Sir/Madam:

I saw amazing gaps on some currency pairs early this morning. There can’t be right or wrong. The gaps moved in favor of some and against some – just like any fundamental items or technical expectations. It’s still 50/50 chance.

There is one account I’m running for now, with slightly tighter stops and slightly tighter take profits. I noticed that I’ve made a profit of over 30% since February 18, 2010. Of course I still use my ITU Global strategy, but this is simply an adjusted position sizing. However, I won’t switch to that position sizing strategy now. If I’ll do that, it would be around April 18, 2010. I have my reasons for this: I just want to see how more profits unfold in the course of the time. No trailing stop is used on it at the present. When I finally switch to this, I’ll give you the parameters. My system isn’t perfect, but it makes me survive the markets.

You may wonder why I don’t apply the position sizing adjustment right away. It’s simply a matter of patience. I’ve watched over and over how people lost due to lack of patience. I know that I have nothing to gain from Impatience.

Many would get a system and use it with high expectations. Sooner the system would be abandoned if it’s experiencing a losing streak. They’ll start looking for another system. Captivated by the marketers promises of the moon and the stars, they use the newly found system (whether auto or manual). But abandon it during another losing streak. Why?

1. They are risking too much per trade, and so the losing streak they experience is a huge blow to their portfolio. Yet effective risk managers survive losing streaks.

2. They still dwell in the illusion of the possibility that there are some magical systems somewhere. So they think a good system can’t experience losing periods.

3. They purchase systems and apply them directly to their accounts without using them in simulation modes first – thinking the results the marketers show are OK. Even when they do, it’s usually from a few days to a few weeks, and they don’t even take the simulation accounts serious.

Where is now the Holy Grail?

Van K. Tharp answers:

‘’The key to the Holy Grail is in applying position sizing (money management) to a high expectancy system (good risk-to-reward) and in controlling yourself (discipline). When you realize that deep inside, you’ve taken a giant leap forward in your personal evolution as a trader…’’

Your questions and opinions are highly welcome.

Thank you.

Yours faithfully,

Azeez Mustapha

Forex Signals Strategist, Funds Manager &Coach

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