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Sunday, August 30, 2015

Daily analysis of major pairs for August 31, 2015

EUR/USD:  The last two weeks were characterized by the strongest movement on the EUR/USD in this year. From the support line at 1.1050, the price skyrocketed and peaked at the resistance line of 1.1700 (within a few days). From that peak, the price has been corrected by over 520 pips. This correction has been serious enough to result in a bearish signal in the market, which means that the support line at 1.1100 might be tested easily this week.      


USD/CHF: In the last two weeks, USD/CHF underwent its second strongest movement so far in the year (apart from the incident that happened on CHF pairs on January 15, 2015). From the resistance level at 0.9750, the price fell by 500 pips before being corrected upwards by 350 pips. This significant correction has violated the recent bearish outlook – resulting in a “buy” signal in the market. A movement above the resistance level at 0.9700 would particularly result in a Bullish Confirmation Pattern in the market. 

GBP/USD:  The adamant bulls gave up their persistent struggle last week as the Cable yielded to gravity. Since the price managed to test the distribution territory at 1.5800, the price has nosedived by 450 pips, testing the accumulation territory at 1.5350. The market could go further south in this week, as the bias on it is now bearish.

USD/JPY:  The last two weeks were characterized by the strongest movement in this year on the USD/JPY. From the supply level at 124.50, price dipped by 800 pips, going briefly below the demand level at 116.50. The price has gone upwards by 500 pips since then, and a further northward movement of 100 pips this week would result in a bullish outlook.

EUR/JPY:  Because the Yen is strong, the Euro has fallen against it – just as the Euro is now being corrected lower against the USD. This is a volatile market in which the bears are proving stronger. Last week, the price plummeted by 350 pips, testing the demand zone at 135.50. The demand zone has been tested several times and with the ongoing strength in the Yen, it might be breached to the downside this week.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html 


Saturday, August 29, 2015

Weekly Trading Forecasts on Major Pairs (August 31 – September 4, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
Last week witnessed the greatest volatility in the markets since January 15, 2015. Between August 19 – 24, price went upwards by 680 pips, topping at the resistance line of 1.1700. Immediately the resistance line was tested, price began to retrace steadily and gradually. From the weekly high of 1.1700, price has gone downwards by 520 pips; thereby threatening the recent bullish bias. The threat to the bullish bias is so serious that a movement below the support line at 1.1100 would ultimately result in a bearish outlook.

USDCHF
Dominant bias: Bearish   
From August 19 – 24, this pair plunged by 500 pips in what can be called the biggest USDCHF move in the last few months. From August 25 till now, price has nevertheless, rallied by over 300 pips, which is another threat to the existing bearish outlook on the market. In case price goes above the resistance level at 0.9700, things would turn cleanly bullish; whereas failure to do that could strengthen the existing bearish outlook. Since the outlook on CHF is bearish for the month of September, bulls would be having some difficulties pushing USDCHF upwards.

GBPUSD
Dominant bias: Bearish    
When the hope of a weak GBPUSD was almost dashed for the month of August 2015, the pair eventually became weak. This formerly trudging pair managed to test the distribution territory at 1.5800 before bulls lost all their power. From that distribution territory, price nosedived by 450 pips, reaching the accumulation territory at 1.5350. This means that bears are the overall winners on GBPUSD in the month of August, since their action overturned all the bullish gains for the month. In September, we will see very serious volatility on GBPUSD (and of course on all GBP pairs), coupled with fast bearish and bullish movements.

USDJPY
Dominant bias: Bearish   
The expectation of a bearish USDJPY pair for the month of August eventually materialized; and so was the bearish outlook on some other JPY pairs. From August 19 – 24, price plummeted by 800 pips, going briefly below the demand level at 116.50. Since then, price has been making a noteworthy bullish recovery - a movement of 500 pips. Should the price move further upwards by another 200 pips this week, the bearish outlook would be rendered ineffectual. However, an upward movement of 200 pips could be difficult to achieve because it is expected that most JPY pairs would be bearish for most of the time in the month of September (with a few exceptions); and USDJPY would not be different.
                                                                                                                               
EURJPY
Dominant bias: Bearish  
Owing to the strength in Yen, which was already anticipated, EURJPY fell sharply, resulting in a Bearish Confirmation Pattern. Though there is an ongoing struggle between bull and bear, price was able to attain the demand zone at 135.50 last week, in a downward movement of 300 pips. The demand zone at 135.50 was battered several times without being permanently penetrated. That demand zone ought to be breached this week or next so that the bearish bias can continue to make sense.      

This forecast is concluded with the quote below:

“The market provides the greatest opportunity on earth for financial reward. It also teaches great lessons… It is the greatest game on earth.” – Mark Minervini (a trading legend)
                                                                                                  

What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html


Friday, August 28, 2015

Michael Platt: One of the Most Effective Risk Managers

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 12

“I am actually trading because I learn a lot of important life lessons from it. Trading helps me get to know myself. It helps me think about why I believe things and why I do things.” - Van Eekelen 

Name: Michael Platt
Date of Birth: December 12, 1968
Nationality: British
Occupation: Hedge fund titan

Career
Born in Preston, England, Michael attended London School of Economics and earned a BSc with Honors. He was influenced by his grannie who was an investor. With the help of his grannie, he got his feet wet and was hooked. He began working at JP Morgan in 1991, being a managing director in charge of value investing. He took advantage of challenges and opportunities he encountered at JP Morgan.

