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“Yes I do (I believe that successful trading can be learned). But it’s obviously not easy. Once you’ve worked your way to a professional level, it’s also important not to want to optimize everything excessively. The KISS rule (Keep it Simple, Stupid) has proven to be a reliable guideline for professionals… It’s important that things don’t get too complicated here. So keep your strategy as simple as possible and avoid overly complex interpretations since this can exert unnecessary pressure on you while trading in real time.” – Thomas Kahdemann

Hello:

I used to believe that institutional traders were more skillful than private traders. Then, I wondered how long it’d take me to be like them, but later it dawned on me that they also can’t predict the future with absolute certainty. The fact that a trader has access to huge funds to manage doesn’t automatically make her/him a better trader than a trader who has less money. Furthermore, some people believe that trading in summer months is difficult because some traders tend to take vacation, yet I know those who currently make profits regardless of this belief; for there are always trending pairs/crosses somewhere. The fact that most top traders find the market difficult right now doesn’t mean that some private traders aren’t making money. I’ll continue saying that traders need to keep their strategies simple, because I’ve seen how a single indicator which is combined with price actions makes more pips than a complicated strategy using expensive charting software. There is no trading guru somewhere: the only way to become a guru is mentioned at the conclusion of this weekly update. And you’d do well to see the quote that follows at the end of the article.

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

AUDUSD
Primary Trend: Bullish
Last week, I said it was good to go long on this pair. I had a long trade here. Why? It was because the price action confirmed it: there was no other reason. However, it may be too late to go long right now.
Order: Buy
Entry date: July 22, 2011
Entry price: 1.0830
Stop loss: 1.0730
Trailing stop: 1.0959
Take profit: 1.1124
Exit date: July 29, 2011
Exit price: 1.0986
Status: Closed
Profit/loss: 156 pips

NZDUSD
Primary trend: Bullish
This pair has continued its journey northwards since last week. The kiwi remains a strong currency, but its days of strength are numbered. It’s possible for the price to retrace at this point. It’s always good to look left to make the right decisions.

EURCAD
Primary trend: Bearish
The pair is trying to edge its way upwards now, though the overall trend remains bearish. The price would need to break the price level at 1.3700 for this assumption to be true. I’m still anticipating more weakness in the Loonie.

EURAUD
Primary trend: Bearish
The strength in the AUD has been asserted again this week. There has been a sharp sell-off on this instrument. It’s better for speculators to find price levels by which this bearish move could be taken advantage of, rather than asking about the whys and wherefores of the market move.

EURNZD
Primary trend: Bearish
Slowly but steadily, and contrary to what I expected, the bearish move has continued. The price is still quoted below the SMA50 and SMA 200. The ADX 20 level is pointing towards the level 30, indicating a possible renewal of strong bearish pressures. The -DI has just crossed the +DI to the upside. I’ve no new position here.
Order: Sell
Entry date: July 15, 2011
Entry price: 1.6789
Stop loss: 1.6889
Trailing stop: 1.6639
Take profit: 1.6521
Exit date: July 19, 2011
Exit price: 1.6949
Status: Closed
Profit/loss: 268 pips

AUDJPY
Primary trend: Bearish
This market looks difficult: the long-term trend is still bearish, but the bearish outlook has been seriously violated. My last order was exited at breakeven. It’s better to stay away from this market now, as the AUDJPY is currently misbehaving.
Order: Sell
Entry date: July 12, 2011
Entry price: 85.42
Stop loss: 85.42
Trailing stop: N/A
Take profit: 82.46
Exit date: July 26, 2011
Exit price: 85.42
Status: Closed
Profit/loss: 0 pips (breakeven)

Conclusion: I’ve always revealed the folly of trying to predict the markets or using complicated strategies. We should focus on trading with very, very small position sizes; cutting losses as many as they are and running profit as many as they are. There’s no other way to be victorious.

The article is ended with a quote – which is an eye-opener – from Thomas Kahdemann.:

“When I was at the beginning of my career, working in a bank’s branch office, I always thought that people at the Frankfurt headquarters were better than everybody else and knew ‘how the … market really works.’ When I later worked at the headquarters, I quickly realized that this was not the case. There was the same uncertainty there as in branch office. Then I thought that at least the traders in the trading departments, for example, in Zurich, should know. When I worked there in proprietary trading, there was no trace of omniscience either. ‘But the top traders in the US are bound to know how it works,’ I thought. Yet again, I was disappointed when I worked in Chicago and was looking for the Holy Grail. No-one knows with absolute certainty how to achieve continuous gains. As a trader, you’ve to accept that and learn to cope with the inevitable uncertainty.”

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Email: amustapha@fxinstructor.com

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.

