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Monday, February 29, 2016

Monthly Technical Reviews on Gold and Silver (March 2016)

 GOLD (XAUUSD)
Dominant Bias: Bullish
Gold has been going upwards since the beginning of this year, with first 7 trading days in February being quite significant as far as the bullish journey was concerned. Price topped at 1263.13 on February 11, 2016. On the daily chart, a Golden Cross had already taken place in early February; and from the middle of that month till the end, price was very volatile as bears battled bulls for a change in the trend. However, bulls have been able to keep the “buy” signal intact as bearish corrections offered opportunities to join the bullish trend. This bullish bias would be valid as long as price does not cross the EMA 200 to the downside on the daily chart. The Bullish Confirmation Pattern in the chart remains intact: Price could test the supply levels at 1270.00, 1290.00 and 1310.00 within March and April 2016.   

SILVER (XAGUSD)
Dominant Bias: Bullish   
Silver traded sideways in January and broke northward in February, for Gold acted as a catalyst that brought about a serious northward movement on it (as it was mentioned in the last monthly technical review on Silver). Silver reached a high of 15.9150 on February 11 and began to consolidate to the downside after that. Further consolidation for another 10 trading days could force the market to enter a neutral phase in the medium term, while a movement below the demand zone at 14.0000 might lead to a bearish signal. However, there could be a resumption of the bullish trend, especially if Gold holds out its bullishness for the next several trading days.


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


Daily analysis of major pairs for February 29, 2016

GBP/USD fell by almost 440 pips last week, almost reaching the accumulation territory at 1.3850. This has reinforced the existing bearish outlook on the market, and there are chances that the GBP/USD would continue going south this week and next. Generally, GBP pairs are bearish (as forecasted earlier) and they would remain under selling pressure until the end of March 2016.

EUR/USD: This pair dropped by 200 pips last week. It first dropped on Monday, and then traded sideways till Friday, and then dropped further that Friday (February 26, 2016). This is because of the weakness in the EUR, which has caused a Bearish Confirmation Pattern in the chart. The EMA 11 is below the EMA 56 in the 4-hour chart; which means the pair could trade further south.



USD/CHF: USD/CHF simply traded sideways last week, showcasing short-term oscillation between the support level at 0.9850 and the resistance level at 1.0000. There is going to be a break above that resistance level or below that support level this week, although a break below the support level is more likely, because the resistance level at 1.0000 is a great barrier and because EURUSD could be seen making some bullish attempt this week.

GBP/USD: GBP/USD fell by almost 440 pips last week, almost reaching the accumulation territory at 1.3850. This has reinforced the existing bearish outlook on the market, and there are chances that the GBP/USD would continue going south this week and next. Generally, GBP pairs are bearish (as forecasted earlier) and they would remain under selling pressure until the end of March 2016.

USD/JPY: This currency trading instrument went downwards from Monday to Wednesday, when further bearish movement was rejected and the price went upward by at least, 250 pips. This has resulted in a “buy” signal in the market. The EMA 11 has almost crossed the EMA 56 to the upside and RSI period 14 is above the level 50. The currency trading instrument could be seen trading further and further upwards this week and next.  

EUR/JPY: This cross trended downwards by almost 300 pips last week, reaching the demand zone at 122.50 on Wednesday (February 24, 2016). The cross has been corrected to the upside – by over 200 pips. This kind of correction is also visible on other JPY pairs, which would make commendable bullish efforts in March 2016.

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, February 27, 2016

Weekly Trading Forecasts on Major Pairs (February 29 – March 4, 2016)

Here’s the market outlook for the week:
                                          
EURUSD
Dominant bias: Bearish   
EURUSD traded lower on Monday, and then moved sideways until Friday, when it traded further southward, closing at 1.0931. Altogether, price moved downwards close to 200 pips, while the outlook on the market is bearish. There are support lines at 1.0900 and 1.0850, which would attempt to challenge more bearish movement. This week, EURUSD may be seen making attempts to rally, which might become serious in case bulls are determined enough.  In fact, all major pairs would been seen making short-term significant swings in the month of March.     

USDCHF
Dominant bias: Neutral
This pair merely traded sideways last week, meandering its way between the support level at 0.9850 and the resistance level at 1.0000. There is going to be a break above that resistance level or below that support level this week, although a break below the support level is more likely, because the resistance level at 1.0000 is a great barrier and because EURUSD could be seen making some bullish attempt this week. Whatever happens this week should put an end to the current neutral bias on the market.

GBPUSD
Dominant bias: Bearish    
GBPUSD dropped over 430 pips last week, almost testing the accumulation territory at 1.3850. Further bearish movement is possible this week and next week: Upwards bounces should be taken as short-selling opportunities. Just as it was predicted at the beginning of February 2016, GBP pairs are trending significantly downwards and they would remain under bearish pressure. However, around the end of March, GBP pairs would start rallying significantly.  

USDJPY
Dominant bias: Bearish   
In the middle of last week, this currency trading instrument started a bullish correction that has actually become a threat to the recent bearish outlook on the market. This trading instrument should continue going further upwards this week, until the recent bearish outlook is rendered completely invalid. On timeframes lower than the 4-hour chart, there are already bullish signals. The bullish correction is also visible on other JPY pairs, which would most probably be seen making commendable bullish efforts this week and next. The outlook on JPY pairs is bright for the month of March.   
     
