ITU GLOBAL MARKET REVIEWS

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Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

And my past articles are also available at: www.ituglobalforex.blogspot.com

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Thursday, July 7, 2011

Weekly Trading Update (July 8, 2011)

“You need to remind yourself, repeatedly, that trading can be learned, and that you don't need to be a "natural-born trader" to succeed in this business. Don't expect to trade skillfully immediately. But do study your wins and losses to understand what you are doing well and where you need to improve.” – Joe Ross

Hello:

By making use of simulation mode, a trader who uses backtesting carries out performance of a trading system on past market data; something market speculators use to discover good trading ideas and get rid of ineffectual ideas. The reason for this is because market speculators conclude that if a trading idea is effective on the past market data, there are probabilities that it’d work in future. You mustn’t forget that backtesting is just an experiment which isn’t an assurance of tomorrow’s survival. It’s not possible to duplicate the trading conditions seen in historical data exactly, and simulation programs use hypothesis to generate predictive signals – eventually showing the difference between good and faulty backtesting. The less fantasy traders entertain, and the more honest they’re with their backtesting results – the more proficient trading ideas would be.

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bullish

Owing to the bullish continuation experienced on this pair this week, the trend has turned bullish. This may present good chances for speculators to buy a pullback – something I’m planning to do myself. This bias could be overturned only with sustained strength in the USD.

NZDUSD

Primary trend: Bullish

My long trade on this pair is still in a positive territory. I’d raise the stop to breakeven once the profit reaches around 70 pips; unless the market turns. When a market turns, traders generally wonder how significant it is.

Order: Buy

Entry date: June 30, 2011

Entry price: 0.8265

Stop loss: 0.8157

Trailing stop: N/A

Take profit: 0.8857

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 63 pips

EURCAD

Primary trend: Bearish

The market is moving down slowly but steadily. If the support at 1.3700 is broken, the bearish move may be carried on with renewed steam, especially now that it seems the days of the strength of the EUR are numbered. I’m looking for a way to go short.

EURAUD

Primary trend: Bullish

Given the recent lease of strength in the Aussie, it’s no surprise that the cross is in a southbound mode. The major trend is still bullish, but the bulls are only fighting a losing battle. Seasoned market speculators sometimes sell into market strength – anticipating weakness.

EURNZD

Primary trend: Bearish

Sellers are dominating here right now. The price is quoted below the SMA50 and SMA 200. The ADX 20 level is pointing towards 30, suggesting that the current price movement may only become more serious. The -DI is also above the +DI. . I’ve a short trade on the cross.

Order: Buy

Entry date: June 30, 2011

Entry price: 1.7531

Stop loss: 1.7649

Trailing stop: 1.7381

Take profit: 1.6949

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 285 pips

AUDJPY

Primary trend: Bullish

My plan is to go long any moment from now; at a reasonable price. This seems to be the beginning of a new bullish phase. The price has moved up from a temporary consolidation phase. While the ascension of the price suggested that the market was poised to continue upwards, there was of course, no guarantee.

Conclusion: Some people deplore trading as a bad way of life. You can help to prove them liars! How? By remaining committed to your trading goals, by using positive expectancy systems, and demonstrating that trading portfolios can survive the unpredictability of the markets thru good trading safety measures. As traders, there’s nothing more precious that we could do in the markets than to embrace measures that ensure the safety of our portfolios.

The article is ended with the quotes below:

1. “…What separates those who excel from those who only wish they could is a willingness to turn failure into feedback, losses into lessons and focus their attention on doing only what it takes to get the consistent results that they want.” – Dr. Woody Johnson

2. “Believe in yourself and all that you are. Know that there is something inside you that is greater than any obstacle.” – Christian D. Larson

3. “After all - if you never actually pull the trigger, you’re never going to profit.” – Forex Round Up

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

And my past articles are also available at: www.ituglobalforex.blogspot.com

Yahoo! Messenger ID: saazalmu

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Weekly Trading Update (July 8, 2011)

Hello:

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bullish

NZDUSD

Primary trend: Bullish

Order: Buy

Entry date: June 30, 2011

Entry price: 0.8265

Stop loss: 0.8157

Trailing stop: N/A

Take profit: 0.8857

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 63 pips

EURCAD

Primary trend: Bearish

EURAUD

Primary trend: Bullish

EURNZD

Primary trend: Bearish

Order: Buy

Entry date: June 30, 2011

Entry price: 1.7531

Stop loss: 1.7649

Trailing stop: 1.7381

Take profit: 1.6949

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 285 pips

AUDJPY

Primary trend: Bullish

The article is ended with the quotes below:

2. “Believe in yourself and all that you are. Know that there is something inside you that is greater than any obstacle.” – Christian D. Larson

3. “After all - if you never actually pull the trigger, you’re never going to profit.” – Forex Round Up

