5000, and a movement below the demand level at 15.5000 would signify increased seriousness of the selling pressure. Possible rallies can enable traders to sell the rallies, though the bulls may come back with a greater force in January 2015.


Learn from the Generals of the Markets: Market Generals

Sunday, December 14, 2014

Daily analysis of major pairs for December 15, 2014

Cable made some effort to go bullish last week. Price went upwards in a slow and steady manner and then moved sideways, closing at 1.5715 on Friday, December 12, 2014. Price may go further upwards towards the distribution territory at 1.5800, provided that Greenback continues its current weakness.      

EUR/USD: This pair has been making serious effort to go upwards – with a measure of success. The market went upwards by over 200 pips last week, closing above the support line at 1.2450. There is a Bullish Confirmation Pattern in the market and it is expected that price could go towards the resistance line at 1.2500.


USD/CHF: This pair has been trending downwards – with a measure of success. The market went downwards by over 170 pips last week, closing below the resistance level at 0.9650. There is a Bearish Confirmation Pattern in the market and it is expected that price could go towards the support level at 0.9600.

GBP/USD:  Cable made some effort to go bullish last week. Price went upwards in a slow and steady manner and then moved sideways, closing at 1.5715 on Friday, December 12, 2014. Price may go further upwards towards the distribution territory at 1.5800, provided that Greenback continues its current weakness.     

USD/JPY: USDJPY closed below the supply level at 119.00 on Friday. Price nosedived by over 400 pips last week, thereby overturning the recent bullish bias. Things have gone bearish and with continuous weakness in Greenback, price could test the demand level at 118.00.

EUR/JPY:  The situation on this cross is dicey. Some indicators are bullish and some are bearish in the same timeframe. Therefore one may stay aside until there is a clean directional movement. One thing could be noted: This cross has a high probability of going upwards this week.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Saturday, December 13, 2014

Weekly Trading Forecasts on Major Pairs (December 15 - 19, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This market moved upwards by over 210 pips this week, after testing the support line at 1.2250. All indication points to the fact that short trades are no longer logical in the near-term. It is possible that the bears would gain control again before the end of this year, but right now, the outlook is bullish. A Break above the resistance line at 1.2500 would mean a stronger formation of the current bullish action.

USDCHF
Dominant bias: Bearish   
The weakness in the USD has enabled this pair to go downwards this week. Price tested the resistance level at 0.9800, but it could not close above it. From that resistance level, the pair trended downwards by around 160 pips, going below the resistance level of 0.9650. From here, the pair may reach the support level at 0.9600, and should the support level get broken to the downside. It would mean that the bulls have become powerless for now.  

GBPUSD
Dominant bias: Bullish  
Cable went bullish this week, moving upwards in a slow and steady manner, and then moving sideways until the close of the market. Price closed at 1.5715 on Friday, December 12, 2014; above the accumulation territory at 1.5700. The distribution territory at 1.5750 has been tested and it could be tested again. With more strength in the market, another distribution territory at 1.5800 could be tested eventually, for that is the target for the bulls in the short-term. One thing, however, should be noted: Cable could become weak again before the end of this year. 

USDJPY
Dominant bias: Bearish
USDJPY managed to go above the supply level at 121.50, but further bullish movement was rejected as price dived by more than 400 pips, testing the demand level at 117.50. It may look as though the bearish effort has been rejected at that demand level; nevertheless, the level could be tested again. It could even be breached to the downside.     

EURJPY
Dominant bias: Bullish
The situation on this cross is currently dicey. EUR is making effort to go bullish and JPY is nether weak.  The market dropped seriously, which was contained at the demand zone of 146.50. From that demand zone, price has gone upwards by 150 pips, besieging the supply zone at 148.00. It is very much likely that the supply zone would give way, thus enabling the market to go towards another supply zone at 149.00.

This forecast is concluded with the quote below:

“People often underestimate their ability and their right to be a trader… It is about a state of mind. Having the belief you can win in trading and controlling your emotions to think clearly even when things are going against you, this makes a professional trader.” – Steve Ruffley










Thursday, December 11, 2014

Are looking for a trading opportunity?