 

About Me
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“While many traders equate being right to making money, I believe that you are right if you follow your rules, regardless of your results. If you don’t have any rules, I would consider everything you do to be a mistake. I define a mistake as not following your rules.” – Dr. Van K. Tharp

Hello:

You’re definitely happy whenever you make a profit, but what about a loss? Do you have the right attitude towards losses? Do you overreact when you incur a loss? Do you consider yourself a failure because of losses (something transitory)?

You needn’t feel too bad as a result of losses, and there’s no need for you to feel inferior to any trading expert. You might think that trading is also easy for them (whereas it’s not). You might wonder what’s wrong with you whenever there’s a loss. If you don’t address this issue properly, you can become your own worst enemy. Sooner or later every trader has some losses, but those who can deal with losses are resilient. Past losses shouldn’t preclude you from seeing the new opportunities the markets can offer you. Whenever your entry criteria are met, bear it in mind that you have reasons to place the trade, despite the risk of loss.

Profits and losses, which are a good example of polarity, are an experience every trader in the world must accept up front. You need to come to terms with your trading failure – real or perceived or potential? Does a temporary run of losses or another trader’s success really mean that you’ve failed? Certainly not. When top traders or marketers talk about their profits (and some of them hide their losses), you mustn’t feel that you’re a failure by comparison; neither should you think that the trade you want to take right now would be a failure. This unhelpful thinking attitude can hold you back from making an attempt, out of the fear that your chances of success are slim.

If you think all your trades must win, or if you never try new trades for fear of failing – then you’re involved in self sabotage. You can learn from your losses and be motivated to improve, or you can focus on what went wrong and stay within you comfort zone. It depends on what kind of trader you choose to be.

It’s not bad to evaluate the performances of a successful trader, providing it’s done in an objective manner. Instead of ‘stirring’ up competition – even if it’s just in your mind – acknowledge the accomplishments of others. At the same time, without becoming boastful, recognize your own unique abilities which can help your trading results if applied.

If I feel I’m likely to fail at a trade, I’d reduce my risk and make light of the situation. It’s better to gain small and lose small, than to gain big and lose big. If you’re always after big profits, you’ll never enjoy a long-term survival on the markets.

So instead of letting fear of losses immobilize you, put your heart into the task. Why not think of an occasion on which you had more profitable trades than you expected. What lesson did you learn form those profitable trades? How can that lesson help you conquer any fear of loss you may be experiencing now?

Which personal failing do you find most discouraging? For example, if you’ve given in to some trading weakness, does that mean you’re a hopeless trader? Or is it merely an indication that you need assistance? Instead of focusing on your losses, reflect on your profits as well.

No-one is perfect. Everyone fails at something, sometimes. If you give yourself a sensible risk-to-reward ratio, you’ll eventually gain more than you lose.

NB: Please watch out for my coming articles with these titles: ‘Worst-case Scenarios’, ‘Effective Swing Trading in Forex’, ‘Advanced Gap Trading’, ‘Resist the Lure of High Risk (Part 2).’ ‘3 Recent Gap Trades,’ ‘Trading for a Livelihood,’ ‘Force Index Indicator – A Tool Winners Use,’ ‘A New Way of Using the Williams’ Percentage Range,’ ‘If I Were a Trading Neophyte…,’ etc.

I’d like to conclude this article with more quotes from Dr. Van:

1. “Most people spend years training for their profession. Then, after they accumulate a little money, they just open an account and expect miracles. Trading success doesn’t happen like that; it only happens when you get training that would be equivalent to preparations for any profession… It’s more difficult to be a successful trader without a strong commitment and complementary personality traits.”

2. “If trading were easy, big money would make it almost impossible for people to enter the markets. But trading well is very difficult, so the entry requirements are easy.”

3. “A strategic trader is focused on the big picture rather than lots of facts and details; he is also more logical than emotional; and he is organized but not compulsive.”

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach

Email: amustapha@fxinstructor.com

Yahoo! Messenger ID: saazalmu

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.

About Me
My Articles

?I can tell you that my accountant was telling me last year that I have lots of losing trades, but that he is very happy that I keep those losses extremely small? The most important thing for success is learning to cut your losses quickly and to keep those losses very small.? ? Dan Zanger

Hello:

Mr. Dan, quoted above, is a highly celebrated market wizard. He?s one of the greatest traders of his generation. The trading methodology he?s been using has been working for him for many years; something that has changed very little over time. Although his positing sizing is conspicuously higher than I can recommend, I seriously respect his trading approach. As I said in my article 2 weeks ago, Mr. Dan turned about $11,000 to $42 million within 24 months (making roughly 29,000% during the period). He has resplendent houses and a luxurious yacht which he uses to cruise around. In a single day, he can easily earn what most PhDs can?t earn in 10 years.

