‘’Don’t take action with a trade until the market, itself, confirm your opinion. Being a little late in a trade is insurance that your opinion is correct…” — Jesse Livermore

Hello:

This is an update on some of the movements on the markets and what we’re doing about them, plus our losses and profits. The analyses are based on daily charts – looking at the Big Picture. Our preferred leverage is 1:100 and our position size is 0.01 lots for each $1000. The maximum risk on each trade is 1% in a situation of an initial stop. We use the Price Behavior rules for strategic decisions and our customized indicators for tactical entries. We open primary positions without predetermined exit target in mind, riding the trend for as long as it continues. The value of patience will forever be emphasized. As long as we stick to our rules and keep our risk low, we’re immune to fear. No one can trade well when their attention is on what their mind is saying and how they feel. If a person has goals to become a successful trader, then they need to do whatever it takes to learn a methodology, practice it over and over again until it becomes second nature.

Note that the instruments we trade have been ranging since early last week. There are no clear directions. There’ve been false breakouts and indecisive movements. Most of those pairs/crosses haven’t even gone up or down by up to 200 pips since last week. We’re no scalpers or short-term traders (something I was doing in my early years in trading). Our strategy is only much more useful in trending markets. Some think markets would range throughout in August since some traders have imposed long vacations on themselves. Let’s wait and see how this is unfolded. I’ve personally seen strong trends during this period as well.  The current market conditions can be described as ‘calm before the storm.’ If you’re doing range-trading or scalping, beware, for the storm may arrive anytime in any direction; and without notice.

AUDUSD

Primary trend: Bullish

This is a sluggish bull market. We’re waiting for a clear confirmation before we enter the market. Sometimes the best trade is the one you don’t enter.

NZDUSD

Primary trend: Bullish

The price is clearly quoted above the SMA and the ADX also indicates the bull’s power. But the bullish momentum is decreasing. We’ve earlier closed – pips on this pair earlier this week and now looking for another possible entry.

Order: Sell

Entry date: July 27, 2010

Entry price: 0.7229

Initial stop:  0.7329

Current stop: N/A

Trailing stop: N/A

Exit price: 0.7282

Exit date: August 2, 2010

Status: Closed

Profit/Loss: -53 pips

EURCAD

Primary trend: Bullish

We’re looking for a fresh bullish signal on this pair. Sellers have been overpowered often and often since the beginning of the last week. If we’re in a situation of profit, we know what to do. After banging his head against the wall for 21 year, a top trader has warned us that we shouldn’t let a very good profit turn into a loss. If we’re in a situation of loss, we know what to do.

EURAUD

Primary trend: Bearish

The high probability is to sell and we’re looking for a point of entry. Despite the uncertainties and eccentric peculiarities inherent in the market, trading should be enjoyed (it isn’t meant to give you hypertension), if you’re doing the right thing. I’m presently enjoying the track Say Say Say, By Michael Jackson &Paul McCartney. Forgive me please; I have an old mind in a young body.

Order: Buy

Entry date: August 3, 2010

Entry price: 1.4538

Initial stop:  1.4338

Current stop: N/A

Trailing stop: N/A

Exit price: 1.4490

Exit date:  August 3, 2010

Status: Closed

Profit/Loss: – 48 pips

EURNZD

Primary trend: Bullish

It’s like the EURNZD is going opposite EURAUD (whereas these crosses are known to correlate each other). The high probability trade is to buy, though we may see a serious movement to the downside. Whenever you’re trading, make sure you’ve a clear plan about what you’re doing. Don’t listen to conflicting opinions. If you find yourself at a party, you might want your friends around you. But if you’re alone with your girlfriend at night, you wouldn’t want your friends around you. For they might suggest: “Go faster, go slower, turn to the right, turn to the left.” And to be honest, all these suggestions wouldn’t improve any stats.

AUDJPY

Primary trend: Bearish

We’re having a Sell order here. There is a strong resistance at 79.30 which has been tested and rejected. You see, discretion will forever be the better part of valor. Common sense is needed when trading. If a robot were programmed to go down a street and shoot, it wouldn’t relent. A robot isn’t afraid. But if I told Setyo Wibowo to go down the street and shoot. He might reply, ‘No, Thanks. Perhaps we should have some drinks.’’

Order: Sell

Entry date: August 4, 2010

Entry price: 77.91

Initial stop:  78.91

Current stop: N/A

Trailing stop: N/A

Exit price: N/A

Exit date: N/A

Status: Open

Profit/Loss: -39 pips

Conclusion: On Sunday I declared we’d be tougher on Mr. Risk. The technique we’ll be using is time-tested and based on years of conscientious observance. Generally when our entry criteria are met, we’ll like to play the market, let it ride unless it gets back to our entry price. This is called a retest and they’re very dangerous. At a point of retest we’ll generally limit our risk. Although our maximum risk on a trade is 1% per trade we may want to exit at around 0.5%, or more or less than that – even if the market would still reverse in our favor – thus looking forward to another entry price. The main objective is to allow as small losses as possible whenever the market condition isn’t favorable to our strategy. And when the market is favorable, we move far ahead. The key to long-term survival still lies in your ability to sustain small losses during bad markets, and close big profits during good markets.

I’d like to conclude this article with this quote; it exactly fits my trading mindset:

“Before I even place a trade, I know exactly what I will do every step of the way, should it go against me, partially work for me or turn into a runner. I see myself as a planner, not a reactor, and I must know exactly what actions I will take throughout each segment of the position to not only be consistent, but to maintain my own personal sanity. A clear mind is far more useful than an emotionally clouded one.” – Sam Evans

Your questions and opinions are highly welcome.

Thank you.

With best regards,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

Email: amustapha@fxinstructor.com

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

©2010 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.

.