He co-founded BlueCrest Capital Management LLP in the year 2000, and that firm is now the Europe’s third biggest hedge fund firm. The firm manages over 30 billion GBP and has 350 employees. They mainly employ systematic trading approaches, using computer programs to facilitate the approaches.

As of April 2015, Michael was worth 1.5 billion GBP (3.5 billion USD). He’s married and currently lives in Geneva, Switzerland. He’s an avid lover of arts and paintings.

Insights:
  1. When you make useful decisions in life, including trading, you’ll simply end up having enough. You’ll not need to be striving after money. You’ll then see trading as an interesting activity, not an onerous task. At the end, you’ll be so rich to the extent that big money would not matter so much to you. For example, Michael Platt has become so rich to the extent that he once turned down an offer from George Soros. The latter wanted him to manage more than $1 billion USD for a 0.5 percent management fee and a 10 percent performance fee. But Michael said his investors were willing to pay management fees of 2% and performance fee of 20%. Many desperate professionals would jump at such an offer.

  1. Please see the quote at the bottom of this article. Risk control is extremely important for your everlasting career as a trader. That’s your life insurance. Michael acknowledges that risk management is the most important thing. In bear markets, many funds crashed and burned, especially when they faced credit crunches in 2008. Yet Michael finished the year with 6%. He avoided loss and even made a small profit. What do you want those who lost to say?

  1. Hear! Hear! Gamblers who think it’s stupid to risk less than 1% per trade. Risk control is something that must be enforced in trading. One of BlueCrest’s secrets is to make sure that each of their traders doesn’t go below 3% drawdown, or they’re deprived of 50% of the portfolio they manage. Another drawdown of 3% (making a total of 6%) would make a trader get their entire portfolio allocation removed. They may even lose their job if it’s found that their trading method is suicidal. I currently risk 0.25% of my account per trader, and so, I’ll need to lose 12 trades in a row before I can go down 3%. This is a good plan for survival.

  1. Many so-called professionals out there give advice that helps others make money, but not themselves. Ideas from professionals are valuable in that you can make profits from them, before the professionals themselves do so (they may not even do so). You can really take advantage of comments that are made by those trading professionals.

  1. There are winning strategies, and you need to find one of those so that you can attain ultimate financial freedom, as a result of consistent profits in the markets. BlueCrest Capital International fund hasn’t had a negative year since it was started – though some years were better than others. For example, the fund made a profit of 41% in 2009, earning hundreds of millions of dollars in fees only.

  1. Leda Braga, featured in one of my past articles, is a partner of Michael at BlueCrest. She manages a fund named BlueTrend. She’s a pro trader, and she has been a blessing to BlueCrest. Great minds think alike, for like will attract like. Do you have a good trader as a partner?

  1. Success attracts more success. The more successful you’re, the more investors you’ll attract and the richer you’re going to be. Because BlueCrest made a profit of 4 billion USD in 2008, they got about 5 billion USD in additional investment. But know this: the more you fail, the more investors you lose and the poorer you become. So you must know what you’re doing.

  1. Michael bets his own money alongside his investors. What a good trading idea! One trading specialist once advised that if funds managers’ money is tied to the portfolios they manage, there wouldn’t be rogue traders. When someone trades a fund which belongs entirely to her/his clients, they may be tempted to be careless because it’s not their money.

  1. Who encouraged you to become a trade? You should be forever grateful to such a person irrespective of what you’re currently facing as a trader. The advice to start trading is really a billion-dollar advice. Michael was inspired and encouraged by his late grannie, and he’s now a billionaire. I’m forever grateful to my uncle who advised me to become a trader.

  1. Michael’s dad was an engineer, and so, Michael wanted to study engineering. Suddenly, he changed his mind and studied Economics instead. This prepared him for the task ahead. Engineers can also become successful speculators; albeit the lesson is that one does not always need to take up a career one’s dad loves, especially if one doesn’t like the career.

  1. Michael started small and he’s now bigger. Please learn from this. When your performance is good, you’ll enjoy so much success in a relatively short period of time. Michael’s firm is now perceived with a higher level of credibility, even more than those who started the fund management business before them. That’s really an ideal achievement.  Learn from that please.

Conclusion: A judicious trader doesn’t act on impulses, whatever they may be. According to Joe Ross of Tradingeducators.com, from a purely physical standpoint, it is essential to minimize the potential impact that a losing trade may have on your account balance. If you lose a lot on a single trade, it will sting. But if you limit the amount of capital you risk on a single trade, it won't hurt at all. You can pick yourself up easily and put on the next trade. It's much easier to take a loss in stride when the real impact on your account balance is minimal.