“Active trading requires increased mental capacity. But your IQ doesn't need to break the bank. You can increase your mental capacity through practice.” – Joe Ross

Traders often check the markets to look for trading opportunities. When a discipline trader fails to find a good setup in a market, she/he mayn’t trade or look for trading opportunities in another market.

It’s bad to attach ourselves to a single market, trading it when the market is choppy or trendless. When it’s not clear which direction the price may go, we shouldn’t trade, or we should look elsewhere. Yes, there are good trading opportunities elsewhere. It’s good to look for the markets that are easier to trade – the markets that are moving predictably. When we want to trade good setups, we’re not fearful, for we know how to control our risks. “Fear is one of the greatest enemies to success,” says Reginald Mengi. We want to trade in a way that enables us to have average winners that are much bigger than average losers.

It’s amazing that strategies with low hit rates can produce good results when winners are allowed to run. Super trades have made fortunes with strategies whose hit rates are low. Why would you be emotionally attached to a market that’s too difficult to trade? Why must you suffer in one market when there are wonderful opportunities in other markets? Our aim is to make money, not to attach ourselves to a market that’s difficult to predict. Attaching ourselves to a market is not sensible if we can’t make money from that market.

Those who transact in physical markets like automobile markets or cloth markets mayn’t be able to do this, but online traders can look for any markets where they find interesting opportunities.  I laugh when news trading addicts ridicule chart analysts, for they tend to forget that the news releases they worship can’t guarantee what the market will do in the next moment.  We’re not concerned with economic figures but we’re concerned with the effect those figures would have on the market.

This article is ended with the quote below:

“Every time I have lost badly, it was because I violated at least one of my rules.” – David J. Merkel



Learn from the Generals of the Markets: Market Generals

Tuesday, December 9, 2014

Does it make sense to go long on Kefi Minerals?

Keffi Minerals stock (LSE:KEFI) appears to be rallying in the context of a downtrend. Should one go long? When caught in a wrong direction, traders who hate to use stops are often forced to run their positions longer than they can imagine. When many experts are bearish, it is time for you to be bullish and vice versa.

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 part of the chart. All the EMAs are sloping downwards indeed, and ideally one should sell short when price tests the EMA 20 or 50, and retraces southwards following that. When price breaks the EMAs 20 and 50 to the upside, going towards the EMA 200, then the dominant bias is in jeopardy.

It would be wise to wait for a Golden Cross, i.e. when price would close above the EMA 200, so that a long trade can be sought. Or it is better to wait till price closes below the EMA 50, so that renewed bearish outlook may be capitalized on.

This forecast is ended by the quote below:

“Yes, I decided to focus on technical analysis which seemed advantageous to me simply because you can use technical instruments to directly manage risks. And that’s what matters in the stock market in general and in trading in particular.” – J. C. Parets

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Metal Tiger: Price Going Towards the Resistance Level at 2.500

Metal Tiger shares (LSE:MTR) are going up and they may reach the resistance level at 2.500. Price traded lower in the months of October and November 2014, but it has skyrocketed in this month. One great trader has said that his view on the shares is bullish. When a great trader says something, the market tends to listen.

In the chart, it can be seen that price broke upwards above the upper Trendline, moving upwards seriously. At the same time, the RSI period 14 has crossed the level 50 to the upside. Therefore the logical thing to do here is to go long, for price may reach the aforementioned resistance level (2.500). Once the target has been attained, the position can be smoothed. Smoothing is the end of a position.

The way huge gains come to traders is the same. Profitable traders use fundamentals to project the near-term market direction. This enables them to open trades when a new bias is still young, thereby maximizing their profits.

This forecast is ended by the quote below:

“If you learn and think things the same way everyone else does, you have no competitive advantage. If you learn to think different, you can really own a big edge in any competitive environment.” – Sam Seiden

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



Monday, December 8, 2014

Trading Signals for GBP Pairs (December 9 - 22, 2014)

GBPAUD = Buy

GBPUSD = Buy

EURGBP = Sell

GBPJPY = Buy

GBPCHF = Buy

GBPCAD = Buy

GBPNZD = 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, December 7, 2014

Daily analysis of major pairs for December 8, 2014

Last week, USD/JPY moved upwards by over 300 pips. This has come as a result of a great weakness in USD and a great weakness in Yen. The supply level at 121.50 is under siege and it may be breached to the upside as the market continues to exert its bullish strength.