                                                                                                                               
EURJPY
Dominant bias: Bearish
EUR/JPY cross moved lower last week, reaching the demand zone at 122.50 on Wednesday, February 24, 2016. Since then, price has gone up more than 200 pips – a sort of bullish correction that is also visible on other JPY pairs. Further northward movement of 250 pips would lead to a Bullish Confirmation Pattern in the market; otherwise price could test the demand zone at 122.50 again, owing to bearish reprisals (though it is unlikely that price would go below that demand zone).

This forecast is concluded with the quote below:

“I love the lifestyle of being a trader. I get to run my own business and set my own schedule. They say you should do what you love, and this is exactly what I love. What is there not to love? I wake up, take a few trades during the day, and I'm done! I can move on and enjoy the rest of my day. The best part of this life for me is that it allows me more time to spend with my children. I would not have this flexibility if I worked an 80-hour week in corporate America.” - Richard Mazur (Source: Collective2)



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


Friday, February 26, 2016

3 Questions Traders Would Like to Ask Right Now

“The moral of the story is that you don’t know, I don’t know, nobody knows where price will go. Anybody who does claim to know either doesn’t understand how markets work, is selling something, or is delusional.” – Chris Tate

PEOPLE AREN’T WHAT THEY CLAIM TO BE
Why is there so much pretense among those who claim to have mastered trading?

Answer: Many experts tend to think they know what the markets will be doing next. While we’ve tools that can help us in doing this, we can never be sure, because we don’t really know the future. There are many people who’re overconfident when they get hold of a new trading system or an analytical tool. They think they’re wizards, but they’re not.

There are traders who talk with overconfidence, behaving as though they were in total control of the markets. But when they face the real battle, they flounder.

One woman was trained by a popular Forex trading institute in her country. After the training, she still experienced frustrating challenges. When she met me, she told me that the guys who trained her didn’t know anything about trading.

The woman was wrong (though I didn’t tell her so). The guys who trained her have lots of knowledge… only that they can’t predict the future. I also don’t know anything because I can’t predict the future.

That means official/senior/market analysts don’t know the future. What we do is best called educated guesses. Trading experts don’t know the future, yet they make profits. It’s better then to let our clients/trainees know that we don’t know what the price will do next, but we can survive without knowing that. That’s better than giving people a false impression that we can accurately predict the markets: this would make them hate us when they find out we can’t.

For instance, experts agree that it’s better to select trending instruments when considering a trade. An instrument that’s trending ought to continue doing so. Choosing a trendless instrument may be suicidal (unless one’s a scalper) because both buyers and sellers might lose. A trendless market may continue to be trendless. But one may enter a trending market and it would then start consolidating; whereas a consolidating market might start a serious trending movement. In reality we don’t know what may happen next. 

3 QUESTIONS TRADERS WOULD LIKE TO ASK RIGHT NOW
Like trading skeptics, many who’ve suffered losses or tragedy are unable to find satisfying answers to the questions below. Some become apathetic towards trading. Others mayn’t entirely quit trading, but they become inactive.

It’s not that those who’re apathetic or inactive are completely unfamiliar with secrets of trading success. On the contrary, their experience with the so-called experts is often what pushes them towards apathy. Many liars who pose as successful traders, they feel, have failed to answer tough questions in trading. What kind of questions? Paradoxically, they’re always the same that people who claim to be experts struggle with.

Many members of the public believe that the fact that over 90% of traders lose proves that success in impossible. Others, though, who have come to understand why over 90% of traders lose, are confident that success is possible.

Why is trading so difficult?

Answer: As it’s being mentioned in the subheading, “PEOPLE AREN’T WHAT THEY CLAIM TO BE,” what makes trading appear very difficult is the fact that the market can never be predicted. When we predict, we’re sometimes wrong or right. However, having an impression that the market can be predicted is the single most important reason why most traders end of getting frustrated. No matter the analytical method you use (Monte Carlo, Neural Networks, Horology, robots, Gann, news, Ichimoku, etc), you can’t predict the future. Your frustration will continue as long as you think you can predict the market. Once you admit you can’t do this, your frustration ends, because you’ve aligned yourself with the reality in the market.

What benefit can I get from trading?

Answer: Freedom. Freedom is everything. You master your financial destiny, growing richer and richer gradually. Very soon, you’ll realize that trading is the best vehicle for financial freedom; plus the greatest game on earth.  Sadly, many people don’t believe this fact.

How can I experience permanent success in the markets?

Answer: You’ll attain permanent success once you devise a way to make money in the market without being able to predict the market – without knowing what the market will do next. This kind of strategy isn’t hard to devise. You’ll then see each new trade as a potential loser until you’re proven otherwise. This mindset would enable you to activate stops and use a small position size. You’ll know trading is simply a game of probability and with a good RRR, the odds would eventually come in you favor. This is what’s called positive expectancy. With this simple approach, you’ll no longer see trading as difficult. More importantly, you’ll attain permanent success without the ability to know the future, which begins from your mind.

If you don’t know those who’re successful in trading, there are many of them and I know some of them.

