Royal Bank of Scotland Group: Buyers Gain Upper Hands

This company stock (LSE:RBS) is currently at a turning point (a rally to be precise) as would be shown in the technical explanation below. However, the overall trend in this year has been largely southward. The stock had been falling before the rally that happened in late July 2012 began. Seeing this, institutional traders could have hedged their long positions with short orders as well. Hedging is not a popular trading method among private traders, it is something used exclusively by Smart Money, though some strategies employed by retail traders use buying and selling similar instruments. The price is satisfactorily liquid (Liquidity explained as being able to open orders and smooth them whenever you prefer).

Technical Forecast

Looking at the chart, from a high of up to 393.3, the price began to come down in March 2012. That was the beginning of this year’s bear market on this stock. The bearish dive did not occur continually without some occasional bullish retracements in the price on the way down. One retracement happened on April 27 and another noteworthy one took place from June 6 to June 18, 2012. This is a price action that has been favorable to swing traders who were bullish on a near-term basis. Technically, the EMA period 21 period has shown a vivid confirmation of the primary trend on the company’s stock: Bearish. Something interesting is, however, happening on the Stochastic Oscillator period 14. The Stochastic reached the extremely overbought level of 0 more than a few times during the recent southward journey of the stock. Then on July 25, 2012, the price rose from a low of 195, resulting in serious bombardments of the bears. The price crossed the EMA to the upside last week; thus confirming this correction.

We need to note that at this time, the Stochastic has reached the extremely overbought level at 100 and is heading down. This is something that is normal and expected to be temporary. It shows the reason why July 31 was a bearish day. The price was at 213.7 when this article was being written. Buyers could experience some challenges at the supply territories at 214.00 and 214.50, but the support levels at 213.00 and 212.50 should do a good job holding the price. The price should rally after an over-extended bear market. This is something that has already been factored in; and this is unlike futuristic neo-Orwellian ideology. Prices trend upwards when bulls go long and plummet when bears short the markets. The ambitions of a myriad of bulls and bears cannot be fathomed, whereas it is safe to say that they aim to realize some returns while putting some check on risk. Therefore, millions of orders that are being opened would have profound impacts on the markets, whether upwards or downwards, as the masses take actions based on emotions.

Conclusion: For this stock, it is okay to elect one winning trading formula. Considering the price movement on the chart, whether as a line chart or a candlestick chart, we do well by determining the overall bias of the market instead of coming up with some ideas that contradict realities. This prevents your trading approach from being complicated and running the risk of getting out of touch with realities. Nevertheless, you would also be prevented from using too many strategies on one portfolio, thinking that one strategy is ineffectual because of a transient losing streak.

This article is ended with a quote from one of the well-known trading psychologists:

“Do you have a trading plan and are you following through on it?  Do you have trading rules?  Are you practicing appropriate money management and position sizing?  When you have losses or experience other disappointments, are you able to accept the reality and move on, or do you wallow in self-pity, sadness, and anger?  Are you following the market? Or, do you wish, hope, pray, and otherwise try to make the market go where you want it to go?  Are you journaling?  Are you logging your trades?” – Dr. Woody Johnson

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: http://uk.advfn.com/p.php?pid=register

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

Trading Forecast on Barclays PLC

Barclays PLC (LSE: BARC), provides universal banking solutions in retail and business banking, corporate & investment banking and wealth management. The company is a British multinational financial institution, whose headquarters are in the UK. It operates in over 50 lands and regions around the world. In 2010, it had up to 2.33 trillion USD in terms of assets. It is the 4^th largest bank in the world. The company stock has been bearish in 2012 and has continued to be so. Many fundamental reasons are responsible for this, some of which are directly and indirectly related to Barclays itself. Verba volant, scripta manent (words fly away, writings remain), as scholars agree. The primary trend is down, and mean reversion techniques could be harmful.

Technical Forecast: Buyers Be Careful

Barclays’ shares were bullish at the beginning of 2012, until early March when the price almost hit the distribution zone at 260. Since then the stock has been bearish till now; the only exception being a counter-trend correction that occurred between June 6 - 21, 2012. This period would have afforded bullish swing traders some decent gains. Since June 21, the stock has been winding its way downwards. Recently, the price gapped up, proffering bears an advantage to possibly sell dearer.  Technically, what we have on this market is a bearish Confirmation Pattern. Looking at the company price chart, we see that the ADX period 14 indicates some strength in the current market movement, while the -DI (Directional Index) is still favorably given an advantage over its +DI counterpart. The MACD signal line is still below the zero line, though the histogram is against the alignment. The pair was trading at 165.65 when this article was being written and it may go upwards temporarily towards the resistance levels at 166.00 and 166.50: whereas if further signs of weakness is shown, the price may be forced to go down to the demand zones at 165.00 and 164.50.

