Friday, March 31, 2017

A Trading Question I Often Ponder

Can you be too stupid to trade and the answer is obviously yes. If you are defeated by how your toaster works then trading is not for you, nor is anything else probably. However, my observation over the decades has been that despite what the industry would have you believe trading is not that hard. The cognitive skills one needs are quite limited, in fact the smarter you are the harder trading seems to be as there is a constant desire to tinker or set off on a quest for the Holy Grail. LB often says that you need to be smart enough to write a trading plan and dumb enough to follow it religiously and this seems about right.

What does inevitably defeat people is their own psychology and inability to either adapt or let go of their most deeply held beliefs about trading and themselves. As an example I was in the background when LB had a conversation with a trader recently and this particular individual was so wedded to things they had heard on internet chat forums that they simply couldn’t let them go despite them being wrong.  A major point of contention was their belief that you had to get the majority of your trades right or you just couldn’t make money. This is clearly incorrect and can be shown to be show quite quickly. The table below looks at the percentage of winning trades needed to be profitable based upon the average R multiple of each trade.

As you might expect the larger your average R the larger the effective buffer you have to insulate you from being incorrect and since being incorrect is the default state for traders this is a handy thing to know. This is of course a simulation and the real world is a little bit dirtier than this so I went back and looked one of my short term systems for the past four years. Surprisingly, for a short term system it trades quite infrequently. The results presented below are from the S&P/ASX200 which is one of the instruments in the portfolio I trade with this approach.

If you were simply judging this system on the number of trades it got right then you would consider it to be a bit of a disappointment but each year it has been profitable. This profitability is based upon catching one or two big moves during the year and simply hanging on. This is what saved the system in 2015 when it made no money for the bulk of the year. This highlights the dichotomy that appears in trading – there are traders who trade for entertainment and part of this is having your ego massaged by thinking you are correct. And then there are those of us who trade simply for money. If I am to be charitable it is quite natural for people to think that you need to get the majority of trades correct in order to win since we are geared to accept reward as being commensurate with being right.

All of the above is predicated on two things – they are average returns over time and it is this notion of the deep time needed in trading that causes people difficulty. You have to allow the system time to build momentum and for you to get used to its ebbs and flows. As I seem to repeat endlessly trading is not a lottery you don’t suddenly wake up one day and make $20 million. You grind away over time.

Author: Chris Tate

Article reproduced with kind permission of

Below are some useful quotes from trading experts:

‘”Insisting on perfect safety is for people who don’t have the balls to live in the real world.’ (Mary Shafer -NASA Dryden Flight Research Center, Edwards, CA SR-71 Flying Qualities Lead Engineer)… I stumbled across this quote and thought it was the most perfect description of what is required for trading. If you don’t have the nerve to accept that trading is an imperfect, dirty and chaotic endeavor then it is not for you.” – Chris Tate

“There are plenty of traders who make their money when a market is not going anywhere. Option sellers who straddle and strangle love markets that are going nowhere at all...” – Andy Jordan

“Risk is the most relevant aspect of trading! Risk is the only thing you can control. You cannot control your profits.” – Topsteptrader

“Self-mastery makes trading mastery and wealth mastery easy.” – Van Tharp wants you to make money from the market. 

Traders’ Mindset:  Traders' Mindset

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Thursday, March 30, 2017

Annual Trading Forecast for HSBC (2017)

HSBC stock (LSE:HSBA) is currently pulling back. The market trended sluggishly upwards within the months of November 2016 to February 2017, but it is now being corrected.

Price has gone below the EMA 21; while the Williams’ % period 20 Range period 20 is in the overbought region. This mean that price is currently weak.

There is already a bearish signal on HSBC, and further bearish movement would lead to a stronger bearish outlook. On the other hand, a meaningful rally could threaten the bearish signal.

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Traders’ Mindset:  Traders' Mindset

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Annual Trading Forecast for Paysafe Group (2017)

Paysafe Group shares (LSE:PAYS) are currently strong. There is a strong bullish bias on the market, and this could continue for most part of this year,

In the last few months of 2016, price decline (especially in the month of December). Following that decline is a rally that has held out from then till now.

In the chart, the ADX period 14 is not that far from the level 30, meaning that there is still some momentum in the market. The DM+ is above the DM-, showing that buyers have upper hands. The MACD default parameters, have both its signal lines and histogram above the zero line.

