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Saturday, July 9, 2011

Monthly Trading Report (June 2011)

“Sometimes the return of your money is more important than the return on your money.” - An old British banker

Hello:

It’s necessary that I give a monthly report of the results from the strategies I use for signals generation and trading. The trading results from my weekly trading updates aren’t discussed here, since those who follow my articles can see for themselves when I place or close trades based on the weekly analyses. The results on live and demo accounts are similar. Only position sizes are different – in proportion to each account balance.

The USDCAD Hedging strategy has been optimized to give more frequent and profitable signals. No stop loss has been hit since the inception of this trading idea on the pair. Because the USDCAD is caught in equilibrium zones most of the time, some simulation was carried out to determine whether the profitability of this strategy could be improved by reducing the fixed target per trade by 35 pips. This ensures constant survival in the market in which both buyers and sellers are often stopped out. Nonetheless this kind of reduction would make less sense in a strongly trending market. A future article from me will explain the details of this optimization. In the month of June, our equity grew by an additional 9.5% (closed profits). The total trading time is a maximum of 15 minutes per week. One of the big mistakes in trading is to think you’ve always got to be doing something.

The Gap Trading strategy suffered some losses in the first half of June, leading to a roll-down of close to 4% on the accumulated profit. However before the end of the month, the losses were recovered and we’ve moved ahead by another 2.2% (additional 440 pips at minimum). Part of your profit would sometimes be given away: the key is to give away as little as possible so that recovery would be very much easier. Now, based on past experiences, it’s possible to forecast whether a gap would be filled or not after it occurs – with stunning accuracy. Gaps in the currency markets are usually followed by powerful price movements in the week they occur. Gap trading is a highly lucrative trading strategy – provided you know how to interpret the price actions correctly. A future article would be devoted to this advanced gap trading method.

Ralph Vince, author of 3 books on money management, allowed 50 PhDs who knew nothing about money management or statistics to play a game with 60% accuracy (which is certainly much better than any game you’ll ever play in Las Vegas) for 100 trials. They weren’t given any incentive for winning – which can cause stupid behavior. They were merely instructed to make as much money as possible playing the game. Guess how many of them made money? Only 2 of them! And these results aren’t unique. The markets can remain irrational longer than most traders can remain solvent. That’s why majority of traders would continue to suffer in the financial markets unless they embrace safe money management.

Why is it important that we understand money management? Because the main reason people think that trading is a dead-end activity is that they are unaware of – or choose to ignore – the purpose and power of this principle. Make money and risk management the focus of your trading activity. That’s what will make you a successful trader.

Would You Like to Trade Like Me? I look forward to helping you to learn and grow your skills as you trade this huge, but extremely volatile, Forex market. During these turbulent times, I will be at your service through the cutting-edge articles from me and giving you access to some trading accounts that enable you to see how I trade, apply the risk control measures I preach, manage open positions (so that you can do so accordingly), and to help you make good trading choices. A helpful gift is also coming the way of my paid subscribers on today. This gift could be yours too. And, if needed for special help in trading, I am available via e-mail. I look forward to your starting your subscription. You may join me at: http://www.fxinstructor.com/en/analytics/ituglobal

Lastly, the team at Fxinstructor.com has been making efforts to help traders out there realize their dreams of profitable market experience. Please let them take you by hand and lead you to trading mastery.

NB: Please watch out for my coming articles with these titles: ‘Resist the Lure of High Risk – Part 3,’ ‘Carrying Out Stealth Raids in Weak and Strong Markets,’ ‘Worst-case Scenarios – Facts Are Sacred,’ ‘Effective Swing Trading in Forex,’ ‘Advanced Gap Trading – Trading with Insane Accuracy,’ ‘3 Recent Gap Trades,’ ‘Trading for a Livelihood – One of the Best Jobs in the World,’ ‘If I Were a Trading Neophyte…,’ ‘Developing the Right Attitude towards Losses - Part 3,’ ‘The True Holy Grail – The Long Sought for,’ ‘Achieve Success through Sensible Risk-to-reward Ratio (An Interview with a Trading Enthusiast),’ ‘ Clarifying Some Issues – Part 5,’ ‘Optimization of the USDCAD Hedging Strategy – Bringing the USDCAD to Subjection,’ ‘A CHF Breakout Strategy,’ ‘Overview of My Signals Strategies,’ ‘Is It Realistic to Give Guarantees in Trading?’ ‘The Proper Way of Using the Bollinger Bands – Learn the Truth from the Horse’s Mouth,’ ‘Monthly Trading Report (July 2011),’ etc.

I end this article with a quote from Joe Ross:

“Traders don’t seem willing to admit that once they are filled, the situation becomes 100% managerial. Most traders concentrate on finding the perfect entry signal. But you can teach a chicken to place a trade in the market based on an entry signal. What you can't teach the chicken is how to manage the trade once the market provides a fill.”

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

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:

www.fxinstructor.com/blog/author/amustapha

www.fxinstructor.com/blog

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.

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