Yes, buyers should be very careful on this stock, because the stock shows a downtrend. Honestly, bulls do not fare well in a predominantly falling market.  Investors who hold out too long enough against the major trend is going against the flow of the market. In fact, near-term northward rallies should give sellers opportunities to short the market at better prices (selling rallies in the context of a downtrend).

Conclusion: For me, there are no difficulties in predicting tomorrow’s prices. Barclays shares will not plummet forever (there is no such thing as an everlasting trend). As I know, after this long-term drop, the resilient Barclays shares will rise, going up - either tardily or quickly. When that time comes, the stock will shrug off any negative news that could pull it down. You might feel this is odd, but based on my experience, the Barclays price chart is showing vivid accumulation zones. Market fundamentals are not often judiciously expatiated on. Last week, a company’s stock was rising and this week it is nose-diving, albeit logical reasons behind this do not exist. The forgoing shows why I strongly advocate keeping things uncomplicated when approaching the markets. Looking at the chart and seeing what is happening could be all you need to do make objective judgments. Do not forget that traders can make money, whichever the way the market goes.

This article is ended with a quote from one of successful female shares traders in the world:

“If it's your dream to be a trader, realize that you'll be up against some resistance. Sometimes from those who love you, sometimes from yourself. No great trader ever rose to the top of their equity curve without it. Expect it, and even welcome it as you recognized that you're doing what it takes to get ahead… You can either stay exactly where you're at right now, or you can force yourself out of your comfort zone.” - Louise Bedford 

NB: You would be exposed to world-class, cutting-edge, and top-notch trading experiences here: http://uk.advfn.com/p.php?pid=register

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

Trading – A Fantastic Way of Life

 “Until you move out of your comfort zone with anything in life including trading and investing, you will never achieve different results. Start to think a little differently about things and a whole new world of opportunity will open up to you like it did for Gretzky and Jordan.” - Sam Seiden

It’s known that knowledge can save life. Likewise, good trading knowledge can save your portfolio and career and make you a permanently successful trader. There are many trading educators, market analysts, signals strategists out there that can help you be the best trader you can be.  Fundamental figures release and market reactions are now contemporaneous events.

Past events in the financial industry remind us that what we don’t anticipate can sometimes happen. By saying that the markets are efficient, we mean that gains can be made by some, but the advantage used to make the gains can be rendered ineffectual by our competitors – except the game is unfair. True, some presently successful traders made deadly mistakes in the past. But out of their love for trading, they admitted their mistakes, and tried to do what’s right. Their experience in the markets is now agreeable and satisfactory. They make small gains and also sustain small negativity. 

It’s no longer something new that negativity would be sustained by any trader. The most important thing is to control the negativity and never allow pride to interfere with rationality when making trading decisions. Even when a losing streak comes around, there’s one course of action. That is, to hold out till the end of the streak. It does not pay to constantly call to mind unfortunate things that happened to our trading career. When bad things happen to us on the markets, we tend to think it could be better if we took the exact opposite positions. On the present fast moving instruments, we could be worse off. But we are not!

Indeed, trading is a fantastic way of life, and being a trader is a wonderful privilege. The risk inherent in trading hasn’t deterred a myriad of people from attempting to benefit from the financial freedom the currency markets have to offer. Trading apart, many people have taken risks in other spheres of human activity in order to achieve success and acclaim. Author Dennis Fisher mentioned Nal Needlam briefly in one of his articles. In Needlam’s book Stuntman! My Car Crashing, Plane-Jumping, Bone-Breaking, Death-Defying Hollywood Life, he reflects on taking risks. Needlam has slugged it out in his fist fights, raced cars at high speed, walked on wings of airborne planes, fallen off horses, and has even been set of fire!. He risked his life to entertain film audiences, and to distinguish himself as a top Hollywood stuntman.

“When my ophthalmologist says, ‘Be still.’ I am still. I don’t argue. I don’t become defiant. I don’t stay busy behind his back. Why? Because he is a renowned eye surgeon who is trying to preserve my sight, and he needs my cooperation,” says Julie Ackerman. “I would be foolish to ignore his instructions…” Taking this ideal instance into consideration, we would not want to ignore winning trading tips from market wizards that have been surviving the markets for ages. How we benefit from following the advice of successful trading mentors!

