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Wednesday, November 3, 2010

Weekly Trading Update (November 4, 2010)

“YOU are the most important factor in your trading success! You create the results you want.” – Dr. Van K. Tharp

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 daily charts, looking at the Big Picture, though my entries are on a smaller timeframe. My preferred leverage is 1:100 and my position size is 0.01 lots for each $1000. My maximum drawdown in a week is 3% (worst case scenario). I use the Price Behavior rules for strategic decisions and customized indicators for tactical entries. I open primary positions without predetermined exit target in mind, riding the trend for as long as it continues. 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.

In spite of the unpredictable nature of the markets, a measure of success can always be managed. Mistakes on the markets are of course, something that preferably shouldn’t happen, but we got to be thankful that risk can be controlled. Yes risk must be controlled, now that false breakouts on the markets are no longer a curiosity; and sustained trend movements are rather rare.

AUDUSD

Primary trend: Bullish

The weakness in the USD is fueling strong bullish runs on the market. There was a temporary bearish reversal on this pair last week. The reversal gave me a failed signal; and the good thing in that is the ability to control a loss. I lost 1.5%. Keep in mind that losses are essentially calculated losses. There may be plenty of them, but they should be within the parameters of the trading plan. Even if there are occasional losses, I’ll always believe in the statistics that says my strategy will recover. What I’ll never take is a big loss. If you sat there and took a big loss, you’d have been badly burnt. You’d be like a whipped dog. You’d have to slink away into a corner and lick your wound.

Order: Sell Limit

Entry date: October 29, 2010

Entry price: 0.9821

Initial stop: 0.9971

Current stop: N/A

Exit price: 0.9971

Exit date: November 2, 2010

Status: Closed

Profit/loss: -150 pips

Percentage growth: -1.5%

NZDUSD

Primary trend: Bullish

There’s a time to be a buyer and a time to be a seller. It’s time to be a buyer on this cross. This pair is still in a strong upward trend, and since you don’t know when a trend will end, you need to wait for a bearish turning point confirmed by other factors. When the NZD eventually weakens against the USD, the fall would be heavy and that’s exactly what I’m still waiting for.

EURCAD

Primary trend: Bullish

The bulls are still strong on this instrument. The trend strength is tantamount to a continuous price movement to one direction or another without any notable pullbacks. I’ll continue riding the trend until my current (adjustable) stop is hit.

Order: Buy Limit

Entry date: September 9, 2010

Entry price: 1.3100

Initial stop: 1.2950

Current stop: 1.3819

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: 1145 pips

Percentage growth: 11.4%

EURAUD

Primary trend: Bullish

My protracted pending order was eventually triggered at the price I predetermined on this instrument. I expected the price to continue moving up, since the eventual weakness in the AUD would shoot the cross higher. And if this is true, then resistance upon resistance would be broken.

Order: Buy Limit

Entry date: October 1, 2010

Entry price: 1.4000

Initial stop: 1.3850

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Open

Profit/loss: 56

Percentage growth: 0.5%

EURNZD

Primary trend: Bearish

Rather than correlate with its EURAUD counterpart, the extremely strong Kiwi is driving down this cross. However strong, some kinds of support at levels 1.8000 to 1.7800 might push the market up (especially if there’s any sudden weakness in the NZD). The price is now far below the SMA 20. The ADX 20 level is above 30, suggesting a strong downtrend. +DI is below its –DI counterpart. It might be too late to go short now, since this would give a poor risk-to-reward possibility. The next best option is to identify a good support and buy from thence.

AUDJPY

Primary trend: Bullish

The sell trade on this cross hit my adjusted stop, after which the market moved up considerably. The trend has turned bullish and it seems the momentum has just begun. Keeping your exposure on the market small is invariably necessary. If your exposure is too high, you might win a jackpot through gambling. Nonetheless the money made through gambling is soon lost back to the market, or lost to cocaine or prostitutes or any other things. The money from gambling is lost anyway.

Order: Sell Limit

Entry date: October 19, 2010

Entry price: 80.50

Initial stop: 82.00

Current stop: 79.50

Exit price: 79.50

Exit date: November 1, 2010

Status: Closed

Profit/loss: 100 pips

Percentage growth: 1%

Conclusion: Certainly, with today's technology, there is no need to sit in front of your computer all day, all week like I was doing during my novice years. Learn how to properly trade, set and forget your orders into your platform, and go enjoy life and smell the roses. You should be fine as long as your trading system is programmed in such a way that stops in the loss zone will generate a loss that is smaller than the profits generated by the stops in the profit zone. Sadly traders tend to over analyze market data and create false mental images that don’t exist.

A Joes Ross’ quote concludes this article:

‘It would seem that, for most, the only way to the top in trading is to persevere.” – Joe Ross.”

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

Email: amustapha@fxinstructor.com

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

Nice trading tips are available at: www.ituglobalforex.com

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.

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