This article is ended with a quote from Michael. Please think about it. Safety first!
“I’ve never hit the 3 percent drawdown… Ego is how you lose money in this business. I put a trade on, and if it doesn’t start working straightaway, I respect the price action and cut it fast.”

What Super Traders Don’t Want You To Know: http://advfnbooks.com/books/supertraders/index.html 


Thursday, August 27, 2015

Is Now the Time to Take Profits on Aldermore?

Aldermore stock (LSE:ALD) has been consolidating for some time – in a context of an uptrend. Is it now the time to take your profits, for a fear of a bearish breakout? No. The price has now gapped upward, ready to go bullish.

The consolidation is still in place. The ADX period 14; and of course the DM+ and the DM- are all intertwined. While the MACD default parameters does not also show anything significance, though the signal lines and the histogram are slightly above the zero line.

The recent price action shows that an upward movement is possible. It may even turn significant, and therefore, more profits should be anticipated instead of taking profits. Should an upward breakout occur, the price could reach the distribution territories at 350 and 450 within the next several months (or years).

It is necessary to think of how you can keep your capital safe if you are thinking about trading.  There is no way you can avoid errors when you are doing something for the first time. However, this is also how you make progress.

This forecast is ended by the quote below:

“To realize profits from investing in stocks, you must make three correct decisions: what to buy, when to buy, and when to sell. Not all of your decisions will turn out to be correct, but they can be intelligent.” - Mark Minervini

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders



Further Losses Expected on Rio Tinto

Rio Tinto shares (LSE:RIO) are extremely weak right now, and the weakness is expected to continue. This is a wonderful opportunity for sellers, who can make more money by continuing to sell the shares. Every week proffers attractive trading opportunities; and you can take them.

In the chart, it can be seen that the price is below the EMA 20 and the Williams’ % Range period 20 has gone towards the oversold territory. Long positions are not recommended, for this is a bear market. Any rallies that can be experienced would simply offer nice opportunities to short further.

No long-term reversals can materialize right now because the bears have refused to cooperate with the bulls. If “19,” refuses to cooperate with “1,” it would never become “20.” The next target for the sellers are now at the support level of 2000.

Those who are victorious in the markets have certain things in common. These things were not in your nature, as good as they are. You need to inculcate a winning mindset as well as a useful trading approach. You surely need a positive outlook and a positive expectancy system.

This forecast is ended by the quote below:

“Anyone can have short term success by being in the right place at the right time, but consistency is what differentiates the pros from the amateurs, the timeless legends from
the one hit wonders.” - Mark Minervini

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders





Sunday, August 23, 2015

Daily analysis of major pairs for August 24, 2015

The USD/JPY ended its equilibrium phase of several weeks as it plunged massively last week. Several previously demand levels are now supply levels, and the price is close to the demand level at 121.50, which could be breached easily in case the current selling pressure continues. This is a long awaited bearish signal – it may continue to hold this week.   

EUR/USD:  This currency trading instrument is now one of the strongest among the majors. From around the support line at 1.1050, the price skyrocketed by more than 320 pips, closing at 1.1384. The resistance line at 1.1400 is an easy target for the bulls this week. Even it would be breached to the upside.


USD/CHF: The USD/CHF has yielded to gravity; diving by 300 pips. There are resistance levels at 0.9550 and 0.9600, which should do a good job in halting bullish attempts this week. There are also support levels at 0.9450 and 0.9400, which would be targeted by the bears. Since the USD is weak and the CHF is very strong, it is reasonable to conclude that the current bearish movement may continue for a while.

GBP/USD:  This is a good example of cut-throat battles between the bull and the bear. This pair ought to go upwards in a positive correlation mode with the EUR/USD: it has gone above the recalcitrant accumulation territory at 1.5650. There is a fresh battle at the distribution territory of 1.5700, but the bull should be victorious though it is not an easy thing.

USD/JPY:  The USD/JPY ended its equilibrium phase of several weeks as it plunged massively last week. Several previously demand levels are now supply levels, and the price is close to the demand level at 121.50, which could be breached easily in case the current selling pressure continues. This is a long awaited bearish signal – it may continue to hold this week.  

EUR/JPY:  There is a neat Bullish Confirmation Pattern in this market and there is a tendency that the price may continue to journey upwards, especially in the face of the strength of the Euro. The initial losses seen by the bulls last week have now been recovered and the price might even go higher.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html 


Saturday, August 22, 2015

Weekly Trading Forecasts on Major Pairs (August 24 - 28, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
From the support line at 1.1050, this pair went upward by 330 pips, going above the support line at 1.1350. EUR is now one of the strongest among the majors (and so is CHF) and this has reflected on most EUR pairs. The next targets for EURUSD are now at the resistance lines of 1.1400 and 1.1450, which could be breached easily with an ongoing bullish pressure in the market.  

USDCHF
Dominant bias: Bearish   
This is a bear market. The massive bearish breakout that was seen last week has resulted in an end to the recent sideways movement in the market. The weakness in USD and the strength in CHF, coupled with the fact that this pair has to trade in the opposite direction to the strong EURUSD, have contributed to the current tailspin. Price dived by 300 pips last week, and it is now close to the support level at 0.9450. With a continuation of the current situation, bears may be able to attain another support level at 0.9300 this week.  