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

And my past articles are also available at: www.ituglobalforex.blogspot.com

Yahoo! Messenger ID: saazalmu

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Saturday, July 2, 2011

The Change from 4 Decimals to 5 Decimals

“Trading is not easy; however, becoming a trader is very easy. There are no obstacles whatsoever to anyone opening a trading account. I have long said that if trading were easy, big money would make the entry requirements so steep that it would be impossible for an average person to trade. Big money might do this through an education and exam system that would weed out most people. Even today, brokers have to take a Series 7 exam; however, passing this exam has nothing to do with success in the market.” - Dr. Van K. Tharp

Hello:

Many brokers’ platforms now use the 5th decimal place. Trading with a 5th decimal point can reduce the difference between the buy and sell price of a currency pair. The fifth decimal trading allows brokers to provide better execution and liquidity for clients. Some brokers are thus able to allow tighter spreads, more accurate pricing execution and better liquidity with less slippage. The tendency towards tighter spreads and better execution has been happening for some years. This has been made possible by improved prices that brokers are now receiving from their liquidity providers and should enable them in the nearest future to reduce their normal spreads further in some pairs to their client base. This kind of improvement to pricing policy enables the concerned brokers to quote all currency pairs to an additional decimal place. It means that all JPY pairs will be quoted to 3 decimals and all other pairs to 5 decimals.

A number of brokers first introduced these changes to demo accounts to familiarize interested people with this feature, and later put the feature for their live clients.

I’ve noted that some beginner traders are often confused by these decimal places, especially if they want to set their stop and take profit, or modify them later. What makes the matter worse for newbies is that some brokers still use 4 decimals. What would a beginner do when she/he is practicing with a broker using 4 decimal places and later changes to a broker using 5 decimal places? Some brokers even retain 4 decimals to certain pairs and crosses while featuring 5 decimals for major pairs and crosses – all in the same platform.

If you’re a beginner facing this kind of challenge, this article, which was prepared with trading examples from Metatrader, is for you. It shows how I personally handle this matter. For the sake of simplicity, spreads aren’t included in the examples below.

4 Decimal Places: For platforms (and pairs and crosses) using 4 decimals, all JPY pairs/crosses are quoted to 2 decimals; other pairs/crosses are quoted to 4 decimals. For example, the USDJPY would be quoted at 80.25, and the AUDUSD would be quoted at 1.0569. If I wanted to buy the USDJPY at that 80.25, having a stop of 50 pip and a target of 80 pips in mind, I’d set my stop at 79.75 and take profit at 81.05. If I wanted to modify the stop and the target after the trade was placed, I’d just type 50 in the stop loss area and 80 in the take profit area. If my profit/loss was shown as points, and the price had moved up by 20 pips, it would simply be shown as 20. If the price moved down by 20 pips, it would simply be shown as -20.

For the AUDUSD example, if I sold the pair short at 1.0569, having a stop of 100 pips and a target of 200 pips in mind, I’d set my stop at 1.0669 and take profit at 1.0369. If I wanted to modify the stop and the target after the trade was placed, I’d just type 100 in the stop loss area and 200 in the take profit area. If my profit/loss was shown as points, and the price fell by 75 pips, it would simply be shown as 75. If the price rose by 60 pips, it would simply be shown as -60.

5 Decimal Places: For platforms (and pairs and crosses) using 5 decimals, all JPY pairs/crosses are quoted to 3 decimal places; other pairs/crosses are quoted to 5 decimals. For example, the EURJPY would be quoted at 115.292, and the USDCHF would be quoted at 0.84226. If I wanted to sell the EURJPY at that 115.292, having a stop of 70 pip and a target of 180 pips in mind, I’d set my stop at 115.992 and take profit at 113.492. If I wanted to modify the stop and the target after the trade was placed, I’d just type 700 in the stop loss area and 1800 in the take profit area. If my profit/loss was shown as points, and the price had moved down by 120 pips, it might simply be shown as 1200. If the price moved up by 55 pips, it might simply be shown as -554.

For the USDCHF example, if I bought the pair at 0.84226, having a stop of 185 pips and a target of 350 pips in mind, I’d set my stop at 0.82376 and take profit at 0.87726. If I wanted to modify the stop and target after the trade was placed, I’d just type 1850 in the stop loss area and 3500 in the take profit area. If my profit/loss was shown as points, and the price rose by 244 pips, it might simply be shown as 2449. If the price fell by 109 pips, it might be shown as -1096. When the profit/loss is being displayed on a platform using 5 decimals, the last digit is almost negligible.

The use of 4 decimal places is obviously easier, but it doesn’t matter much whether or not you’re trading on a platform that uses 4 decimals, provided you know how to set your stops and targets safely (without making costly mistakes). There are many trading platforms out there with different features (essentially leading to the same end), and every platform has dies-hard fans and opposition. The truth is, you should always practice hard to see for yourself and maybe you’d discover something that’ll help you greatly in your journey as a trader. Trading is a profession that’s definitely worth checking out.