Both professional and novice traders face losses. The only difference is that professionals know how to deal with the losses and eventually move ahead, whereas novices don?t know how to do that or they?re not willing to do that. I’ve?mentioned constantly in my articles that top traders are not the best market predictors. They abort losers when they?re wrong and capitalize on winners ? a Golden Rule of trading. Novice traders, on the other hand, cut their winners and run their losers ? something that backfires in the long run. There are 2 lessons to learn from Mr. Dan at the end of this article: persistence and cutting of losses.

Now let me review my recent trading activities briefly.

AUDUSD

Primary Trend: Bullish

The market is generally difficult at the present. The primary trend remains bullish, but the bulls are getting weaker and weaker. If the prices of gold and oil correct much lower, the USD would gain strength and the AUD would weaken. AUDUSD would eventually weaken. This is more than conjectural.

Order: Buy Limit

Entry date: February 17, 2011

Entry price: 1.0015.

Initial stop: 0.9915

Current stop: 1.0086

Exit date: March 2, 2011

Exit price: 1.0115

Status: Closed

Profit/loss: 71 pips

Percentage growth: 0.7%

NZDUSD

Primary trend: Bearish

There?s no way for the NZD to gain meaningful strength at the moment. It?s falling against many currencies and vice versa. Even the anticipated strength in the USD would simply make the bearish move stronger.? In the light of this development, any upward rally would only be temporary.

EURCAD

Primary trend: Bullish

My last long trade on this cross broke even, emphasizing the fact that the bulls? power on the market is still limited. The CAD isn?t a weak currency, and the EUR is not strong enough to withstand it. The much anticipated weakness in the EUR would cause strong downward journey and the primary trend could turn bearish.

Order: Buy

Entry date: March 3, 2011

Entry price: 1.3471

Initial stop: 1.3371

Current stop: 1.3471

Exit date: March 9, 2011

Exit price: 1.3471

Status: Closed

Profit/loss: 0 pips (breakeven)

Percentage growth: 0%

EURAUD

Primary trend: Bullish

Buyers are predominantly victorious here. If the level 1.3800 is broken, the level at 1.3850 would easily be penetrated; thus making the level at 1.3900 the next object of attack. If these levels can?t be violated, then a strong bearish trend would occur. You should know what to do if you?re wrong. Failure to abort your losses is like making a rod for your own back.

EURNZD

Primary trend: Bullish

There?s no question about why this exotic cross is riding in a predominantly bullish mode (remember the earthquake). Since the beginning of this month, the market has moved up by roughly 1300 pips. The price is trying to inch above the SMA 20. The ADX 20 level is still showing a very strong trend. +DI has gone much above its ?DI. The present extreme bullish bias may cause a temporary pullback. Yes any pullback on this pair is expected to be temporary. Only something unusual can cause steep a fall on this market.

AUDJPY

Primary trend: Bullish

I said earlier that the market conditions are generally difficult at the present. I have no open positions at all. The weakness of the JPY is obvious, yet any noteworthy bullish attempts are invariably rejected. The present consolidation phase is paving a way for a serious breakout. Economic data can affect Forex considerably ? especially if the announcement was significantly different to what the public was expecting.

Conclusion: To perform well in a field, a person must master the information and skills specific to that field. I?m a living witness of the results of persistence and perseverance on the markets. If I gave up when I was totally hopeless on the markets, I wouldn?t be what I?m today. I realized that no-one would be inspired if I surrendered. But I?m glad that I?m now of help to many traders out there. Those who became market wizards faced recalcitrant challenges but continued their journey to success. Novices who later became crashing failures faced similar challenge, gave up and began to broadcast myths about trading. It?s advisable for them to quickly find other things to do (as they think) and see how easy it?s to attain financial freedom or get to the top.

What do you think is the difference between successful traders and so many other traders who have been kicked out of the game? The accompanying quotes from Dan Zanger answer this question:

1. ?For me, it is very easy to cut my losses short and I do it often, but I must say that in a choppy, unpredictable market, this will whittle down portfolio quickly, and it is just part of the game.?

2. ?? I never give up. I never, ever give up. I realize that if I give up, I will never get any money back that I might lose. I always go back to the charts and stare at them for hours, trying to figure out where and how I went wrong, and where in that chart pattern or daily bars could have foretold that this? market was going to crack before it did.?

3. ?Persistence, homework, more homework and more homework is the reason for success. I feel many traders don?t put the time in. They don?t have the desire to learn. They don?t have the laser beam focus to really zoom in with what is working, why it works, what does not work, why it did not work and to put the years in that it really takes to learn all the stuff. People think that trading is going to be easy. They come in and they get crushed after a little while. Then they say they?ll never do it again. Guess what, [they] will never do it again and [they] will never succeed.?

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Email: amustapha@fxinstructor.com

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.

About Me
My Articles

?You cannot be a successful trader if you are not willing to have both profits and losses? “It?s like only wanting to breathe in and not wanting to breathe out.” Both are a significant part of the trading process… The other half of the equation is also important (and equally puzzling). You can?t put too much importance in gains. People who value profits too highly, tend to take them quickly. Why? Because if they don?t take them, they are afraid they will get away.? ? Dr. Van K. Tharp

Hello:

It?s true that if you continue to work hard on the market, you?d eventually achieve constant survival that you dream of.

Last week, my GBPJPYUSDCAD Hedging strategy experienced some tolerable drawdown ? something that would be recovered soon. In addition, I saw about 7 gap trading setups on Monday and I traded accordingly. On Friday, I closed all open positions with roughly 500-pip profit. Yes my clients? appetite is being whetted in advanced, since they?re ready to become beneficiaries of this effective trading methodology.

Last week, I was again invited by another former trainee of mine. As a financial expert, he served in the federal civil service for 35 years. After retirement, he dabbled into agriculture without expert knowledge ? only to lose a lot of money. Can you now see that trading isn?t the only business that entails serious challenges? However, he was lucky enough to have started Forex training on the right path. He practiced rigorously for almost 3 years before deciding to play the market with real money.

When I saw the account he was managing, I was amazed. He?d made over 2600 pips in 4 months! I saw 500+ pips as open profits and they increased to almost 700 pips before I left. I was extremely glad that he?d stuck to the risk management parameters I recommended to him. He was able to survive December and January as well, plus he suffered occasional drawdowns which were recovered eventually. If you feel that 26% returns in 4 months are a small profit, then it?s high time you did something else.

He and the engineer I visited earlier had something in common. This thing would soon be revealed to my clients. Yes my trainees and clients are the direct beneficiaries of my trading methodologies.

How Top Traders Think
Top traders believe in their trading systems (systems that have positive expectancy) and their own ability to remain calm whatever happens on the market. They know that trading is a game of probabilities.

They know that all trading strategies in the world would have periods of losses each, and therefore survival is all about limiting your risk and giving away as little portion of a trading portfolio as possible. Whenever a strategy experiences a drawdown, they know it?s just part of the game ? for the strategy would recover in due course. It?s only a matter of time. They know that they don?t need to expect every trade they take to win: what they need to do is trading according to their entry criteria and managing each trade according to their predefined rules. They don?t ignore a trading signal merely out of fear, nor do they increase their risk because of overconfidence. Their main goal is to be more effective in trading, not struggling to force out higher hit rates.

Dr. Van, quoted above, says further: ?Most people? want to be right all the time. They want to make money on every trade. Yet that will not happen because losses are a part of the trading process. When you understand the relationship, however, you can come to terms with losses and make them okay. A natural part of the trading process is to have a point at which you must unload a position or trade at a loss in order to preserve your capital. Those losses will happen to most people about half of the time or more. And you must make them okay or neutral. If a loss is not okay, you will not take it. When you?re not willing to take a loss, it usually gets a little bigger. When it rains, it pours. As a result, it becomes even harder to take?much more painful. If you didn?t take it the first time, as it becomes bigger you will be even less likely to take it. What?s likely to happen? It probably will become even bigger. The cycle typically continues until the loss becomes so big that you have to take it. This typically occurs when you get a margin call from your broker.?

For certain people, it may take many years to develop a normal trading mindset; for others, they speed up their personal evolution as traders and survive their learning curve more quickly than imagined. If you can cultivate the kind of the mindset discussed here, you?ll soon see the seed of trading genius germinating within you. The team here at Fxinstructor.com is doing everything in their capacity to help you become the best trader you can be. You?ll do yourself a great favor by capitalizing on the services they offer.

NB: An article about effective gap trading in Forex is coming soon. Plus my article next Sunday would discuss the power of correlation.

Please let me end this article with another quote from Joe Ross:

?Accurately gauge your trading skills and trade accordingly. If you’re a master trader, then it’s important to trust your instincts. But if you are a novice trader, it’s prudent to be a little more cautious. Don’t trade beyond your skill level. Realize that you may not have the experience to trust your instincts unconditionally. Trading takes experience and practice, and until you reach the status of a master trader, manage your risk, take it easy, and hone your trading skills.? ? Joe Ross

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Email: amustapha@fxinstructor.com

Yahoo! Messenger ID: saazalmu

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.

Breakthrough on Forex market! Long-awaited book “Conversations with Forex Market Masters” by Dr. Dariusz Swierk is out now! Ten amazing interviews with Forex top traders with extended commentary will change your trading style forever! “Conversations with Forex Market Masters”

A GRASP OF REALITY ?You can never achieve anything worthwhile in life by taking shortcuts and in the world of trading, it is absolutely no different.? ? Sam Evans Hello: Today we?re going to comment on the real past performances of a group of top traders. There are lessons we can learn from this. These [...]