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Friday, February 18, 2011

Weekly Trading Update (February 18, 2011)

“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

Senior Analyst

FX Instructor, LLC

Email: amustapha@fxinstructor.com

Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:

www.fxinstructor.com/blog/author/amustapha

www.fxinstructor.com/blog

Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal

And my past articles are also available at: www.ituglobalforex.blogspot.com

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

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