GBPUSD
Dominant bias: Bullish   
GBP may be weak somewhere else (as seen on GBPCHF and GBPJPY), but it is not weak against USD. Last week, GBPUSD managed to go above the stubborn accumulation territory at 1.5650. Bulls tried to push the price further upwards, but bears came in against them and started their bearish efforts. Another serious fighting is taking place around an accumulation territory at 1.5700, but the bulls must eventually win for the current bullish outlook to continue being logical. The hope of a weak GBPUSD has been dashed for this month, because stubborn distribution territories, if breached, become stubborn accumulation territories (and the other way round).  After all, GBPUSD is positively correlated with EURUSD.    

USDJPY
Dominant bias: Bearish   
Following the recent equilibrium phase – which lasted for several weeks – USDJPY finally broke south in a predictable manner. A weak USDJPY has long been anticipated; and with the fact that bulls have failed to push price significantly northward, the current bearish plunge is no wonder. In a strong trending market like this, demand (and supply) levels would be easily cut through; just like a hot knife through butter. Further southward movement is anticipated this week, though bulls may make some faint effort to reverse the trend.       
                                                                                                                               
EURJPY
Dominant bias: Bullish  
The EURJPY cross initially went down by 100 pips last week, but the movement was later reversed and price went vividly upwards. The next point of attack is the supply zone at 139.00. Price is very close to that supply zone and it may be breached to the upside. The bullish bias will exist for as long as EUR is strong.    

This forecast is concluded with the quote below:

“If you are just starting out, you should trade with real money as soon as possible… Do not fool yourself into a false sense of reality. Get accustomed to trading for real because that is what you are going to have to do to make real money.” – Mark Minervini (a legendary trader)
                                                                                                  

  
What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html

Thursday, August 20, 2015

What Every Trader Must Know About Drawdowns

“However, it is pleasant to win over the long term. Contrary to popular opinion, losses are part of winning. Take sports for example.” – Markham Gross

A drawdown is the peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough. A drawdown is measured from the time a retrenchment begins to when a new high is reached. This method is used because a valley can't be measured until a new high occurs. Once the new high is reached, the percentage change from the old high to the smallest trough is recorded (definition source: Investopedia.com).

As you can see, drawdowns (or roll-downs) are periods when you experience losses and your account goes down. If you open an account with $10, 000 and it drops to $9,200, then you experience a drawdown of 8%.

Causes of Drawdowns
Let’s put the issue of trading with no stops and high risk aside. Let’s imagine someone is using a good strategy that makes him cut his loss at 50 pips and runs a profit until it reaches 200 pips. That’s a good trading idea which makes money when currency pairs trend nicely. Nevertheless, when a period of drawdowns comes, more stops would be triggered and take profit levels would hardly be reached. The few take profit levels that are reached would be too few to recover the too many stops that are triggered. You open many a trade and it moves in your favor by a few or several pips and then turns negative, hitting your stop. For days, weeks, or months, false breakouts wouldn’t be a curiosity and sustained trending movement would be scarce.

Trading ideas that let profits run are the best, but they generally suffer when the markets enter equilibrium phases.

As in real life, doing the right things doesn’t always make you appear smart. In fact, you may sometimes look stupid by doing the right things. A trader that uses a stop may appear stupid when they are stopped out on a trade that eventually reverses and turns positive. A trader may appear stupid when a position they are trying to ride fails to meet its target, turning from positivity to negativity. But in the end, we’ll reap the benefits of doing the rights things.

Soon, a time would come when the situation will change and the person will recover the losses within days, weeks or months. 

Treacherous Statistics
Look at the long-term results of the strategies below:

Strategy A:
Growth: 343.80%
Drawdown: 37.45%
Monthly: 19.09%


Strategy B:
Growth: 119.40
Drawdown: 22.08%
Monthly: 10.51%

Strategy C:
Growth: 12.04%
Drawdown: 11.16%
Monthly: 0.49%

You can see that the strategies above have made nice profits in the long run, but not without roll-downs. Strategy A has earned a profit of 343.80% over the years, but it also went thru periods of losses amounting to 37.45%. The users of the strategies obviously deal with the roll-downs successfully; otherwise they’d have disappeared.

One marketer was recently creating hype that he’d a strategy that could turn $500 into a growing monthly income. As you know, the job of marketers is to emphasize the bright side of what they sell, while glossing over the dark side. It’s like when a religious preacher is telling people nice things that will happen to them if they join her/his religion and become responsible, without telling them the reality that religious people aren’t also immune from suffering. For instance, when an earthquake occurs, it doesn’t avoid the religious people in the region.

I never tried that hyped strategy – though I’ve tested over 250 strategies in my entire career. There’s no perfect strategy and there won’t be one. All excellent trading strategies experience drawdowns. All super traders experience drawdowns, albeit victoriously.