This piece is ended by the quote below:

“Your trading system has a set of rules. When you don’t follow the rules, it’s a mistake. And if you don’t have rules, then everything you are doing is a mistake. Even with rules, most traders probably trade somewhere below 80% efficiency. When you make two mistakes in ten trades, you are at 80% efficiency and that may be a low enough level to destroy the positive expectancy of a system. Below 80% will turn a winning system into a losing system. Rather than acknowledge their mistakes, however, most people just blame the markets or decide their system is no good. But until you acknowledge your mistakes, you are not being responsible for them and you cannot fix them.” – Dr. Van K. Tharp (Source: Vantharp.com)



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

Tuesday, February 23, 2016

Annual Trading Forecast on Bank of America (2016)

Bank of America stock (NYSE:BAC) has been coming down significantly in the past few months, going further and further south. This is a trend that is expected to continue this year.

After consolidating in the months of November and December 2015, the price went below the lower Trendline at the beginning of the year 2016. The recent price action reveals that upward bounces have proffered short-selling opportunities.

The recent upward bounce in the daily chart is another short-selling opportunity, for the RSI period 14 is still below the level 50. Bank of America would reach the demand level at 5.00 this year.

This forecast is ended by the quote below:

“The markets haven’t been easy for the last few months and I don’t expect them to get any easier in the short term. Liquidity in a lot of stocks is awful at the moment, with risk capital being reduced.” – CityTrader (Source: Trade2win)


 Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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

Annual Trading Forecast on HSBC Holdings (2016)

HSBC Holdings shares (LSE:HSBA) are currently weak, having gone down significantly this year, following the volatile months of October – December 2015.

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 4 EMAs are sloping downwards. Any bullish retracements into the EMAs 10 or 20 should be taken as “sell” signals, especially when it is followed by a bearish candle.

Unless a Golden Cross happens in the market, the most sensible thing to do on HSBC Holdings is to seek short trades.

This forecast is ended by the quote below:

“Ultimately, I bear in mind the old saying: ‘there are only two types of losses: big or small. Choose which yours will be.” – CityTrader (Source: Trade2win) 

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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


Sunday, February 21, 2016

Daily analysis of major pairs for February 22, 2016

The EUR/JPY first went upwards last Monday (February 15, 2016). On the following day, the market started dropping gradually from the high of the day, reaching the demand zone at 125.00 on Friday. This was a movement of 300 pips; plus the chances of the EUR/JPY going upwards are very slim, unless the Yen loses strength in a significant mode. The market could thus reach the demand zones at 124.50 and 124.00 this week.    

EUR/USD: The EUR/USD moved lower on Monday and then consolidated throughout last week. A closer look at the market shows that the ongoing consolidation is to the downside. Since the EMA 11 is below the EMA 56 and the Williams’ % Range period 20 is not far from the oversold region, it could be deduced that the current consolidation to the downside is a threat to the recent bullish outlook, which could invalidate it as soon as the price goes below the support line at 1.1000. 



USD/CHF: This pair moved upwards by 200 pips last week, reaching the resistance level at 0.9950 and meeting a great opposition there. Since there is a new Bullish Confirmation Pattern in the chart, further northward movement is possible this week, which would reinforce the extant Bullish Confirmation Pattern.

GBP/USD: The Cable dropped by 250 pips last week and later met a stubborn opposition at the accumulation territory of 1.4250, which has resisted further southward movement in spite of attacks into it. The bears must do all they can to break that accumulation territory to the downside; otherwise the noteworthy rally we saw on last Friday, February 19, 2016, could end up being a threat to the bearish bias on the market.

USD/JPY: Here, what happened on Monday, February 15, 2016 was just an upward bounce in the context of an uptrend. The market has moved south gradually since then, dropping by 220 pips and thus reinforcing the extant bearish bias in the market. The demand levels at 111.50 and 111.00 could be tried this week. 

EUR/JPY: The EUR/JPY first went upwards last Monday (February 15, 2016). On the following day, the market started dropping gradually from the high of the day, reaching the demand zone at 125.00 on Friday. This was a movement of 300 pips; plus the chances of the EUR/JPY going upwards are very slim, unless the Yen loses strength in a significant mode. The market could thus reach the demand zones at 124.50 and 124.00 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, February 20, 2016

Weekly Trading Forecasts on Major Pairs (February 22 - 26, 2016)

Here’s the market outlook for the week:
                                          
EURUSD
Dominant bias: Bullish   
This pair went slightly downwards on Monday and moved sideways for the rest of the week. A closer look at the chart revealed a consolidation to the downside, which threatens the recent bullish bias.  For the bias not to turn bearish, bulls must prevent bears from pushing price below the support line at 1.1000. In case bulls succeed in doing this, we may see the price going upwards this week, thereby ending the threat to the recent bullish bias.    

USDCHF
Dominant bias: Bearish
USDCHF went up 170 pips last week, but it met a strong opposition at the resistance level of 0.9950. Price was unable to go above that resistance level in spite of several attempts to breach it. This week, the movement of USDCHF would be largely determined by whatever happens to EURUSD. USDCHF may experience great difficulty in breaking the resistance level at 1.0000 to the upside (an event that could end the current bearish bias in the market). Failure to do this could reinforce the bearish bias, which is currently under threat from bulls.  