There is a strong Bullish Confirmation Pattern in the Paysface group market and the outlook for this year is bullish. Price should continue to rally, reaching the distribution territories at 500.0, 550.0 and 600.0 before the end of this year.

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Traders’ Mindset: Traders' Mindset

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Tuesday, March 28, 2017

What is the fastest way to send money to Nigeria?

The fastest way to send money to Nigeria

Even Western Union or Money Gram would still subject people to some paperwork.

The answer is not difficult.

Use the fastest-paying exchanger. If you’re in Asia or Europe or Oceania or Latin America (or if you’ve someone there), they can be encouraged to remit funds for whatever purposes they want, like cash gifts to friends and family, projects, savings, business, possessions, etc.

They can send e-currencies like Perfect Money and Payeer and get paid in its Naira equivalent, directly into their bank account in Nigeria (or the bank accounts of their beneficiaries).

All this can be done in less than 20 minutes.  This is not about someone who’ll promise instant delivery and deliberately delay you till the following day or delay you for a few days.

In order to get the money into your bank account as fast as possible, you need to use an exchanger that can fund your local bank account as fast as you can imagine.

This is exactly what we do at

Perfect Money/Payeer here:

Traders’ Mindset:  Traders' Mindset

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How to get verified by PAYEER

Hello Traders:

In order to enjoy the full benefits of Payeer, you would need to get verified/personalized.

However, Payeer verification isn’t easy. They don’t accept voter’s cards and driver’s licenses as proofs of nationality. What they accept is a government-issued plastic ID card (like national ID card) or best, international passport. Forget about an NIMS slip, whether laminated or not.

It’s best to use international passport as a proof of nationality.

Your proof of address can be utility bills. The utility bill you use must be recent – issued within 3 months. You can also use your 3-month bank statement, which is very effective. The bank statement must be stamped and signed by your bank.

In our experience, it’s best to use a 3-month bank statement, showing your address and stamped and signed by your bank. The statement can be for your Naira account and your domiciliary account.

Finally, use a high resolution scanner or a very high resolution smartphone camera to scan the documents. All the edges and details must show clearly, with no edits, bends, roughness or fades.

If you can do this, you’d get verified quickly. Then you can start enjoying your Payeer account.

NB: Without verification, you can use Payeer. But verification would open you to additional features.

To see our current Payeer and Perfect Money rates, please visit:

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Fake Loans: Scammers using names of FCMB to dupe Nigerians

Sir or Madam:

If I ignore this, I don’t know how many innocent victims would be sent to their early graves.

Ignoring this message is like doing disservice to Nigeria as a country.

Someone has been sending an unsolicited messages to several millions of Nigerians, to dupe them into their hard-earned income. Obviously, the processing fees are what the victims would part with.

The rogues are using FCMB account names and numbers to dupe people.

The sender is:
His phone number: 08063074155 

This is the body of the message:

Dear Customer,

Cash to Go  - within 24 hours  Credit Direct Limited (CDL) is a subsidiary of FCMB Group PLC.

We are very appreciative of your interest in our “cash to go” loan and we request that you refer us to your network of colleagues and friends through this email.

We offer the best credit facility and interest rate across the consumer lending space in Lagos and Abuja. We have also been in operation since 2007 targeting high earning employed individuals.

Get as high as NGN2mm over a maximum tenure of 12 months at rates as low as 3.95% per month. We also assure you of confidentiality and premium service during the processing of your application.

Our requirements –
1.         1 passport photo submitted with application form.
2.         Employment/Confirmation letter.
3.         Employment ID card and any other means of Identity (Driver’s license, International Passport and .
4.         Most recent Bank statement for the last 3 months.
5.         Most recent pension statement for the last 3 months
6.         Repayment cheques or standing order.
We would be very pleased to meet with you to make a presentation at your convenience. However, find attached our loan calculator within which you can plug your salary and desired loan tenure to ascertain what credit amount you can get.

Yours faithfully,

Igoche Egwu
Mobile:            08063074155
Address:          80 Kudirat Abiola Road, Oregun, Ikeja, Lagos., Lagos

Credit Direct Limited (CDL) is a subsidiary of FCMB Group PLC.
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             Please protect the environment; only print this email if you really need to.