Sadly, the subject of drawdowns is the least mentioned in the trading industry, and there’s only scanty literature about the subject, in spite of the fact that it’s one of the most important topics in trading. Drawdowns must be experienced from time to time by all traders irrespective of age, intelligence, expertise, years of experience, risk control ability and strategies. This is where majority of traders fail. Your ability to deal with drawdowns triumphantly is the greatest determinant of the end game and your ability to enjoy a long-lasting career.

The smaller a loss is, the easier it’s to recover. The bigger a loss is, the more difficult it’s to recover.

There are periods when you’ll make money; there are periods when you’ll lose money, and there are periods when your performance would be flat (you’ll never go up or down). There’s no way around this fact. There is no way around the fact that you must sustain losses that you must eventually recover. Flat and drawdown period may even be longer than you expect. Switching strategies isn’t the way out. Can a rolling stone gather any moss?

That’s why it’s unrealistic to set a weekly or monthly target in a world in which you can’t really predict the future. That’s why it’s realistic to open a trade only after you’ve imagined the worst-case scenario. With that kind of mindset, you’ll realize the folly of not using stops and the folly of trading with large lot sizes. However, most of us have serious psychological and emotional problems.

One of the most frustrating things is to keep on trading when you keep on making losses. Your hope of a monthly income would be dashed and your courage will evaporate. The frustration would even become more intense, especially if you live in a country where you’ve to generate your own electricity and fuel is extremely scarce and expensive.


What Good Traders Experience
I remember what happened to me in the year 2011. I was making good profits for about 4 months: up to 30% (6000 pips). Then suddenly, the market conditions change and I was having losses after losses. I kept on managing my risk, being faithful to the system I used. The losing periods lasted for about 3 months and I went down from 30% pips to 15%, and suddenly… the market conditions became favorable again and I finished that year with 49% profits.

In a typical year, you can make 10% in January and 6% in February. You can make 3% in March and lose 9% in April. You can lose 4.5% in May and lose additional 5% in June. You can gain 4% in July and lose 4% in August. You can gain 11% in September and gain another 6.5% in October. You can gain15% in November and finish December with another 2.5%. How much would the trader end up with in the year? This is the reality of trading, which you must accept or go do something else.

Many so called Forex traders are gamblers who think they’re good. They lose hugely or earn margin calls during drawdowns. 

Anton Kreil says you will have about 3 months (or more or less) in a year in which you’ll experience drawdowns no matter what you do. How do you explain this to your investors? How do you explain this to your family?

When you limit a loss, you accept the fact that it won’t have any major impact on your portfolio anytime, no matter how terrible the situation may be. You can check your account history or past trading results in order to get comfort, knowing full well that your system will soon start working again because it worked in the past. You’ll be encouraged to keep on taking new signals (for you don’t know the ones that would win and recover your losses), maintaining discipline and calm.

To be a permanently victorious trader, you must control your loss and limit your roll-downs. It may be emotionally satisfactory to refuse to accept a mistake and ignore the use of stops, and the temptation to do silly things will balloon. In most cases, prices may go back to your entry points after harrowing periods of waiting and hope, which may be longer than normal. There’ll also be cases in which the hopes would be dashed as prices refuse to come back in your favor, going further and further against you instead. All the profits plus the capital you’ve would vanish. All market veterans acknowledge that the importance of loss control can’t be emphasized enough, because that’s the reason why over 95% of traders can’t be successful as traders.

On Trade2win.com, Barjon says… Perhaps all this makes it sound as though our trader’s reasoning will be spot on or that he is a fortune teller who can foresee the future. There is not such a trader. All trading is about making assumptions based on experience of what has happened in similar circumstances in the past. Those assumptions may be right or they may be wrong and from the business perspective the aim is to gain the necessary advantage when they are right and limit the damage when they are not.  

This piece is ended by the quotes below:

“Our worst case scenario for the basic strategy is where the trader can lose 70 per cent of the time with a reward-risk ratio of 3:1. With these statistics the trader can still be consistently profitable. The winners take care of the losers.” – Manesh Patel

“The difference between top-notch winning traders and those who barely get by is the attitude they take toward losses. Trading is a tough business where setbacks and losses are commonplace. If you aren't careful, you can feel beaten, knocked down, and afraid to get back up. It may be difficult at times, but it is often necessary to forget about the past.” – Joe Ross





What Super Traders Don’t Want You To Know: Super Traders

Gold and Silver May Continue to Rally Massively

Gold
Gold experienced a smooth downwards movement in July 2015. In August, price consolidated for about two weeks before breaking northwards last week. Price consolidated again before the end of last week and in the beginning of this week before breaking northwards again. This week is particularly interesting because Gold was thought of rallying, which is now happening. It is possible that the commodity would continue to rally in spite of consolidations and transient corrections along the way. As long as the support levels at 1110.00 and 1100.00 are not breached to the downside, this forecast would be valid. Since last week, price has made decent gains, and more gains may be made because this bullish signal may hold out till the middle of November 2015. It might even go beyond that.