GBPUSD
Dominant bias: Neutral     
From the high of Monday, Cable dropped by 280 pips, reaching the accumulation territory at 1.4250 on Wednesday, February 17, 2016. The accumulation territory at 1.4250 has proven to be a recalcitrant barrier to bears, for the price could not go below it in spite of forays into it, and this has forced Cable into a neutral phase. The market ended on Friday with a strong upward bounce, which might be a short selling opportunity unless the distribution territories at 1.4550 and 1.4600 are overcome. 

USDJPY
Dominant bias: Bearish   
This market rallied 120 pips on Monday – resulting in a better entry price for sellers. From the high of Tuesday (114.87), price dropped by 240 pips, to close at 112.64 on Friday. There is a clean Bearish Confirmation Pattern in the market, which indicates the possibility of price going further south, reaching the demand levels at 111.50 and 111.00. The chances of JPY pairs rallying significantly this month are now slim.
     
                                                                                                                               
EURJPY
Dominant bias: Bearish
In the context of a downtrend, EURJPY cross went upwards on Monday and started coming down from the high of Tuesday.  From Tuesday, price came down gradually by 300 pips, reaching the demand zone at 125.00 on Friday. There is an ongoing bearish signal on this cross, which may enable it to move further southward by at least, 200 pips this week, reaching the demand zones at 124.50 and 123.50. Only a sudden weakness in the Yen would cause this cross to skyrocket.

This forecast is concluded with the quote below:

“As you fully understand “your trading game” and know how the markets are functioning, you greatly increase your probability of success. Most of all, you will have “fun” trading — independent of winning or losing. If you do not enjoy yourself trading, then you are probably not trading the right systems – ones that fit you.” - Gabriel Grammatidis



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





Thursday, February 18, 2016

Andreas Halvorsen: One of the Most Efficient Fund Managers

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 3

“Since 2003, I have traded the financial markets with my own capital using self-developed, quant-based strategies. The more I have learned and observed as a full time trader, educator and participant in the trading industry, the more motivated I have become to correct the gross and dangerous misinformation bombarding today’s active investors.” – Scott Andrews

Name: Andreas Halvorsen
Year of birth: About 1961
Nationality: Norwegian/American
Occupation: Hedge fund executive

ONE OF THE BEST PERFORMING TRADERS
Andreas was born in Norway. He graduated from the Norwegian Naval Academy and became a leader of a Norwegian SEAL team. He also earned a BA in 1986, from Williams College and later earned his MBA from Stanford University School of Business in 1990.

He served under Julian Robertson (the father of hedge funds), working at Tiger Fund Management and attaining a senior position. After leaving Tiger, he co-founded Viking Global Investors LP in 1999; a hugely successful funds management firm. Andreas is often referred to as one of the best fund managers in the world.

In the year 2012, the firm was managing about $16.7 billion. Later the firm was managing more than $30 billion – a testimony to strong performances and reliability of the firm. Andreas has been mentioned as one of the highest earning fund managers, placing 11th in Forbes' 2012 rankings and 9th in 2015, according to Institutional Investor's Alpha.

As of October 2015, Andreas was worth $2.8 billion. He’s married to Diane: They’ve three children and live in Darien, Connecticut, USA.

What You Need to Know:
  1. Certain persons joined trading companies that once performed very well and later went kaput. As a result of that, they swore to never have anything to do with trading again. Andreas is different. He once worked at Tiger Fund Management, which performed very well in the first several years and later suffered heavy losses. Andreas left Tiger and co-founded another trading firm - Viking Global Investors – which is now hugely successful. If you were Andreas, you’d possibly never trade again after witnessing what happened to Tiger. However, you might now covet his $2.8 billion USD net worth. Any lesson? No matter what your trading experience is, NEVER give up!

  1. The Viking Global Equities made roughly 23% returns in 2013. Like Andreas, there are super/master traders. In the year 2014, a smaller of the firm’s funds generated about 38.4%. There are talented traders. There are profitable traders. There are many of them in this world. They faced the same challenges you’re now facing. You can overcome your trading challenges; just as they did. You can become a super/master trader, talented and profitable trader. Trading mastery is already within you.

  1. Since its start in 1999, Viking Global Investors has made a profit of about 22% per annum, but not without occasional losses. According to one source, the fund was making losses from September 2001 to March 2002, when the portfolio was down 12%. Was that another reason to quit trading? No! The fund has been hugely successful overall. You can have some losing weeks, months (even years), but you should be successful overall. Transitory losses should never discourage you.  

Conclusion: When you risk about 3% – 8% of your account per trade, thus facing the consequences. Experience will later force you to reduce the risk per trade. Later, you’d even reduce the risk further. Experience is the best teacher.

The quote below ends this article:

“You can always make money back when you’ve lost it.” – James Altucher 
  


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

Wednesday, February 17, 2016

Annual Trading Forecast on Microsoft (2016)

Microsoft stock (NASDAQ:MSFT) managed to go upwards from September 2015 to January 2016. From February 2016, the price has been corrected lower, which was contained at the lower Trendline in the chart.


Right now, there is no “buy” signal in the market, but it is much more likely that a “buy” signal would soon form: as soon as the price goes above the upper Trendline and the RSI period 20 goes above the level 50. Then the price would move further upwards.

In case the price goes below the lower Trendline and the RSI period 20 goes below the level 50, the bulls would be forced to cover their positions as the price goes further south.

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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


Annual Trading Forecast on Lloyds (2016)

Lloyds shares (LSE:LLOY) are in a major downtrend, which has been in place since the last several months. Adamant buyers would have lost a lot in this kind of market, simply because they refuse to go with the flow of the market.

In the chart, 4 EMAs are used, 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. You can see that all the EMAs are sloping downwards, while the price goes further and further south.

Now the current upward bounce in the market is a trap – it is just a bullish correction in the context of a downtrend. While the price might retrace into the EMAs 20 and 50, the bearish bias is supposed to continue in the year 2016. The bearish outlook will be valid as long as the price does not cross the EMA 200 to the upside.

This forecast is ended by the quote below:

“Look for strategies that have a large number of trades. Seek strategies with hundreds of trades in their trading history - not dozens.” - Gianni Salerno

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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


Sunday, February 14, 2016

Daily analysis of major pairs for February 15, 2016

The EUR/JPY dropped by 450 pips last week, owing to the strength in the Yen. Even the bullish effort on the EUR was unable to prevent the smooth southward movement. The price reached the demand zone at 126.00, and it could go below it despite the current upwards bounce present in the market. The upward bounce could end up being another opportunity to go short.   

EUR/USD:  This pair went upwards by 220 pips last week, topping at the resistance line at 1.1350, before the ongoing shallow retracement, which might proffer new long opportunities. The price is above the EMA 56 (which itself is below the EMA 11). Should the Williams’ % Range period 20 saunter into the oversold territory, another “buy” signal might be triggered.



USD/CHF: There is a strong Bearish Confirmation Pattern in the USD/CHF 4-hour chart. Price dropped by more than 250 pips last week, going briefly below the support level at 0.9700 before coming upwards a bit. Since the USD is weak against the EUR and the CHF, it is logical to conclude that the USD/CHF price would come further south this week, testing the support levels at 0.9700 and 0.9600.

GBP/USD:  This Cable simply traded sideways last week, though in the context of an uptrend. There is going to be a breakout this week, which would either take the price above the distribution territory at 1.4600, supporting the recent bullish outlook; Or the price would go below the accumulation territory at 1.4350, leading to a bearish signal.

USD/JPY: The USD/JPY dropped sharply last week – in a continuation of the strong bearish bias that started on January 29, 2016.Last week, the price dropped by 600 pips (from the weekly high on Monday) before the current upward bounce. In spite of the current near-term rally in the context of a downtrend, there is still a possibility of further southerly movement.

EUR/JPY: The EUR/JPY dropped by 450 pips last week, owing to the strength in the Yen. Even the bullish effort on the EUR was unable to prevent the smooth southward movement. The price reached the demand zone at 126.00, and it could go below it despite the current upwards bounce present in the market. The upward bounce could end up being another opportunity to go short.  

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, February 13, 2016

Weekly Trading Forecasts on Major Pairs (February 15 - 19, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish   
EURUSD moved upwards by 230 pips last week, topping at the resistance line of 1.1350, before the current bearish correction. From that resistance line, price got corrected by 100 pips while the bias on the market remains bullish. There is a need for price to go above that resistance line this week, aiming for other resistance lines at 1.1400 and 1.1450. Otherwise, bears might overcome bulls and manage to push price further south.   

USDCHF
Dominant bias: Bearish
This pair has proven to be one of the strongest trending among the majors. Price dropped by roughly 260 pips last week, moving briefly below the support level at 0.9700. Then price turned upwards, making a shallow bullish effort. The bullish effort cannot render the current bearish bias invalid unless price goes above the resistance levels at 0.9900 and 1.0000, which is not an easy task, given the ongoing bearish sentiment in the market. USDCHF is suffering from all-round attacks, for EURUSD is up, causing USDCHF to remain under pressure, and CHF itself is strong (see CHF pairs). Eventually, the shallow bullish effort in the market might turn out to be another shallow short-selling opportunity.    

GBPUSD
Dominant bias: Bullish    
Cable merely consolidated throughout last week, in the context of a medium-term uptrend. The presence of bulls is still visible in the market, though it is possible for them to be subdued by bears any time. A movement above the distribution territories at 1.4600 and 1.4650 would reinforce the current bullish effort, while a movement below the accumulation territories at 1.4350 and 1.4300 would invalidate it.

USDJPY
Dominant bias: Bearish   
The price has gone down by 600 pips this week, and it has gone down by 1000 pips since January 29, 2016. The demand level at 111.50 was tried before the upward bounce that happened on Friday, February 12, 2016. The upward bounce is another opportunity to go short while the bearish trend lasts. The bias on JPY pairs is currently bearish, although that does not rule out the possibility of them rallying before the end of this month.
.     
                                                                                                                               
EURJPY
Dominant bias: Bearish
This cross experienced a large pullback last week, going down by 450 pips and reaching the demand zone at 126.00. Thus time around the stamina in EUR has been unable to cause it to withstand the assault from JPY (as it is true of some other EUR pairs). It is logical to assume further southerly movement in the market, due to a strong Bearish Confirmation Pattern in the market. Along the way, upward bounces might be ignored as long as it is clear that bears are in control. 

This forecast is concluded with the quote below:

“Almost all of my trading is mechanical — 100% based on rules I have tested and found to be valid. I tend to ignore news of the day, fundamental information and adverse “big picture” scenarios because these do not impact my systems greatly. Sometimes, these factors affect my results in the short term, but over the long term, the systems have a positive expectancy.” - Kevin J. Davey


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




Thursday, February 11, 2016

Why Victorious Traders, Investors, and Funds Managers Are Paid Extremely Huge Amounts of Money

What you have to understand is that you're competing in an environment full of very talented, smart and highly motivated competitors. The guy on the other side of the trade, is as eager to make money as you are. This forces you to constantly improve your trading and adapt quickly. If and when you stop, your competition won’t, and they’ll quickly be ahead of you. - Marco Mayer (source: Tradingeducators.com)

Trading is one of the toughest and the most difficult professions in the world, as well as one of the most rewarding. The public hate trading because they feel it’s too tough for them.

“I am convinced that fewer than one percent of all beginners go on to be and remain successful in day trading,” says Dr. Brett N. Steenbarger. What about swing trading, position trading and investing? The statistics may improve considerably, but they’re still less than 10% of all market speculators.

Members of the public shy away from trading, even discouraging others who’re doing it, since they think it’s a gamble. Then why not abandon trading and look for a job that guarantees a paycheck every week or every month?

Recently, in one Asian country, 2.3 million candidates apply for just 368 low-level government jobs. The jobs pay 243 USD (before taxes) a month and will involve making tea and passing files between government offices. Requirements for the 368 jobs include having finished primary school and being able to ride a bike. The applicants included at least 255 people with doctorates and 150,000 graduates.

In certain lands, many a university graduates receive less than 50 USD per month (less than $600 per annum).  

In a country where population is exploding, with more and more houses being built and new sites being cleared to make way for housing, but fewer and fewer industries are established, what would you expect? In a country where millions of people go to tertiary institutions, graduating en masse every year, but fewer and fewer gainful jobs are created, what would you expect?

The uncertainties in the world are now greater than the uncertainties in trading: Companies downsizing constantly, governments owing salaries, incomes getting slashed and slashed, the fear of a sudden dismissal, economic changes that have adverse effects on small and big businesses, etc. We’re living in hard times. 

Many people are poor because they’re looking for easy, guaranteed ways, to earn income. They don’t want to take risks, and therefore, they choose trade, jobs, professions that make them confortable. Millions of people rush into such jobs, thereby driving the income lower and lower because the supply of personnel, workers, self-employed people, and so on, is higher than the demand.

In such situation, the only means of survival is to reduce what you’re paid more and more. Nonetheless, when you’ve a career that too many people think they can’t do because it’s difficult, you’ve the chance to demand a high pay. People won’t have a choice than to pay – for demand for experts is very high and supply is extremely low.

If people are doing easy jobs, thinking they must be well paid, employers/customers/clients will immediately get people who can do the jobs/services better for lower pay.

The easier a job is, the more people will rush into it, and the lower the pay will be. That’s the reasons why most people who work for themselves and others remain poor. Take petty trading, commercial tricycle riding, office assistants, etc., for examples. What other examples can you think of?  I was poor when I was working as a private teacher.

The more difficult a job is, the fewer people will go into it, and the higher the pay will be. That’s the reason why those who can do those mentally challenging jobs are highly paid. Take programming, astronomy, surgery, oil rig engineering, etc., for examples. What other examples can you think of? I became financially free when I found a way to trade Forex victoriously.

I know how much suffering going on around me. People working hard, struggling every day, yet they’re poor. I know those who’ve worked for decades, but have nothing to show for their many years of labor, save for economic survival. I could’ve easily fallen into that lot if not for trading which the Providence used to rescue me. I could be telling the same story like many others who struggle, but remain poor.

In the year 2013, the 10th highest paid trader went home with $600 million. Which company in the world would ever pay you such amount of money per year ($50 million per month)? The 10th highest paid trader didn’t get that huge income in one year because he’s a collection of PhDs, but because he can do what billions of people can’t do – consistently successful trading.

Pareto’s Law and Trading
The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes; says Wikipedia

Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population.

More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:

20% of the input creates 80% of the result
20% of the workers produce 80% of the result
20% of the customers create 80% of the revenue
20% of the bugs cause 80% of the crashes
20% of the features cause 80% of the usage
And on and on… - By Kalid Azad (Source: Betterexplained.com)

Can it be said that 20% of the traders make 80% of the profits?

One source says that there are over 50 million active Forex traders worldwide, and the number is rapidly increasing. But 1, 2, 3, and 5% or maximum of 10 % make money.

When talking about the number one source of profits for traders, Dima Vonko, mentions that, our fellow traders, specifically those who are less knowledgeable, less experienced or simply too slow on the draw, can be a source of profit for us. Of course, the traders are out to make money, but many of them will also lose money. Here we can profit by applying better trading skills and better quality trading systems.

Retail Traders Also Have Their Advantages
There are always interesting events that move the markets; which are major sources of concern to investors/traders. In May/June 2015, investors were most concerned about geopolitical crises. In June/July, they were worried mostly about the Eurozone breakdown. In August, they were most afraid of China recession. That was what was happening at the time of writing this article.