NB: The message has been forwarded to FCMB, EFCC, NPF and ICPC

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Monday, March 27, 2017

Daily analysis of major pairs for March 26, 2017

The EUR/USD moved slightly upwards last week, testing the resistance line at 1.0800 many times, without being able to close above it on Friday. Price may eventually go above the resistance line at 1.0800, but there may not be protracted bullish movement after that, because there are high chances of EUR pairs getting weak this week.

EUR/USD: The EUR/USD moved slightly upwards last week, testing the resistance line at 1.0800 many times, without being able to close above it on Friday. Price may eventually go above the resistance line at 1.0800, but there may not be protracted bullish movement after that, because there are high chances of EUR pairs getting weak this week.

USD/CHF: The USD/CHF moved downwards last week, testing the support level at 0.9900 many times, without being able to close below it on Friday. Price may eventually go below the resistance level at 0.9900 but there may not be protracted bearish movement after that (especially when the EUR/USD loses stamina). Price is already below the great psychological level at 1.0000, and may face some challenge in going above it, although expected weakness in CHF may help stabilize the market.

GBP/USD: Last week, this currency trading instrument went upwards, reaching the distribution territory at 1.2500. There is a lot of activity around that distribution territory, which would soon be breached to the upside, as price goes towards another distribution territories at 1.2550 and 1.2600. The outlook on GBP pairs is bullish this week, and the GBP/USD is no exception.

USD/JPY:  Last week, price dropped by 150 pips. The USD/JPY has been trending downwards since March 10, 2017, having gone down more than 430 pips since then, and now it is active around the demand level at 111.00. Another demand zone at 110.50 and 110.00 could be tested within the next few trading days before there is reversal in the market.

EUR/JPY: There is a clear Bearish Confirmation Pattern on this cross, which moved downwards last week, testing the demand zone at 119.50. Once the demand zone is breached to the downside, price would move towards another demand zones at 119.00 and 118.50. However, the southwards movement may be far from holding out because there could be a rally on other JPY pairs before the end of March. The EUR/JPY would also be no exception.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group

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Saturday, March 25, 2017

Weekly Trading Forecasts for Major Pairs (March 27 – 31, 2017)

Here’s the market outlook for the week:

Dominant bias: Bullish
EURUSD managed to hold out its bullishness last week, in spite of the current short-tern consolidation in the market. Price reached the resistance line at 1.0800 and moved sideways till Friday. Many unsuccessful attempts were made to overcome the resistance line at 1.0800, but price could not stay above it. This week, that resistance line could possibly be overcome as another resistance line at 1.0800 is possibly targeted. However, there is also a strong possibility of weakness in the market; unless USD continues to be weak versus EUR.

Dominant bias: Bearish
Price dropped 70 pips last week, testing the support level at 0.9900. Attempts to breach that support level have not been successful, but that could happen this week, as selling pressure continues in the market. Since price has already gone below the psychological level at 1.0000, it would not be easy for it to go above that level again. There are potential targets at the support levels of 0.9850 and 0.9800 this week, which could be reached as long as USDCHF continues its weakness.

Dominant bias: Bullish  
GBPUSD went upwards last week, reaching the distribution territory at 1.2500; and then consolidating till the end of the week. There is a strong Bullish Confirmation Pattern in the market, and the outlook on GBP pairs continues to be bullish, and further bullish movement is expected on GBPUSD this week. The pair would go upwards by a minimum of 150 pips, testing the distribution territories at 1.2550, 1.2600 and 1.2650.
Dominant bias: Bearish
This pair dropped 160 pips last week. Since March 10, price has dropped 430 pips, leading to a strong bearish bias on the market, which would continue as long as USDJPY is weak. The demand level at 111.00 was tested several times last week, but price managed to close above it. This week, further southwards movement would happen, once the demand level at 111.00 is breached to the downside. However, there is an indication of probable rallies on JPY pairs before the end of the month, which would also affect USDJPY.

Dominant bias: Bearish   
Last week, there was some downwards movement on this cross, which dropped 180 pips to test the demand zone at 119.50. Since March 13, price has dropped 310 pips. There is currently a “sell” signal in the market, which may enable the demand zones at 119.00 and 118.50 to be reached. On the other hand, there could be a rally in the market before the end of the month. This is also expected on other JPY pairs.  