There are professional female traders as well (it’s well known that women have unique qualities that can be used to their advantage as traders). The quotes that end this article are from highly respected and successful female traders. You can be like them too. We have lots to learn from market veterans. In my futures articles – available on FXempire.com – objective market analyses, secrets of successful traders, positive trading mindset, effective trading ideas accompanied by their risk management parameters, and other trading related articles would be revealed.

I conclude this article with the 2 quotes below:

“Taking a loss is merely playing for better position. One trades strictly for probable future results, not for what the market might do… You grow with each decision, yet each decision has a price.  For example, you must discard a choice, and you must commit… Remember that conditions are never perfect. You must allow yourself to fail. Allow for human limitations and wrong choices. Reserve compassion for yourself and your limitations.” - Linda Raschke

“We have to stand up for our beliefs because it's only by our thoughts that we set ourselves apart from the masses who are not achieving trading greatness… The time to learn new instruments is before the one you are trading has stopped co-operating. Develop your skills before you need to use them. Learning while calm is very different than learning while feeling forced or desperate. Don't wait until a crisis in your life to learn how to trade. The time to act is now.” - Louise Bedford

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

For more articles at FXempire.com, go to:http://www.fxempire.com/author/mustaphaazeez/

Open an account here: eng.fxclearing.ca/ib/915

Copyright (C): Fx Empire, LLC

If you want to receive permanently free winning Forex trading signals, please send me an email titled: “A Request for Free Trading Signals.”

Yahoo! Messenger ID: saazalmu

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

Timeless Traits of Victorious Market Wizards - Part 1

 

 

"Trade and prosper - it is an attainable American dream." - Mark. D. Cook

As a trading expert, I’ve noticed different ways in which people view trading. Some people love trading, some people hate it. Some think financial websites are great; some feel those websites don’t help ultimately. Some like to overtrade, some open very few positions. Most souls are too busy to speculate on a full-time basis, something that doesn’t really matter… Yes, it’s not possible for everybody to become a trade. There are conflicting opinions and there are many ways to make money, so to speak. But I’d like to point out that most of the wealthiest people in the world gain their immense riches from the stock market and the real estate investment.  Victorious market wizards have been trading the markets for decades, and in those periods their love for trading hasn’t been reduced. Rather, they have earned a wealth of knowledge and returns from actively participating in the markets and sometimes helping neophytes be the best traders they can be. It’s highly intriguing to see people sharing testimonies about their success in the markets and making decent income from their trading activities. If you can read the articles in this series and follow the secrets contained therein, you’d potentially see yourself being ultimately transformed into a competent trader.

Charles Kirk, quoted at the end of this article, said recently in an interview that when he looked back, he was very fortunate in terms of timing in his trading career as he started trading full time when the market was performing at its very best. What he lacked in knowledge and skills, a benevolent bull market made up for. They say bull markets make everyone look like a genius and that was certainly true in his case. Like many traders just starting out, he traded very aggressively and those aggressive trades paid off. Unfortunately, at the beginning, he’d zero respect or any real appreciation for proper risk management because trading was so very easy for him early on. As things go, the good and easy times where everything he touched turned to gold didn’t last. He started experiencing discouraging losses.

Rather than quitting, Charles Kirk began to learn what it takes to be a successful trader - a process that took him a considerable amount of time. He eventually achieved him aim, and now, he makes a living from trading.

Some who were thought to be trading experts are no longer in the markets. They made money when trading was favorable to them, but lost heavily when things went awry. They stopped trading because long-term success eluded them. We can never be inspired by former traders who have quit trading, but we can be goaded towards successful by market wizards who have been enjoying success - beating the markets on annual basis. Their traits can be learned and imitated by you as well. Those traits are revealed systematically in the articles in this series.

 

Traits of Successful Market Wizards

1. Victorious market wizards have found what work for them in trading: Every successful trader has found trading ideas that work consistently. Without trading principles that work, any trader would soon experience significant failure, for it’ll be that they don’t know what they’re doing in the markets. Those speculating without killer trading plans might enjoy transient success, but you would need killer trading plans in order to be a permanently victorious trader. You would save your nerves by simplifying your trading. Some of the trading ideas that work would be revealed in my future articles on this website.

2. Victorious market wizards take money management serious: For you as an individual trader, it is imperative for you to ensure that you’re not betting too big on an individual trade. Those who bet too big may win jackpots, but they tend to loose too big when things turn against them. There is a clear disparity between trading and gambling. Personally, I wouldn’t risk more than 1% of my portfolio per trade. Victorious traders do that for their permanent victory, and you should be able to do that too.