Silver
In the last month and the last few weeks, the movement on Silver is quite similar to that of Gold. Price went upwards significantly last week, and then got corrected in the beginning of this week. However, Silver has gone upwards again – all indication being bullish. There are noteworthy demand levels at 15.0000 and 14.5000, which would try to resist further bearish corrections. Just like Gold, Silver may continue to rally until November 2015. Even bulls may be aided further by Thanksgiving effects in that month.  





What Super Traders Don’t Want You To Know: Super Traders

Wednesday, August 19, 2015

A Longer Term BUY Signal Emerges on EasyJet

Easyjet stock (LSE:EZJ) has a clean ‘buy’ signal on it, based on the current price action in the chart. In this month of August, effort was initially made to push the price upwards but this was stalled by the last bearish correction. However, the price is now gliding upwards smoothly.

This is an interesting development.

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 part of the chart. It can be seen that the EMAs have all started sloping upward – with the price above them.

The other 3 EMAs, plus the price, are all above the EMA 200. It is a bullish indication. The northwards journey has already started and it would hold out till around the middle of February, 2016.  

This forecast is ended by the quote below:

“Trading is a game of probability. This means that every trader will be wrong sometimes. When a trade does go wrong, there are only two options: to accept the loss and liquidate your position, or go down with the ship.” - Jamie Saettele


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders




Diageo Finds a Floor at 1750: Stock to Rally Till End of 2015

Diageo shares (LSE:DGE) are expected to rally, following the current rejection at the support level of 1750, which is already a formidable floor (barring further bearish effort).

The adamant floor was tested in May and June 2015, but further bearish attempts were foiled. This same support level has been tested recently and we can see that further bearish attempt is being rejected again. While the RSI period 14 is below the level 50 and the price is still between the Trendlines, a bullish movement would be pinpointed once the price goes above the upper Trendline and the RSI period 14 goes above the level 50.

This is what is expected on Diageo, and the northward journey may hold till the end of this year.

This forecast is ended by the quote below:

“Protective stop orders to the trader are as important as the oxygen tank to the Astronaut in outer space.  Without them, and proper use of them, you’re in big trouble... On the emotion side of trading, I don’t feel any different about a winning trade or a losing trade. Perhaps the fact that I have been doing this so long is a factor but the reality is, I am simply executing a profitable plan over and over and over. Small losses are just part of a very profitable plan that does not allow for big losses.” – Sam Seiden (Source: Tradingacademy.com)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders





Tuesday, August 18, 2015

Trading Signals for AUD Pairs (August 18 – September 10, 2015)

AUDJPY = Sell

AUDUSD = Sell

EURAUD = Buy

AUDCAD = Sell

AUDCHF = Sell

GBPAUD = Buy

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. You need to use your technical analysis to know when to enter, since you may want to trade a pair only after your entry criteria have been met.

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



  
What Super Traders Don’t Want You To Know: Super Traders

Sunday, August 16, 2015

Daily analysis of major pairs for August 17, 2015

The bullish effort on the Cable has led to a bullish signal on it.   However, there is one obstacle to be surmounted – the distribution territory at 1.5650. This distribution territory has adamantly rejected sincere bullish efforts for the past several weeks, and the price needs to close above it if the current bullish signal would continue to make sense. Otherwise, there could be a bearish correction this week.      

EUR/USD:  The EUR/USD has now become a bull market in the near-term. The price went upwards last week, testing the resistance line at 1.1200. The price could go above the resistance line this week; as it goes towards another resistance lines at 1.1250 and 1.1300. These are the targets for the week, for the Bullish Confirmation Pattern in the market is clear.


USD/CHF: Although this pair went down last week, closing at 0.9758, the recent bullish outlook has not been invalidated. What can invalidate the bullish outlook is an event in which the price closes below the support level at 0.9650. But in case that does not happen, this week can see some commendable bullish attempts, especially if the USD tries to amass lots of stamina.  

GBP/USD:  The bullish effort on the Cable has led to a bullish signal on it.   However, there is one obstacle to be surmounted – the distribution territory at 1.5650. This distribution territory has adamantly rejected sincere bullish efforts for the past several weeks, and the price needs to close above it if the current bullish signal would continue to make sense. Otherwise, there could be a bearish correction this week.     

USD/JPY:  The Big Picture on this currency trading instrument shows that there is a no dominant trend in the market. Upswings and downswings are often short-lived and sustained trending moves are rather rare. This market is, nevertheless, great for scalpers and intraday speculators. This week, it is expected that the price would either go above the supply level at 125.50 or below the demand level at 123.50. Should this happen, that would mean a strong bullish or bearish outlook.

EUR/JPY:  The EUR/JPY cross experienced a significant rally last week, rising from the demand zone at 136.00 and moving somewhat above the supply zone at 138.50. A further rally may be witnessed this week unless the Yen gains too much strength for the Euro, which is a possibility.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html 



Weekly Trading Forecasts on Major Pairs (August 17 - 21, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This pair rose by 150 pips last week, rising from the support line at 1.0950 and reaching the resistance line at 1.1200. Price has really met a challenge at the resistance line at 1.1200, but it would need to go above the resistance line so that the bullish journey can continue. There are support lines at 1.1050 and 1.1000: the bullish outlook would make sense as long as the support lines are not breached to the downside.   