This forecast is concluded with the quote below:

“It is critical to develop a well thought out and organized trading plan. It is then important to have the discipline needed to follow it… Trading should bring fulfillment of your business and personal goals.” – Andy Jordan


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Thursday, March 23, 2017

This is a face of another scam artist (419 person)

VN ALERT: Dear Customer, Your ACCOUNT/ATM Card has been Blocked, Due to Incomplete BVN Registration. Call our Customer Help line on 08165194095.

The message above is what was received from scammers (exactly as it was received), and it has been sent to millions of Nigerians.  I wonder why these scoundrels obtain people’s phone numbers to dupe them.

I had to make this public because skunks should not be hidden; plus people should be alerted. Unfortunately, some innocent victims would fall for this stupidity.

You can share it if you want to save some victims.

The number that sent the message is: 09069955434

The number they want their victims to call is: 08165194095.

The matter has been reported to EFCC, MTN, Nigerian police and ICPC.

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Tuesday, March 21, 2017

Where Is The Money?

 One of the frustrating things about being a trend follower is that it takes time to overcome the inertia of a new system, particularly if that system is based upon slightly longer time periods such as weekly data. Part of the frustration that traders encounter is based upon the simple mechanics of how systems work. A system that is correctly designed takes its losses quickly and allows its profitable trades to simply roll along.

This results in the system instantly going into drawdown and it is this drawdown that causes traders to develop friction with their system. This friction often leads to tinkering as they attempt to force the system to give them something it cannot give. This is exacerbated in times of a flat market – you cannot force returns from a market. The All Ords of late has not really been a stand out performer as can be seen from the chart below the market has been slowly grinding its way up in a broad channel.

With this in mind I thought I would look at the yearly returns for the various stocks within the All Ords – so I found some data on their percentage returns and stuck it into a frequency histogram to see what the performance of individual stocks looked like.

I have a arranged the data into a serious of blocks and did a count of the number that fell into that category. I also calculated the average performance of the group which for this period stood at 17.09%. However, if I drop out the 200% and above outliers this average value falls to 13.04%. As you might have guessed the majority of values cluster around the mean with a long right handed tail. This sort of distribution is common with stocks since we have unlimited upside but limited downside – a stock cannot decline more than 100%.

Our psychology dictates that we are instantly drawn to the right hand side of the chart and the extreme outliers that occurred over the past year. And as traders these are the sort of trades that we hope ours might evolve into. However, in doing so we ignore that left hand side of the chart. The majority of stocks (60%) have below average performance.

You may assume as a trend follower that this is not an issue since you would avoid these large losses and poor performance by the use of stops but that ignores the reality of the actual trading process. As a mechanical trader you will not incur these losses but you will burn time wading through these non performing stocks before you hit the ones that do perform. You waste time, a little bit of money and a lot of patience dealing with this mediocre performance.

My anecdotal experience has been that trading returns are made up of a lot of modest returns and a tiny handful of trades that do very well but to get to the ones that do very well you have to crank through a reasonable number of trades and you have to keep going.

This is where the notion of emotional resilience comes into its own in trading and the ability not to tinker with the system hoping that it will generate these sorts of trades. Systems don’t actually generate these sorts of trades – the market does so you cannot actually build a system with the preconceived notion that it will find you trades that generate a 500% return. What the system does do is generate a population of trades, most of which will be duds and hopefully a few large winners. But in the beginning all trades look the same.

Author: Chris Tate

Article reproduced with kind permission of

More helpful quotes from professional traders are added below:

“As always the battle is not with the market but with yourself.” – Chris Tate

“Get any group of traders together and you will notice that the novices tend to talk about indicators and charting patterns, whilst the professionals discuss trading psychology and money management. In the beginning, you’ll underestimate the importance of these two key areas.” – Louise Bedford

“Most people have an “interest” in becoming consistently profitable traders. However, few possess the essential ingredient of “total commitment.” Total commitment is what is demanded for a high level of success from any endeavor. A trader with commitment will take the money away from 100 traders who have only an "interest.” – Joe Ross

“In fact I would say trading without a stop is like walking a tight rope without a net. You should always place a stop, not because you expect the market to go against you, but to protect against the unexpected. The worst losses I've seen have resulted from a trader not having a stop order in place and the ensuing deer-in-the-headlights paralysis that sets in once losses start to mount.” – Andy Jordan wants you to become a successful trader 

Traders’ Mindset: Super Strategies 
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