Traders like you and me also have certain advantages over institutional traders. We can go long and short at will, since we’re not bound as institutional traders are; although our freedom to do what we like also has a serious demerit. We can open our small positions without being noticed, unlike big players. We can move into or out of the markets faster than institutional traders

Seeing Beyond Loss
In TRADER’ magazine (August/September 2015 edition, pages 30 - 36) Mark Minervini, who’s now a legendary trader, shares his success story. When Mark began trading in the early 1980s, he endured a six-year period when he did not make any money in stocks. In fact, he had a net loss. It was not until 1989 that he began to achieve meaningful success. What kept him going? Unconditional persistence! An investment in knowledge, which takes time to acquire, is an investment in yourself, but it requires persistence.

Profits are only a by-product of a good trading plan. Try to become permanently successful. Try to be smarter than millions of traders in the world. You may ask: “How do I predict the markets accurately?” That question can’t help you. If you ask, “How can I make money without being above to predict the markets?” Then you’ll enjoy more success and popularity than you could’ve imagined, making huge amounts of money.

Trading is the best and the greatest tool for financial freedom. It’s better than any multi-level marketing systems. Please mention the highest paid multi-level marketer in the world, telling me her/his annual income. I’ll then tell you the annual income of the 20th highest paid trader in the world.

When you’re able to prove your expertise with a small account, you can be given a bigger account. If you show your expertise with the bigger account, you’ll be given another far bigger account. Your portfolios would keep on growing until you become extremely rich. You try yourself as much as possible to attain enduring success as a trader. Ultimately, you’ll find it difficult to believe how rich you’ll have become.

Conclusion: Andy Jordan, also at Tradingeducators.com, says it is difficult to recuperate from being "chewed up and spit out" by the markets. There are students of the markets who are determined enough, who will not accept defeat, and who started over again from the beginning of studying the basics, of sorting out and discarding wrong mindsets, in order to face the realities of the markets, and who learned self-control and how to run their trading in a businesslike manner. In the process, they developed stronger character as well as better skills, and emerged winners in the "game of life" and in the world of trading.

This piece is ended with the quote below:

"What is the one sentence summary of how you change the world? Always work hard on something uncomfortably exciting!" – Larry Page





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

Wednesday, February 10, 2016

Annual Trading Forecast on Apple (2016)

Apple stock (NASDAQ:AAPL) is in a major downtrend and this is a bias that is expected to continue, based on what is happening in the chart.


The major downtrend started in December 2015, and it has held out till now. Although the market has consolidated so far this week, it is below the EMA 21 on the daily chart, while the Williams’ % Range period 20 is often around the oversold territory.

It is advisable that buyers should shun Apple stock until it is clear that the bearish bias is over, i.e. until the price goes above the EMA 21. Until then, occasional rallies should be taken as short-selling opportunities.

The outlook for Apple is bearish for the year 2016.

This forecast is ended by the quote below:

“Good traders take many losses; they admit they are wrong and keep the damage small. Not having to win on every trade and taking losses when conditions indicate they should stick to what allows them to be profitable over many trades.” - Cory Mitchell

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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



Annual Trading Forecast on Barclays (2016)

Barclays shares (LSE:BARC) have been trending strongly downwards for several months and this is supposed to continue this year. A trend might last longer than what most people think, and as a result of this it is possible that the price would continue going south and south.

The ADX period 14 is above the level 40, meaning that the momentum in the market is very strong. The DM- is clearly above the DM+, showing that that the bears are in control. The MACD (default parameters), has both its histogram and its signal lines far below the zero line. There is a Bearish Confirmation Pattern in the chart.

Any upward bounces on Barclays will be a trap to impudent buyers, for the bearish movement is supposed to continue in the year 2016.

This forecast is ended by the quote below:


“Biggest mistake I made in 2015 was somehow believing oil would bounce back. Respected oilman Dan Dicker sure had me fooled. My comfort philosophy, "first mistake is a lesson, second mistake is stupidity.” – Jones75 (Source: Elitetrader)

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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



Sunday, February 7, 2016

Resistance To Change

Whilst browsing I came across this piece – it looks at the early resistance to the use of anaesthetics. We take for granted that when we have a surgical procedure done that we will be asleep for the duration. However,this is a relatively new phenomena, previous generations had to tolerate surgery as it was fully awake or drugged insensate by whatever primitive methods they had such as alcohol or opium preparations such as laudanum.


What is intriguing about this piece is the profound resistance to change within the medical community despite the clear benefits that anaesthesia brought to not only the patient but also the surgical team. One can only wonder what it was like to be a participant in an activity of cutting someone open whilst they were awake. It is no small wonder that surgeons in Victorian times could amputate a leg in around 30 seconds.

It is interesting that whilst some arguments against the use of anaesthesia might have been relevant such as potential complications.This was a very new procedure and it still had many bugs to be worked out. This is a natural and acceptable caution. However, some of the objections were based upon appeals to the bible – suffering is good because it says so  in the bible. Others were simple professional jealousy.

What this is instructive of is the profoundly difficult nature of change. It could be argued that the resistance to change in this example was a profession wide resistance, in part based upon sound reasoning and in part based upon idiotic appeals to magical thinking. However, decisions not to change are individual decisions. The desire not to take up this new technique which had obvious advantages was done at the level of the individual. Change is a function of the individual and individual are remarkably resistant to change, even in the face of evidence. This is particularly true in light of acknowledging our own failings – we struggle to see ourselves clearly and even when we do it is difficult to change on the basis of what we have observed.