USDCHF
Dominant bias: Bullish   
In recent times, both USDCHF and EURUSD are making bullish efforts. This is unusual because the pairs ought to go in separate ways (and they would soon do so). After testing the resistance level at 0.9900, USDCHF got corrected by 200 pips, testing the support level at 0.9700. However, this does not render the recent bullish bias invalid. The pair is now making some effort to go upwards and this week would see the result of that effort. The recent bullish bias could only be rendered useless in case the support level 0.9650 is breached to the downside.   

GBPUSD
Dominant bias: Neutral  
Cable remains highly volatile; characterized by large upswings and downswings in the market. There is no clear directional bias on the market because bulls and bears enjoy only transitory victories. There is an accumulation territory at 1.5450 and there is a distribution territory at 1.5650, which is an adamant distribution territory indeed because it has rejected all bullish effort for the past several weeks. Since the expectation for GBP is bearish for this month, things would become really bearish when the accumulation territory at 1.5450 is broken to the downside. On the other hand, a break above the distribution territory at 1.5650 would mean the bearish expectation may not materialize this month.     

USDJPY
Dominant bias: Neutral   
Based on the current price action, it can be said that USDJPY has hitherto defied gravity. Occasional bearish corrections are quickly followed by rally attempts – and all these are not even significant. This week, it would be intriguing to watch what would happen to this currency trading instrument. A movement below the demand level at 123.50 would result in a ‘sell’ signal while a movement above the supply level at 125.50 would result in a Bullish Confirmation Pattern.     
                                                                                                                               
EURJPY
Dominant bias: Bullish  
This cross rallied massively last week, closing at 138.11 on Friday, August 14, 2015 (just above the demand zone at 138.00). While the cross may journey further northwards this week, that would not rule out the possibility of a bearish plunge. The cross would be going upwards only as long as EUR is stronger than JPY.  

This forecast is concluded with the quote below:

“After playing in front of large football crowds and having the spotlight on me, I really enjoy having my own destiny in my hands now. I miss being as physically fit as I used to be, and the fun times with the other players, but I also like the freedom of trading. As a professional sportsman you have no freedom. But in my second career I have all the freedom I need, and that is through trading.” – Lee Stanford
                                                                                                  


What Super Traders Don’t Want You To Know: http://www.advfnbooks.com/books/supertraders/index.html


Thursday, August 13, 2015

Bruce Kovner: One of the Least Known Billionaire Traders

 INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 11

“The biggest risk in trading is hubris… This is because being wrong is actually an integral part of success. A successful futures trader makes many more losing trades than winning ones. The key is to recognize and concede the mistakes and cut losses. And ride the winners.” – Bruce Kovner

Name: Bruce Kovner
Date of birth: February 25, 1945
Nationality: American
Website: Caxton.com

Career
Born in New York, Bruce is from Jewish ethnicity. His family came from Czarist Russia, fleeing persecution for their political and religious beliefs.

He loved football and piano. He went to Harvard for a PhD program but he was unable to finish the program.

Following that, he tried a number of jobs, like playing harpsichord, writing and driving a taxi. He discovered trading as a career shortly after his first marriage (he’s been married twice). He began trading in 1977 with a borrowed 3,000 USD and ended up making 23,000 USD with it. During the volatility the position was exposed to, the open profit even went up as high as 40,000 USD. This made Bruce fall on love with the markets.

He worked under Michael Marcus - one of the trading geniuses featured in my past articles – and soon gained respect as a disciplined and reality-based trader. Eventually he founded his own firm; Caxton Associates, LP. The firm became so successful and managed around 14 billion USD at the apogee of their achievements.

Outside trading, Bruce Kovner isn’t well known, for he seldom grants interviews and loves privacy so much. One source says that his Fifth Avenue mansion in New York City, the Willard D. Straight House, features a lead-lined room to protect against a chemical, biological, or dirty bomb attack.

He’s no longer working as CEO of his firm: he’s retired from that position.

As of March 2015, Bruce was worth 5 billion USD. He’s an active philanthropist and he’s also engaged in other interesting activities. 



Insights:
  1. Bruce probably wouldn’t make billions of dollars as a writer, or as a harpsichord player or as a cab driver. Or can you tell me of anyone who makes billions driving a cab?  He was so lucky to discover trading. You’re so lucky to be reading this article. Few jobs can be as high paying as trading.  Imagine someone who started trading with $3,000 in 1977 and is currently worth $5,000,000,000. That’s Bruce Kovner. What can you learn from this?

  1. Trading success will, undoubtedly, cost you hard work and unrelenting desperate effort to achieve trading mastery. Without accepting this reality, you can’t be a good trader. Anyone telling you otherwise is a liar (and your experiences will later confirm the facts).

  1. There’s one thing that can’t be avoided in trading: you must make mistakes constantly and learn from them. That’s normal. You make a trading decision, and lose. You repeat that and lose. You repeat that and lose. You make another trading decision and lose. Then a good winning period comes out and you recover the loss and move ahead. In time, you proficiency increases as you make less mistakes (which is defined as not following your rules).