EUR/USD: This pair became weaker as it went below the resistance line of 1.2400. The resistance line at 1.2300 has also been breached to the downside, and price is supposed to go further below, reaching the support line at 1.2250.


USD/CHF: The currency trading instrument became stronger as it went above the support level at 0.9750 (which was our target for last week). Price has closed above the support level, making the next target for the bulls to be situated the resistance level at 0.9800.

GBP/USD: Cable closed at 1.5579 on Friday, December 5, 2014, on a bearish note. Price has gone below the distribution territory at 1.5600, making the Bearish Confirmation Pattern more visible. The accumulation territory at 1.5550 would soon be tested.

USD/JPY: Last week, USD/JPY moved upwards by over 300 pips. This has come as a result of a great weakness in USD and a great weakness in Yen. The supply level at 121.50 is under siege and it may be breached to the upside as the market continues to exert its bullish strength.

EUR/JPY:  This cross also moved upwards last week; though the upwards movement is not as strong as the upwards movement on USD/JPY. The bulls may continue pushing price northwards. However, there is now a possibility of large pullbacks in the market (which is also true of other JPY pairs), and the pullbacks can be checked at the demand zones of 148.50 and 148.00.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group



Saturday, December 6, 2014

Weekly Trading Forecasts on Major Pairs (December 8 - 12, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
This is a weak market, and the broke below the line at 1.2400 (which is now a resistance line) led to the strengthening of the bearish bias as price went further downwards, closing below the resistance line at 1.2300. The target for next week is at the support line of 1.2200, which would be tested with the continuation of the weakness in this market. Any rallies, whether shallow or significant, should be seen as opportunities to sell short. As long as the rally does not take price above the resistance line at 1.2500, it cannot render the bearish bias invalid.

USDCHF
Dominant bias: Bullish   
USD/CHF was able to close above the target at 0.9750, which is now a support level. Price was able to close above that level as it moves very close to the resistance level at 0.9800. The resistance level could be breached to the upside as price goes for another target at the resistance level of 0.9850. Could USD reach parity again with CHF? Only time will tell. However, if that would happen, it could be in this month.

GBPUSD
Dominant bias: Bearish  
This currency trading instrument is also weak. It was able to break below the price territory at 1.5600, which had been a great hurdle for the bears for a few weeks. The great barrier has been overcome and the instrument has closed below that territory. Should price go further downwards, it would reach the accumulation territory at 1.5500. The distribution territory at 1.5600, which is now a great barrier, should do a good job in resisting possible rallies along the way. Any rally that is strong enough to break that distribution territory to the upside could be strong enough to threaten the existence of the extant bearish outlook.

USDJPY
Dominant bias: Bullish  
The Bullish Confirmation Pattern on this pair is stronger than ever – because of a great strength in USD and a great weakness in JPY.  The supply level at 121.50 is under siege and it would be broken to the upside. On the other hand, there could be a large pullback while the bulls are making effort to push price further north, as it is may be true of other JPY pairs. The possible pullback would be contained at the demand levels of 120.50 and 119.50.    

EURJPY
Dominant bias: Bullish
This cross moved upwards by roughly 200 pips this week (USDJPY moved by 300 pips). Price ought to target the supply zone at 150.00, but the possibilities of bearish retracements cannot also be ruled out; though the retracements should be halted at the demand zones at 148.50 and 147.50. The bias remains bullish.

This forecast is concluded with the quote below:


“Trading is a matter of probabilities. We find a method that has a statistical edge and use that method over and over so that the law of averages will work in our favor.” – Joe Ross



  






Thursday, December 4, 2014

A Simple but Effective Relative Strength Index/Bollinger Bands Strategy


“I am adhering to a positive expectancy model and prudent rules of risk management, therefore I have confidence in taking each and every trading signal.”

The Relative Strength Index (RSI) – which has many uses - is a popular tool among Forex traders. However, using it in a conventional way mayn’t serve our best interest. If the conventional use were effective, many traders wouldn’t be losing. The conventional use makes us buy when the indicator is oversold and sell when it is overbought.

