“… It is intuitive to stay with losing trades; it is counter-intuitive to have a stop loss and to embrace small losses. It is intuitive to get out of winning trades too soon; it is counter-intuitive to let your winners run. It is intuitive to enter a trade in the direction of the price action after an extended rally or sell-off; it is counter-intuitive to wait for the imbalance of buyer and sellers to go against the herd. And, it is intuitive to pile on multiple indicators in an effort to get as much information as possible; it is counter-intuitive to reduce and simplify incoming data. Default thinking is often intuitive; it follows naturally occurring biases, which make it difficult to follow-through with pre-determined objectives.” – Dr. Woody Johnson

Hello:

This is an update on some of the movements on the markets and what I’m doing about them, plus our losses and profits. The analyses are based on daily charts, looking at the Big Picture, though my entries are on a smaller timeframe. My preferred leverage is 1:100 and our position size is 0.01 lots for each $1000. My maximum drawdown in a week is 3% (worst case scenario). I use the Price Behavior rules for strategic decisions and customized indicators for tactical entries. I 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.

We need to trade like an insurance company to ensure our ultimate survival, because over time the insurance company will make more money than the insured. We’re fortunate to have so many vehicles at our disposal, but we need to know the right time to utilize them and protect and insure ourselves against risks.

AUDUSD

Primary trend: Bearish

I plan to buy at 0.8755 and ride it till I’m stopped out. Despite the fact that the trend has been bearish, there are many factors pointing to possible bullish correction or reversal. Just note that the present bearish trend is weak.

NZDUSD

Primary trend: Bearish

The present overall trend has been bearish for a few weeks. Price level 0.6950 was tested before a temporary bullish correction and it stands the possibility of being tested again, after which the price is expected to move up.

Order: Buy Limit

Entry date: September 1, 2010

Entry price: 0.6940

Initial stop: 0.6790

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Pending

Profit/loss: N/A

Percentage growth: N/A

EURCAD

Primary trend: Bullish

There is no open order on this cross right now. The high spread on it is simply not a significant since I only go for long-term trades, looking for hundreds of pips. I’m looking for a serious turning point on the market. For example, I may sell at 1.3700 if the price eventually gets there.

EURAUD

Primary trend: Bearish

Price level 1.4150 was tested and broken before the market went up. It’s assumed that the market would retrace and even test the strong support at 1.4100 before going up. The price could even push further lower in the present bearish scenario (as indicated by the SMA &ADX, and eventually the EURAUD is supposed to shoot up.

Order: Buy Limit

Entry date: September 1, 2010

Entry price: 1.4090

Initial stop: 1.3840

Current stop: N/A

Exit price: N/A

Exit date: N/A

Status: Pending

Profit/loss: N/A

Percentage growth: N/A

EURNZD

Primary trend: Bullish

It’s better to stay way from this cross for now until it hits a strong level where the turning potential is high. It’s unthinkable to hear how certain eccentrically superstitious people are about the markets. Someone went to a soothsayer to know what he could do to stop the consistent losses he was experiencing on the markets. The soothsayer told him that since the markets were controlled by demons, he needed to sacrifice a goat to conciliate the demons in other to make consistent profits from the markets. Readers, should I slaughter a goat when I finally see a signal on EURNZD? Or don’t you want me to make a profit? LOL!!! It’s extremely absurd indeed.

AUDJPY

Primary trend: Bearish

Bullish correction was rejected when the price hit 77.50. I’m looking forward to a possible long trade when the price hits 73.45, though other factors have to be taken into consideration.

Conclusion: False breakouts are no longer a curiosity and sustained trends are rather a rare find. I t shouldn’t be forgotten that though all strategies will face stubborn challenges on the markets, good risk management will help them survive. So trading isn’t how much money you make – it’s how much you don’t lose.

Please, I’d like to conclude with this quote:

“To be blunt, over time, the capital of those who fall for the illusion trap typically ends up in the bank accounts of those who focus on the reality of pure supply and demand in markets. The objective supply and demand relationship in markets is revealed most clearly in price and price alone.” – Sam Seiden

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.

Nice trading tips are available at: www.ituglobalforex.com

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

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