  1. Don’t follow the masses, for they’re always wrong. When most traders move in one direction, then the trend is about to change. If the masses were always right, most traders would be rich. But this isn’t so. For example, there’ll soon be a breakout after most traders have noticed an equilibrium phase.

  1. Short rallies in bear markets and the other way round for bull markets.

  1. Bruce said risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is his second piece of advice. Whatever you think your position ought to be, cut it at least in half.

This piece is ended with a quote from Bruce:

“My experience with novice traders is that they trade three to five times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks. The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.”


What Super Traders Don’t Want You To Know: Super Traders



Tuesday, August 11, 2015

Further Gains Expected on Concha

Concha shares (LSE:CHA) have the tendency to continue going north – though in a slow and gradual manner. There is no big momentum in the market but the shares are fairly strong.

The ADX period 14 is not above the level 30, confirming the aforementioned low momentum in the market. The ADX DM+ is, however, above the DM-. The bulls still have upper hands in the market. The MACD (default parameters) has its signal lines above the zero line. But its histogram is below the zero line. With an increase in the market momentum, the histogram would soon appear above the zero line. At that time, the ADX would have risen above the level 30, thereby showing a Bullish Confirmation Pattern in the market.  

Conservative traders could wait until the Bullish Confirmation Pattern appears before going long on Concha. Dr. Van Tharp says that most people make the mistake of looking for trading techniques right away without first working on themselves. When you do that, you end up making thousands of mistakes.

We want to avoid mistakes by sticking to our trading rules.

This forecast is ended by the quote below:

“As humans we always want to be right; we hate being wrong. You can’t think this way in the world of trading and investing because the truth is, you will have losses. Embrace those losses as a part of your winning strategy and keep them small.” – Sam Seiden


Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders




Buy Uranium Resources @0.500 and Take Your Profit @1.000

Uranium Resources stock (LSE:URA) is expected to go upward, owing to the Double Bottom Pattern in the market and the current price action. The market reached a floor on April and May 2015 before rising up significantly. At the end of July, it reached another floor, and now the price is taking off.

In the chart, we can see that the Williams’ % Range period 20 has already gone into the overbought region. This confirms the buying pressure in the market. While there may be occasional pullbacks, they are supposed to be short-lived because the bias is now bullish in the market. Since the price has already crossed the EMA 21 to the upside, it would be recommended that the stock is bought and rode higher towards the resistance level at 1.000. This can take only a few weeks or months.

Sir John Templeton (the greatest stock picker of the 20th century) was successful because he used his whole life with open-mindedness. He was not blinded by ego and he constantly searched for unconventional but sure-fire ways to make money. Without that, he would not have been a successful trader. Sometimes it’s on the mountain and sometimes it’s in the valley, but it’s triumph wherever. That is true of us.

This forecast is ended by the quote below:

“One thing that is certain in anyone’s trading journey is losses. Even the best traders lose from time to time. What the best traders have in common however is that they are very professional losers. Knowing how to lose properly is a must in a long and prosperous trading career.” – Sam Seiden

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders




Sunday, August 9, 2015

Daily analysis of major pairs for August 10, 2015

The GBP/USD went bearish last week, breaking southward out of the recent equilibrium phase. The price tested the accumulation territory at 1.5450 and later bounced upward from there. The bias on the market is bearish and it is possible that the accumulation territory would be tested again; it may even be breached to the downside.       

EUR/USD:  This is a highly volatile market, though things appear to favor the bears right now. There is a good support line at 1.0850, which was tried several times last year, but without success. For the current bearish outlook to continue, the support line must be breached to the downside. This requires a strong selling pressure.


USD/CHF: This pair is one of the few majors which went in predictable directions last week. From the support level at 0.9650, the price went upward by roughly 200 pips, closing around the resistance level at 0.9850. There is a Bullish Confirmation Pattern in the market and the price must continue to go further north for the pattern to be valid. Therefore the targets for this week are located at the resistance levels of 0.9900 and 0.9950. One thing can overturn this expectation – a significant weakness in the USD. It also must be noted that it is unlikely that the USD would reach parity again with the CHF this month, so long trades should be handled with caution.  

GBP/USD:  The GBP/USD went bearish last week, breaking southward out of the recent equilibrium phase. The price tested the accumulation territory at 1.5450 and later bounced upward from there. The bias on the market is bearish and it is possible that the accumulation territory would be tested again; it may even be breached to the downside.      

USD/JPY:  There was an end to the protracted sideways direction on this currency trading instrument as the price broke upwards, moving upwards by 100 pips (testing the supply level at 125.00). Further bullish effort was rejected at that supply level and price got corrected to the downside. Since the outlook on JPY pairs is bearish, there is a possibility that the demand level at 123.50 would be tested this week.   

EUR/JPY:  The EUR/JPY cross does not currently look ‘sexy’ (attractive); and since there is no clear sign of victory between the bull and the bear, it is OK to stay away from the market until there would be a trending movement as opposed to a choppy movement.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

What Super Traders Don’t Want You To Know: Super Traders



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