3. Victorious market wizards sell short in downtrends and go long in uptrend: The best trading method remains going with the flow of the markets, not the other way round. As Dr. Van K. Tharp puts it, the trader's struggle with the market is the problem. Market wizards trade only clear market propensities (not going against the propensities), and they stay out of equilibrium/trendless markets. If the markets are going south, they go south. If the markets are going north, they change to a northward bias. Really, you won’t be able to handle your open positions skillfully, if you’re experiencing problem handling your reactions to the markets .If you find it difficult to trade the markets with a measure of success, I would like to give you a simple advice. Switch to bigger timeframes. Short a predominantly falling market and purchase some contracts in a predominantly rising market.

4. Victorious market wizards wait for confirmation of a change in the trend, before they change their bias: They don’t rush to take the opposite side of the trend because some fundamental facts suggest that or because of corrections in the price. They wait for the market to turn before they change their positions. Market wizard acknowledge that the market can’t be prognosticated with 100% certainty. Nevertheless, the position they take when fundamentals change is often based on tactical speculative method coupled with effectual chart reading techniques. This is one timeless trading principle, and I’d still write an article to elaborate more on the importance of trend-following and the danger of going against the trend. Desist from pinpointing turning points in the markets when you think prices are too dear or too cheap (using money management based on your safety rules), till the market has shown that the bias is completely over.

Conclusion:  The most important point is that are many market speculators that possess unhelpful biases prior to opening orders and prior to sustaining any negativity. Realistically, majority of market players have good trading knowledge, but often freeze when it comes to executing trading decisions when needed. This procrastination makes them exasperated as the time runs out on them. Vividly, this is a great challenge when they need to be courageous in their trading ideas and in the execution of those trades. As someone who needs to trade effectively, you would need to stick to trading principles that work, or else you would be frustrated. The Part 2 of this series would be made available next week

This article is ended with the quotes below:

“It wasn’t until my father passed away one month after my law school graduation that I knew that trading for a career was the right decision. The very last conversation I had with my father in his hospital room is one I’ll never forget. In his last moments, he desperately urged me to ‘do what I love’ as a career. He told me that he’d enjoyed a very happy life because he really loved his work and how much of a difference that made for him. He worried that I was making choices that would prevent me from following my passion and urged me to follow my dreams. Shortly after, I asked my wife to give me 2 years to prove that I could make a living by trading instead of being a lawyer as I’d planed.”  – Charles Kirk

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis

Trading Forecast on Tethys Petroleum

 Tethys Petroleum Limited is an AIM-listed company which is involved in the exploration and production of oil and gas in Kazakhstan, Tajikistan and Uzbekistan. When this company stock was analyzed, it was discovered that it is in a bearish mode. This is a falling market. While some traders would not prefer to open trades when the markets are in obdurate equilibrium phases, the probability of the price going further south is high.

Technical Forecast: Sell and Sell Short

The Tethys Petroleum shares (LSE:TPL) have been trading lower and lower, confirming the bears’ hegemony. Looking at the chart, you would see that the price has been coming down since early March 2012. The price tanked until the middle of June. On June 20, a short-term bullish rally started and held out till July 5, 2012. A horrible spike occurred on July 19, catapulting the price upwards by far more than a thousand points (reaching a high of 60.00 which was a formidable supply territory), and the price retraced heavily by over a thousand points the same day. Since then the price has been in a renewed bearish mode.

 You can see the trendlines drawn on the company’s price chart. It shows a downward bias.  The lower trendline has been tested several times, and if the pressure continues further, it may give way. The Relative Strength Index (RSI) period 14 has gone below the level 50 - further confirming the bearish pressure, though frigid sentiments may at times whip up choppy movements in the market. It looks as though the RSI still has a lot of way to go before reaching the oversold region at the level 30. While writing this forecast, the price was trading at 40.50. There are ceiling levels at 50.00, 50.50. Those levels would resist the interest of the bulls. There are floor levels at 30.50 and 30.00, as the bears might continues trudging towards these levels - though sustaining blows from the bulls as they move adamantly towards the levels. Prices may not be cheap when we think they are.

Conclusion:  What does it suggest? Clearly the sellers have overpowered the buyers. It is hightime the bulls took a break, because generally speaking, the stock has been bearish this year. So bears,  sell and sell short!  The buyers must have been desperate because the price has been trending lower and investors are most likely desperate from probable good news that could halt the weakness of this stock.

This article is ended with a quote from a trading maverick:

“A trader stays in touch with the bigger picture. In the end successful trading

is all about expectancy, risk management and position sizing.” - Dirk Vandycke

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

Copyright (C) ADVFN PLC

For more articles, go to: http://www.advfn.com/newspaper/technical-analysis