I hope this helps a little.

Most newbies underestimate the importance of serious and protracted training by attending one-day seminars or trying to go thru short-cuts. Going back to Dr. Van’s quote above, it’s very important that you embrace trading principles that ensure your long-term survival in the markets. A good knowledge of how a trading platform functions is of little help if you can’t survive the market fluctuations as a trader. When trading, don’t get greedy: you just want to reduce your risk. If you survive long enough, you’ll eventually make money.

I end this article with one more quote from Dr. Van Tharp:

“Most people spend many years learning their profession, but anyone can start trading today. Can you imagine walking into a hospital and saying, “I think I’ll try some brain surgery today.”? It just won’t work. Yet you can open an online brokerage account, transfer in $100,000 and, suddenly, you are a trader. Trading with no preparation, however, could be as fatal to your account as performing brain surgery would be on that unlucky patient in the hospital.”

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Yahoo! Messenger ID: saazalmu

Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

And my past articles are also available at: www.ituglobalforex.blogspot.com

NB: There is risk of loss in trading, but it is possible to be a successful trader.

Friday, July 1, 2011

Weekly Trading Update (June 27 - July 1, 2011)

“Now, ask yourself, is the trend going up, down, or sideways? Once you have your answer, the wisdom of the market will have revealed itself to you, and you'll know how to trade over the next month. If your view is unclear, step aside from trading for the moment. You'll only ever make money if you can clearly spot a trend.” - Louise Bedford

Hello:

This is an update on some of the movements on the markets and what I’m doing about them, plus my losses and profits. The analyses are based on 4-hour charts, looking at the trend. My preferred leverage is 1:100 and my position size is 0.01 lots for each $2000. The risk per trade stands at 0.5%. The Stops are my life insurance policy. I use the Price Behavior rules for strategic decisions and customized indicators for tactical entries. I believe that a ‘buy’ signal that fails is a ‘sell’ signal; and a ‘sell’ signal that fails is a ‘buy’ signal. I open primary positions with a risk-to-reward of 1:6, riding the trend until the target is hit or I’m stopped out. The value of patience will forever be emphasized. As long as I stick to my rules and keep my risk low, I’m immune to fear.

It’s widely known in this industry that majority of retail traders are not successful. A determinant factor of any successful strategy is sensible risk and money management measures. Through an elaborate system of diversification and systematic position sizing, it’ll be possible for trading accounts to remain in the positive territory over the long term. And this is where the discipline of each trader’s personality is required.

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bearish

There was a serious breakout on this pair. This was a formidable threat to the bearish outlook, but the bearish outlook is still valid. Only a sustained northbound price movement could render this invalid. My last trade was exited at breakeven.

NZDUSD

Primary trend: Bullish

At the beginning of this week, the market gapped down, only to reverse the same day this happened. It’s possible that this renewed bullish strength could be halted if the USD gains any remarkable strength. That’s why I always enter with 0.5% stop - total risk guaranteed on the trade, whereas my last trade on the pair was successful.

EURCAD

Primary trend: Bullish

It seems the strength of the EUR has little effect on the CAD, yet the trend remains bullish. It may make sense to sell near a good supply level and buy near a good demand level, but there may soon be a protracted directional breakout.

EURAUD

Primary trend: Bullish

Here, buying the dips and selling the rallies may be the best options, or better, one may buy a pullback in the direction of the prevailing bias (as the price action currently confirms). I’d be looking for a nice entry price, after which I’d enter with stingy money management.

EURNZD

Primary trend: Bearish

The bearish trend still holds in the face of the present turbulent market. The price, though threatening to go up, is quoted below the SMA50 and SMA 200. The ADX 20 level is below 30, suggesting that the current price movement is not that strong. The -DI is above the +DI, but it’s pointing downwards.

AUDJPY

Primary trend: Bearish

This instrument has been going up since the beginning of this week. If this new move continues next week, the bearish outlook would be rendered invalid, and traders would do well to look for buying opportunities. If not, the bearish trend would resume. The main tool of technical analysis is neither the pencil nor the computer. It is your brain!

Order: Sell

Entry date: June 16, 2011

Entry price: 85.47

Stop loss: 86.47

Trailing stop: 85.47

Take profit: 79.51

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 102 pips

Conclusion: One of the most important challenges to any trader is being on the right side of the market. Yet better odds are on the side of a trend follower. The principles of trend-following strategies have been successfully used by many private traders and institutions. In the end, although, it’s a discretionary trader with his common sense who would execute the strategy.

The article is ended with the quotes below:

1. “Don’t be naive. They want your money, everybody wants your money. This is why FOREX is a battlefield – if you do not make profit, then profit is made by someone else…” - Sive Morten

2. “YOU are the most important factor in your trading success!

You create the results you want.” – Dr. Van K. Tharp

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Senior Analyst

FX Instructor, LLC

Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at: