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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

?If you NEED trading to be complicated or complex, stop reading now and definitely don’t come to one of my classes!? ? Rick Wright

?If a strategy sounds complicated, it likely does not work.? ? Sam Seiden

Hello:

It?s unthinkable that many traders use complicated methods to trade. Some traders combine several pieces of expensive charting software and indicators together, thinking that it would enable them to make more accurate trades. They forget that they?d hardly achieve over 50% accuracy on a long-term basis. A combination of several indicators and complicated trading ideas doesn?t improve the stats. This combination would only cause analysis paralysis. You might be deceiving yourself that you have a higher hit rate with your trading system. This is illusory. If a coin was tossed endlessly, the long-term share between heads and tails would be a well balanced 50/50. But there?ll be times when heads would remain ahead several months long or the other way round. You may get a head several times in a row, then a few times a tail, and then many times a head; making you to conclude that you got a better hit rate. But ultimately, the hit rate would level out at 50%

Each indicator has a different way of generating signals and when most of them finally agree, the winning edge is likely gone. Generally when you combine several indicators and look for a million reasons to enter a position, you?re making your trading life unnecessarily hard.

A single moment?s carelessness or psychological weakness on the part of a trader may ruin the work performed during an entire trading day or even a whole week. Basically a trader trades his account and not the market. Consequently, he should always keep an eye on the volatility of his account. During drawdowns position sizing must be reduced drastically. Only that way can a trader get through bad patches and ensure his long-term survival. This has nothing to do with how you make your trading decisions, but it has a lot to do with how you manage your risk.

How can a trader gain over 250% in a short time, only to have up to 85% drawdown in his trading portfolio within another short period of time? The answer is that the person doesn?t know about effective position sizing and risk management. Plus he/she may be using excessive leverage indiscriminately. Mike Kulej, a maverick of the financial markets, explains that brokers overplay the availability of leverage. They manage to point out advantages, but not the risks. Leverage itself will not make anybody better trader, it will only magnify losses and gains. In addition, trading with high leverage adds to the already highly emotional nature of this activity. It is natural that a trader wants to make as much money as possible, but before using leverage, one should prove it to him/herself that the account is actually growing.

I?d suggest trading with very small position size.

I once said that your chart needn?t look like a Michelangelo?s painting before you can make better trades. In one of my coming articles, I?ll show you how thousands of pips can be made from trading with only one indicator. I even know one popular and permanently successful funds manager who doesn?t use any indicators: he only follows the trend he sees on the charts. The truth is that it?s thru safe and sensible position sizing and risk management that we meet our trading objectives, not thru complicated analyses that supposedly give us entry signals.

Please clean up your charts, and thus make life considerably easier for yourself. If you need to know whether the market is moving up or down or sideways, simply look at your chart. You don?t need fancy indicators to tell you if a chart is trending or not, all you need to know is contained in the price action itself.

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)?, ?Developing The Right Attitude Towards Losses?, ?3 Recent Gap Trades,? ?Trading For A Livelihood,? etc.

I?d like to conclude this article with more quotes from Mike Kulej:

1. ?Incidentally, all types of technical analysis will have good and bad times. Does not matter what indicator, pattern or charting method is used, nothing is 100% correct. The trick is to not to get discouraged during losing periods, which are sure to happen.?

2. ?This may sound old and worn out, but always use stops. You will not get mega rich in a day, yet can go broke in one if, a stop is not in place? Preserve your capital.?

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

NOT GOING BROKE IS BETTER THAN QUICK RICHES

?For one or two trades, luck can play a part. Beyond that, luck has nothing to do with successful trading.? ? Joe Ross

?A lucky outcome, such as winning a lottery, is not a skilled performance.? – Brett N. Steenbarger

Hello:

What do you think is more important, not going broke or getting rich quickly? Most marketers however, would want to make you think that getting rich quickly is what matters. These deceptive marketers come to you as helpers who have solutions to your trading challenges, but in fact, what you?ll learn from them is a recipe for financial disaster. There?s nothing bad in trying to market any services that can help other traders achieve better results, provided people are told the right things about trading. For example, a marketer showed how an account has grown by 500% in 6 months, with high risk settings. Plus, the starting capital was $500 and the volume of the first trade was 0.2 lots. Are you kidding me!

I don?t want to go into numerous examples of high risk settings. As a trader, you should know the amount of risk for each of your trade. You should know if your risk is too high or low enough. The purpose of this article is to show you how you can resist the urge to use high risk.

Once again, professional traders go for small and consistent results whereas gamblers go for jackpots. Such gamblers dream of making it big or striking it rich with seemingly easy trades, without realizing the price they?d eventually pay for such high risk. If you?re using high risk, you need to make adjustment to your position sizing.

Many traders fail to see the link between their position sizing and their trading results. You ought to avoid position sizing strategies that needlessly shorten the life span of your capital and impair its longevity. If your trading results are poor, then you must make adjustment to your risk parameters. When you make safer adjustments to your position sizing strategy, setting reachable goals for yourself, things would improve gradually.

Eliminating long-standing wrong mindset can be daunting, and making even small adjustments to your risk parameters often requires strong motivation. Even the threat of margin calls and financial catastrophe wouldn?t move some to take effective risk management seriously. It normally takes time ? weeks or months ? before a normal trading mindset becomes second nature. In the meantime, if you don?t see immediate benefits from your extra efforts to do the right things on the markets, don?t despair. If you persist, in spite of setbacks, your trading results are likely to improve.

Assessing the Dangers of High Risk
Before you use high risk settings for your first or next trade, please pause and think. You oughtn?t to be like a quail going into a snare because of a bit of food. True, there may be a short-term reward for doing that, but what a price it pays eventually! Would you want to be like a quail which fails to see the danger of something attractive but deadly?

When people ask me why I don?t use high risk, I?d answer: ?Because I don?t want to suffer a huge drawdown and shorten the life span of my trading portfolios.?

Despite being aggressively tempted to use high risk by some marketers; you may find that the greatest pressure comes from inside yourself. If that?s the case, answer your ?inner voice? by reasoning on these questions: What would I gain in the long run by using high risk? For instance, if I want to get rich quickly, would I survive long on the markets? Am I not being lured by those who tempt me to damage my trading account? How much would high risk cost me per trade? Can I survive a few losing trades in a row with this high risk? Would other traders respect me again if I had significant losses? Would I be willing to blow my account because I want to satisfy my greed?

Taking Steps to Abandon High Risk
1. Document the benefits of using low risk, and call these benefits to mind regularly. A desire to permanently keep you trading portfolio safe despite market uncertainties can be a powerful motive.

2. If you?d been using high risk, now is the time to stop it. You may request the help of experienced trading risk managers, and let them know about your trading activities. They can lovingly guide you.

3. If you find it difficult to quit using high risk parameters immediately, stop trading temporarily and give yourself 2 weeks or less, and note the day you?re going to quit. Please honor your plan.

4. Get rid of anything whatever ? books, newsletters, online services and websites ? that encourage high risk.

5. Stop dealing with any professed trading experts who don?t seem to know what risk management is all about or who fail to show it in their trade examples.

6. Temptations to use high risk would always come to you. Never use high risk because you?ve been told that one trading system is ?a Holy Grail? or because you?re confident one trade would move in your favor. The discomfort in using low risk settings may be temporary, while the benefits are permanent.

7. Never fool yourself by thinking. ?I?ll use high risk on this one trade. Such rationalization may lead to a relapse to using high risk constantly again, especially if that ?one trade? ends in a big win.

Summary
Sly marketers show huge profits (often arising from high risk) to attract unwise traders. Why take their bait? Neither those who encourage the use of high risk nor those who present their trading systems as being magical (with unreasonable guarantees) have your best interest at heart. Rather than listen to them, try to delve deeper into the principles of effective risk control strategies. This will benefit you greatly. Coping with temptations to use high risk is much easier if you?re aware of its dangers. Why not contact a known risk management expert for further assistance?

NB: A great trading lesson would be revealed in my Weekly Trading Update (March 11, 2011) and the article next Sunday is titled: ?Clarifying Your Issues ? Part 4.? An article about effective gap trading in Forex is also coming soon (but only my clients would have access to the account on which it?s being traded).

This article is ended with more quotes from Joe Ross:

1. ?If you are too busy to be disciplined, then you are too busy to trade. If you don’t discipline yourself, you will soon disappear from the trading scene.?

2. ?I feel a trade is successful if it has met my trading goals?which are not necessarily money goals. Sometimes you need to know that you did what you were supposed to do, even though you had a loss on the trade.?

3. ?Most advertisers of courses, systems, books, etc., will mislead you into thinking that you just can?t lose if you buy what they are selling. We are talking here about hype, major hype ? as much as the authorities will allow them to get away with? Find out everything you can about markets and how they work before you start trading. Do not look for anything magic, it doesn?t exist.?

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

THE POWER OF PRICE MOVEMENT

?The market does not reward iconoclasts.? ? Joseph Trevisani

Hello:

Technical analysis is essentially the study of human behavior. Many price actions can be used to the trader?s advantage provided that he understands how each price action functions. Correlation as a price action is of enormous importance. Markets are generally uncorrelated during consolidation periods and correlated while trending. We generally operate under the assumption that losses generated when the trend weakens will be recovered when the trend resumes.

The Pedigree of the Strategy
There had to be better ways of curtailing risk and correlation strategies are proving to be one of the answers. Correlation is good profit in itself, as well as being an effective check on risk. For those who weren?t aware of it, the EURUSD tends to be negatively correlated with the USDCHF, whereas it often gets positively correlated with the GBPUSD. Furthermore the AUDUSD and the NZDUSD generally get positively correlated; and so are the EURAUD and the EURNZD. Likewise, the EURJPY and the GBPJPY are positively correlated. There are other examples that time wouldn?t permit me to mention.

This article would focus on the EURUSD-USDCHF correlation. It?s very rare to see both the EURUSD and the USDCHF going up, but it isn?t rare to see both of them coming down. What would happen if the EUR is weaker than the USD while the USD itself is weaker than the CHF? Both the EURUSD and USDCHF would be caught in bearish moves (as evident in December 2010). With this strategy, I consider it sensible to call short trades only since it?s assumed that a pair that rises would eventually fall. Short positions are opened each on the EURUSD and USDCHF. A loss from one pair is recovered by a profit from the other pair. Plus profit would be maximized if both pairs are falling. It?s easier for spot Forex prices to drop than to rise, and there?s no such thing as a permabull market.

Entries and Exits
This is an NFA-compliant cum non-directional strategy: it?s a purely discretionary system ? incorporating rule-based entry and smoothing techniques. In order to know when to enter and when to exit, the RSI (Relative Strength Index) 14-period is used. There?s a need to avoid too many or too scanty signals, and that?s why a 4-hour chart is used. The chart we watch is the EURUSD chart. We enter 2 ?sell? orders on the 2 pairs when the RSI is in the overbought region and exit when it gets to the oversold region (with the understanding that there would be a positive difference between the result of the EURUSD trade and the result USDCHF trade). We don?t enter the market again until the RSI reverts back to the overbought region. Please, bear it in mind that it may sometimes take a long time for the RSI to move from the overbought region to the oversold region and vice versa.

Trade Management
As said earlier, loss from one position is compensated for by profit from the other position. Moreover, profit is usually optimized in that the EURUSD moves faster than the USDCHF. A position size of 0.01 lots per trade is used for each $1000 (thus making it 0.1 lots for each $10000). The Stop Loss is 500 pips from the entry price and no take profit is set ? for profits are always taken when the RSI is traded thru. The wider the Stop, the larger the annual returns, but the tighter the Stop, the smaller the annual returns (whereas tighter Stop reduces the exposure of a portfolio). The tighter the Stop, the higher the number of trades, and vice versa. The tighter the Stop, the lesser the trading accuracy while a wider Stop brings more accuracy (but lesser accuracy can also bring good results). Coupled with small position sizing, a tighter Stop brings higher drawdown whereas a wider Stop brings smaller drawdown.

A Trade Example
The accompanying chart depicts the EURUSD when it was falling and how I took an advantage of it. Between December 31, 2010 and January 10, 2011, the EURUSD fell by over 450 pips. You?d get more insight into this correlation methodology by trying to check the 4-hour chart movement on the USDCHF during and after this period. The vertical red line on the left shows where a short trade was entered and a similar line at the right shows where it was exited. The strategy you need to make money should be simple, but powerful.

Conclusion: It?s very much important that enough patience is exercise as regards the entry and exit criteria of this strategy. The article above is a free gift for all my readers (it shouldn?t be used for any commercial purposes), and therefore any questions and opinions about it are welcome. Finally, it doesn?t entail any solicitation to assume a market decision.

NB: An article about effective gap trading in Forex is coming soon (but only my clients would have access to the account on which it?s being traded).

I?ll end this article with a quote from Christian Lukas:

?The enormous effort that goes into collecting information can be considerable reduced by using a systematic approach ? If a trader achieves profits after careful analyses, then these are based on his own skill, which creates confidence. And if he makes loses despite spending a great deal of time conducting an analysis, he knows at least that those losses are just part of the system.?

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

?One of the highest orders of trading success is the ability to rapidly change market opinion? One could even say that limiting risk is the most important point in trading.? ? Marko Graenitz

Hello:

A novice trader is happy when he wins a trade but becomes angry when he loses a trade, whereas a professional trader is indifferent to both winning and losing trades. What matters most to a professional trader is the discipline to follow his rules and trade accordingly. Being a master trader isn?t something that is beyond your reach; only that you must accept some established trading facts. If you fail to accept these facts, I can guarantee you that you?d accept them the hard way (usually thru your personal experiences).

You?ve no control whatever of the markets. The markets will do what they?ll do: they move without having you in mind. Their movements can be in your favor or against you, and that?s why you need to risk as little as possible when trading. This little risk is your personal choice. It ensures your survival when things go against you. You can determine when to trade and when not to trade, plus how you?d trade. You?re responsible for whatever you do on the markets. You can?t predict the future, nor can you predict the markets correctly always. There?s no way around these facts.

AUDUSD
Primary Trend: Bullish
The AUDUSD experienced occasional pullbacks in price but never went lower than 0.9940. It seems that the pair is posed for another bullish run, provided the dollar fails to gain any meaningful strength over time. I got a pending order on the pair.
Order: Buy Limit
Entry date: February 17, 2011
Entry price: 1.0015.
Initial stop: 0.9915
Current stop: N/A
Exit date: N/A
Exit price: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: 0

NZDUSD
Primary trend: Bullish
There was some weakness in this pair, but it now looks like the weakness is coming to an end. Should there be any meaningful strength in the NZD, then this pair would rise steeply. I set a pending order with the hope buying some correction. The expectation is not 100% guaranteed, yet whatever happens on the markets should be properly handled. That?s why trading psychology and risk management are far more important than any strategy. Well, for those who think that trading systems are the key, it?s a matter of the tail wagging the dog.
Order: Buy Limit
Entry date: February 17, 2011
Entry price: 0.7550.
Initial stop: 0.7450
Current stop: N/A
Exit date: N/A
Exit price: N/A
Status: Pending
Profit/loss: N/A
Percentage growth: 0

EURCAD
Primary trend: Bullish
There has been a serious correction in the midst of the current bullish outlook. This bearish correction was being limited. However the bullish run is also currently very limited. Time will tell whether the buyers would regain power or sellers would succeed in turning the present correction to a new bearish trend.

EURAUD
Primary trend: Bullish
This market has been ranging for sometime now. There were some bearish attempts that failed, whereas bullish attempts were also limited for now. An experienced trader should be prepared for any moves; whether bearish or bullish (using predefined rules). This is tangible. A tangible action is based on realities rather than something theoretical. Theoretical models are based on several unrealistic assumptions.
Order: Sell Stop
Entry date: January 28, 2011
Entry price: 1.3700
Initial stop: 1.3800
Current stop: 1.3528
Exit date: February 9, 2011
Exit price: 1.3528
Status: Closed
Profit/loss: 170 pips
Percentage growth: 1.7%

EURNZD
Primary trend: Bullish
Like I said last week, the bullish movement on this cross has continued because of a noticeable weakness in the NZD. There?s probability that the present scenario would continue. The price is still above the SMA 20. The ADX 20 level is now showing strong volatility. +DI is has been clearly above its ?DI counterpart for several days in a row. I have no open trade on this market yet.
Order: Sell
Entry date: February 2, 2011
Entry price: 1.7832
Initial stop: 1.7932
Current stop: 1.7725
Exit date: February 4, 2011
Exit price: 1.7725
Status: Closed
Profit/loss: 100 pips
Percentage growth: 1%

AUDJPY
Primary trend: Bullish
Since the gap that occurred at the opening of the market last week, this exotic cross has moved upwards by over 300 pips. The weakness in the JPY is corroborated by the fact that the EUR and the GBP have also been rising against it. The odds are against the Yen recently; something that are expected to continue unless there?s a significant change. Out of myriads of ineffectual trading opinions, there would be some effective opinions. Like any river of gold there?s a ton of dross for every ounce of gold nugget.

Conclusion: If the Euro continues to gain strength, we?d see continued bullish movements in EURCAD, EURAUD and EURNZD. Otherwise, these crosses would depreciate considerably. It?s also possible that the USD may gain some sustained strength very soon, and if it?s so, there may be some prolonged bearish moves on the AUDUSD and NZDUSD. If the USD continues its weakness, however, the AUD and the NZD may be able to shrug off any downward moves against the USD.

I conclude this article with more quotes from Scott Andrews, a highly efficient gap trader:

1. ?I started studying and by 2004 I knew that trading was something I wanted to do for the rest of my life?I would say I started with an account that was significantly larger than my trading skills justified. After some initial success, I began struggling and scaled back quickly. I then slowly increased my position size as my confidence and results improved.?

2. ?The only concern I ever really had was how long it would take me to achieve consistent profits and how long my wife would continue to support me and my new passion. Thankfully, she was very patient.?

3. ?The only thing that still ?frustrates? me from time to time is getting stopped out right before a trade becomes a big winner. It does not happen often, but still more than I would like.?

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

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