Another indicator in consideration is the Bollinger Bands (BB), which is also popular. Its conventional use makes us buy when the lower Band is tested by the price and sell when the upper Band is tested by the price. Also, many traders fail using this approach. Why?

This is because the Forex market tends to move strongly in one direction. When a major bias is assumed, it can go on for weeks, months or years; having transitory corrections along the way. This is especially true of certain crosses and pairs that are often ignored by the mainstream traders. For example, the AUDJPY on 4-hour chart reached a demand zone at 93.00 on May 21, 2014. After this, an upward journey was assumed. The BB had had its lower Band tested and the RSI went into the oversold region and an indication to go long was seen, as it were. Many a trader would’ve gone long.

The price then went up by over 120 pips, testing the upper Band of the BB on May 27, 2014. Was that a time to go short? Many a trader would’ve gone short, and of course, gotten kicked in the butt. In contrary to the expectation of a reversal, the price went further upwards by another 160 pips, testing the upper Band of the BB many times along the northward journey, fooling the traders that a reversal would happen (especially when the RSI sauntered into the overbought region).

What can be done to avoid this kind of scenario and make our trading more profitable? When a pair or cross is trending seriously in one direction, we’d do well to trade in its favor rather than trading against it. Therefore, we want to do something that goes contrary to the conventional thought, but which would make us experience some positivity.

Let’s go back to the example of the AUDJPY on May 27, 2014. The most preferable action to have been done was to go long. On June 24, 2014 (that was the date on which this article was being prepared), the price on the AUDJPY pushed the lower Band of the BB downwards vigorously while the RSI period 14 went below the level 40. What should we do? Sell.

Conversely, this means that we want to go long when the price touches the upper Band of the BB vigorously and the RSI goes above the level 60.

Using the BB and the RSI in conventional ways invariably result in low hit rates; whereas using it in contrary to the conventional thought would improve the hit rates. The conventional method is not totally useless, but the hit rates are lower. One may use optimal stops and targets, plus the maximum duration of open trades, as befitting a swing trading method. It’s a bad habit to truncate our trade before it hits the stop or the target or before the maximum trading duration expires. The position sizes should limit us to about 0.5% or 1% risk per trade and the use of trailing stop is optional.

When trading a mechanical strategy, we want to remain mechanical in our approach. Application of emotional discretion to a mechanical strategy may lead to errors, especially when we’re trying to tweak it for optimization. 

When we peek at our charts – irrespective of the instruments – we peek at money-making setups. Nevertheless, it’s not every setup we’ll trade. We want to take fewer setups so that our stakes could be limited. We’re interested in harnessing gains, not in making infallible forecasts. If we accept negativity in our career, we’ll later be rewarded with positivity.

The quote above is from Richard Weissman. Another quote from him ends this article.

“It is more important to be the best risk manager and best position manager than it is to
develop the most robust rules for trade entry.”



Learn from the Generals of the Markets: Market Generals

Wednesday, December 3, 2014

Fitbug Price Rises from a Strange Base

Fitbug Holdings shares (LSE:FITB) have risen from a strange base in a determination to go upwards. The base is called a strange base because it was ongoing for many months (an extremely tight consolidation), while price appears as dots in the chart. However, the current upwards breakout signals the end of the tight consolidation.

The ADX period 14 is now above the level 40, meaning the current bullish bias is strong. The DM+ is above the DM-, meaning that the bulls have upper hands. The MACD (default parameters) has both its signal lines and histogram above the zero line. This shows a Bullish Confirmation Pattern in the market and the only rational thing to do is to go long irrespective of the volatility and pullbacks in the market. Price may eventually reach the resistance levels at 30.00 and 35.00.

Even with a high hit rate, you would still need bravery and determination to go on during a short-term losing streak.  You do not need to quit because of a transient losing streak. Remember the day you decided to become a trader. The only thing we can do to become profitable is to truncate our losses and ride our wins. There is no better method for trading.

This forecast is ended by the quote below:

I have been in this business since 1994 so that I have my second decade anniversary now and I am always detecting the same behaviour.” – Dr. Emilio Tomasini

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Learn from the Generals of the Markets: Market Generals



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