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




Daily analysis of major pairs for February 8, 2016

The USD/JPY dropped by roughly 500 pips last week, testing the demand level at 116.50. The massive drop was partly due to the perceived weakness in USD, and the bearish movement might continue this week, targeting the demand levels at 116.00 and 115.50. In view of this, long trades are not recommended until it is clear that the bulls have regained control.      

EUR/USD:  Owing to the surprise and unexpected stamina in the USD, this pair rose upward by over 400 pips last week. In the 4-hour chart, the EMA 11 is above the EMA 56, while the Williams’ % Range period 20 is not far from the overbought region. Even, the bearish correction that was witnessed last Friday was merely a sale in the context of a downtrend, for the price might turn further upward, targeting the resistance lines at 1.1250 and 1.1300.


USD/CHF:  From the high attained on January 29, 2016, the USD/CHF dropped by 500 pips, testing the support level at 0.9900 last week. This price action has resulted in a Bearish Confirmation Pattern in the chart, which might enable the price to reach the support levels at 0.9850 and 0.9800 this week.

GBP/USD:  From the low of Friday, January 29, 2016, this currency trading instrument moved upwards by 500 pips, testing the distribution territory at 1.4650. However, the price came down by 200 pips on February 5, 2016, underlining the precarious nature of the GBP. While the GBP is strong against the USD, it is weak against other currencies (GBP/CHF, GBPCAD, etc.), since the outlook on GBP pairs remains bearish for the month of February. A further southward movement of 200 pips could put an end to the extant bullish bias.

USD/JPY:  The USD/JPY dropped by roughly 500 pips last week, testing the demand level at 116.50. The massive drop was partly due to the perceived weakness in USD, and the bearish movement might continue this week, targeting the demand levels at 116.00 and 115.50. In view of this, long trades are not recommended until it is clear that the bulls have regained control.     

EUR/JPY: Unlike most other JPY pairs, the EUR/JPY has not moved down significantly. In fact, the bias on the cross is bullish and as long as the EUR is strong. The outlook on JPY pairs is bullish for this month, and therefore, those weak JPY pairs like GBP/JPY, AUD/JPY and NZD/JPY, might also end their southward journeys and move upwards (this week or next week). EUR/JPY might go further upwards and recover the losses it sustained last 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, February 6, 2016

Weekly Trading Forecasts on Major Pairs (February 8 - 12, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish   
This pair was engaged in a smooth bullish run last week, moving upwards 420 pips before the bearish retracement that was seen on Friday (February 5, 2016). The bearish retracement could be taken as a sale in the context of an uptrend, for the uptrend might continue this week. As long as price is above the support line at 1.0950, the bullish bias cannot be threatened. The resistance lines at 1.1250 and 1.1300 are the potential targets for bulls this week.  

USDCHF
Dominant bias: Bearish
Owing to the perceived weakness in USD, USDCHF dropped 340 pips last week, ending the recent bullish outlook on the market. The support level at 0.9900 was tried, before the current upward bounce, which is, however, shallow. That support level at 0.9900 could be retried again and get breached to the downside, as price possibly attains the support levels at 0.9850 and 0.9800 this week.  It must be noted that the market is now below the psychological level at 1.0000; so it might be difficult for bulls to effect any bullish changes that would take the price above that level. In case the psychological level at 1.0000 is broken to the upside, then a rally that would eventually threaten the bearish bias might begin.  

GBPUSD
Dominant bias: Bullish    
From the low of January 29, 2016, Cable rose steeply, testing the distribution territory at 1.4650 on Thursday, February 4, 2016. From that distribution territory, price has come down by 200 pips, on the following day. That correction is a proof of the vulnerability of the ongoing strength in Sterling, for the outlook on GBP pairs remains bearish for this month. While GBP is strong versus USD, it is weak against certain other currencies, for instance, GBPJPY, GBPCHF, EURGBP, etc. The market might resume a rally this week, albeit further bearish correction of another 200 pips would put an end to the current bullish outlook.

USDJPY
Dominant bias: Bearish   
The sudden and unexpected weakness of this currency trading instrument was partly due to the weakness of USD. On January 29, 2016, price touched the supply level at 121.50 and dropped 500 pips in the following week, which has resulted in an undisputed Bearish Confirmation Pattern in the market. Long trades are not currently logical until there is a clear indication that bulls have taken control again. Right now, bears are the ones in control.     
                                                                                                                               
EURJPY
Dominant bias: Bullish
Unlike other JPY pairs (e.g. NZDJPY, AUDJPY, etc.), EURJPY did not come down significantly because of the strength in EUR itself. Last week, price came down only by 160 pips – a movement that was not strong enough to invalidate the bullish bias on the market. Only a movement below the demand zone at 128.50 would put an end to the extant bullish bias, as price is expected to rally this week or next. It would be mentioned that JPY pairs still have the possibility of rallying this month.

This forecast is concluded with the quote below:

“As I have matured as a trader I have become better at dealing with the emotions that
come with trading. That has come simply from exposure, self-awareness and time.”  – Rachel Shasha




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

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