“Despite their knowledge of trading, the vast majority of traders experience fear on a level that compromises their capacity to trade effectively. This problem eventually comes to a boiling point somewhere in the evolution of a trader. At this turning point they either leave trading, continue to suffer losses, or begin to take a closer look at themselves. They recognize that the Holy Grail is not “out there” in their system or methodology. The trouble lies within them. And the culprit is fear. The solution also lies within them.”– Rande Howell


Sun Tzu once said “He who knows when he can fight and when he cannot, will be victorious.” Knowing when not to trade is equally, if not more important, than knowing when to trade. Those who think they got to trade day in day out are laying foundation for our success: we’ll benefits from their mistakes. Longevity and safety of your account are far more important than overnight profits. George Soros made 40% annual profits for 10 years in a row. Jim Simons made 40% annual profits for 15 years in a row (these are rough estimates). They become trading legends. So legends aren’t those who double their accounts always, but those who make presentable consistent profits over a long period time. The problem is that most of us enter into the trading world with the wrong mindset (inculcated into us by deceptive marketers and sly seminar people). And in most cases, 90% of traders won’t heed simple advice until they learn their lessons thru trying experiences. I solemnly pray this doesn’t happen to you!


Primary trend: Bearish

This pair experienced a gap down at the beginning of this week, and as a result of this, there’s been a bullish rise. However the long-term bias remains bearish – unless there’s a consistent move above the 1.0000 level. My last sell order was closed with 12-pip loss upon generation of a ‘buy’ signal. I’m still holding the position.

Order: Buy

Entry date: January 31, 2011

Entry price: 0.9968

Initial stop: 0.9868

Current stop: 1.0059

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 180 pips

Percentage growth: 1.8%


Primary trend: Bullish

The movement on NZDUSD is similar to that of the AUDUSD, except that the bias on the former is still bullish. The gap down at the beginning of the week later caused a rise in price. It was because the price hit a demand zone after a temporarily forceful pullback in the price; and in the context of an uptrend. The trap that was set for a partridge caught an iguana.


Primary trend: Bullish

The trend movement on this cross is predictable with over 70% accuracy. In the present bullish run, it seems nothing would impede the movement on the market except an exponential weakness in the Euro; something that would happen eventually.


Primary trend: Bullish

I’m having a short trade on this pair. The strong resistance at 1.3890 seems impregnable to buyers – which may halt the current bullish move. A gap up at the beginning of the week may be a sign that buyers would soon become casualties on this market. Whatever the market does, the most important thing is to observe your trading rules and take actions accordingly. Not all fruits are edible.

Order: Sell Stop

Entry date: January 28, 2011

Entry price: 1.3700

Initial stop: 1.3800

Current stop: 1.3528

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 269 pips

Percentage growth: 2.6%


Primary trend: Bullish

The price on this exotic cross has been moving up since last week. The battle between the bulls and the bears has been critical and it seems the price was reaching some equilibrium before the sellers’ stamina thinned out. The price has moved above the SMA 20. The ADX 20 level is, nevertheless, showing low volatility. +DI is only slightly above its –DI counterpart. My former short trade gave me a profit of 100 pips (the market moved in my favor, and later reversed. It hit my risk-adjusted stop). I got another short position. The market looks tricky.

Order: Sell

Entry date: February 2, 2011

Entry price: 1.7832

Initial stop: 1.7932

Current stop: 1.7725

Exit date: N/A

Exit price: N/A

Status: Open

Profit/loss: 191 pips

Percentage growth: 1.9%


Primary trend: Bearish

The considerable gap down in the price at the start of this week caused a steep rise in price, which was curtailed as soon as the price hit the upper Bollinger Bands. The market has been indecisive since then. If the price can’t push the upper Bands constantly higher, then a steep fall in price looms. Please bear in mind to minimize losses and capitalize on profits. By doing this, you’ll not see the market as a bete noire.

Order: Buy Limit

Entry date: January 13, 2011

Entry price: 82.00

Initial stop: 81.00

Current stop: N/A

Exit date: January 20, 2011

Exit price: 81.82

Status: Closed

Profit/loss: -21 pips

Percentage growth: -0.2%

Conclusion: Without patience and rock-solid discipline, no one can have long-term success on the markets. More frequent trades don’t mean more profit (it may even contribute to faster drawdown). I often ask myself this question: “What did I gain in my novice years when I was in a hurry to make big money?” Answer: Nothing. Please take note. Be patient!

This article is ended with quotes from Joe Ross, a highly effective eclectic trader with over 50 years of experience:

“Those who stay on the cutting edge will prosper. Traders can prosper under any market conditions. Be prepared to go where the money is. Do not tie yourself to… one single time frame. You will need to display a great degree of flexibility and adaptability in 2011.”

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.

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