₦airaland Forum

Weekly Trading Forecasts on Major Pairs (March 7 - 11, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
As it was mentioned in the last forecast, EURUSD has been making some bullish attempt, which, however, has not been significant enough to render the recent bearish bias invalid. Bears pushed price downwards, but met a stiff rejection at the support line of 1.0850. Price then moved sideways and later broke upwards on Thursday, trending upwards by at least 160 pips. Since it is expected that the bullish attempt would continue this week, price could reach the resistance lines at 1.1050 and 1.1100 in the week.

USDCHF
Dominant bias: Neutral
USDCHF merely moved sideways throughout last week, with no directional journey to the upside or to the downside. The sideways movement was generally between the support level at 0.9900 and the resistance level at 1.0000. Nevertheless, there is going to be a breakout this week, which would most probably favor sellers, because this pair would continue to be influenced by gravity as long as EURUSD is making bullish attempt. The support level at 0.9800 could thus be tested this week.

GBPUSD
Dominant bias: Bullish
The bias on Cable is now bullish. Throughout last week, Cable made a perpetual journey to the north, going upwards by 400 pips and almost testing the distribution territory at 1.4250 (after price started going upward from the accumulation territory at 1.3850 on Monday). There is a Bullish Confirmation Pattern in the market and it is much more likely that Cable would go upwards by at least, additional 200 pips this week.

USDJPY
Dominant bias: Neutral
Unlike most other JPY pairs, which traded upwards last week, USDJPY simply moved sideways. This is because USD is not strong enough to take advantage of the weak JPY (as other pairs like AUDJPY and NZDJPY have done). In fact, we can see that USD is weak versus other major pairs (like AUDUSD, NZDUSD, GBPUSD, etc.). This week, there is a probability that USDJPY would continue moving sideways or even consolidate to the downside, for there may not be a significant rally here as long as USD is weak.


EURJPY
Dominant bias: Bearish
This cross traded downwards on Monday, going briefly below the demand zone at 122.50 on Tuesday and then starting a bullish journey on the same day (March 1, 2016), which saw a gain of almost 450 pips at the end of that week. The supply zone at 125.50 has already been tested and it would be breached to the upside as bullish continues to push price upwards. The supply levels at 126.00 and 126.50 are potential targets for bulls this week.

This forecast is concluded with the quote below:

“How about your trading? What reward/risk ratio do you think is acceptable on your trades? Do you have a defined targeted ratio before you enter a position and an acceptable effective ratio resulting from your trades? Do you manage your current reward risk ratio on open positions? Developing a strong and deeper understanding of your reward to risk management can be a great edge and a path to trading mastery.” - Sam Eder (Source: Vantharp.com)

Copyright: Tallinex.com

Greg Coffey: One of the Most Impressive Traders in the World

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 4[i]

“When I encounter traders who lack enthusiasm for trading, I know their foray into the financial markets will be short lived. They seem puzzled that their mediocre efforts, and a tendency to be pessimistic, haven’t led to a bank account full of gold.”[/i] – Louise Bedford

Name: Greg Coffey
Date of birth: April 25, 1971
Nationality: Australian
Occupation: Trader and fund manager

THE WIZARD OF OZ
Greg Coffey is a London-based Australian trader. He obtained a Bachelor of Actuarial Science from Macquarie University. As a trader, he initially worked at Macquarie Bank, Bankers Trust, Deutsche Bank AG, Blueborder Partners (a fund related to George Soros), Bank Austria and GLG Partners.

He didn’t bother to continue working at GLG Partners (GLG), where he was enjoying a brilliant career, forfeiting about $250 million compensation plan. He then worked at Moore Europe Capital Management (a subsidiary of Moore Capital Management); as co-chief investment officer. He’s been so good at trading that he was dubbed “The Wizard of Oz.”

Recently, he earned £170 million in a single year. He bought a 12,000-acre sporting estate on the island of Jura in Scotland in 2008 when it was on the market for £3.5million. A source says that the hunting estate includes several houses and cottages, prolific red deer stalking, ten miles of coastline and seven private islands.

Greg is worth $743 million; and he’s happily married with children.

What You Need to Know:
1. I can’t emphasize this enough: The best thing is to start trading as early as possible, because one would reach financial freedom early. Think of Anton Kreil, John Arnold, Kenneth Fisher, etc. After 20 years of his trading career, Greg Coffey announced his retirement at the age of 41. He’s become so rich that he felt he’d need to retire and do what he likes, rather than working continuously to please investors. It’s interesting that someone retired himself at the age of 41 when many far older people are sweating over pensions. This is one kind of freedom trading offers.

2. While many people stick with one monotonous job for life, a great skill could make you to be one of the most highly sought-after experts, like Greg, who had short stints at several big institutions and firms. He turned down an extremely lucrative offer of $250 million from his then employer, hedge fund GLG Partners, because he didn’t want to continue working for them. He worked for another firm with a very good pay package. He eats what he likes, lives where he likes and wears what he likes. There are many people doing poorly paid jobs, and yet they beg their employers not to fire them. What a pity! By not looking for trading mastery, using it as a means of self-liberation; many people condemn themselves to a lifetime of slavery. To make the matter worse, they have nothing to show for their labor of a lifetime.

3. How much do you think Greg made per annum when he was still trading professionally on a full-time basis? He was making an average of 22% per annum. Unlike those who want to make 22% per week. Can you see the difference? Great trading geniuses don’t double their accounts every week or every month or every quarter: they simply make 20% profits or more or less per annum. Isn’t that good? That’s around what you need to make per year so as to become rich at last, honestly speaking. You can even make far less or far more than this in a year, but you’ll be fine as long as your account is safe.

4. Greg knows that there’s life outside trading and therefore, he keeps trading in its proper perspective. Whenever he went on holiday he would have his trading terminals deconstructed and flown to his hotel. More importantly, he retired himself from trading because he wanted to spend time with his wife and children. He also wanted to go back to his native land – Australia. Trading is great, but there are some other things in our life which are more important than trading, so we need a balanced view of everything. If you’re so rich and you decide to retire as a trader, that’s fine. If you think trading is a passion of a lifetime, that’s fine.

Conclusion: One prolific author says without being patient in a storm, he’d never learn how to protect himself and he’d never learn to recognize the signs of new storms approaching or leaving. Potential blessings often pass by while we fail to take advantage of them. Just because potential blessings, like trading, doesn’t present themselves in the most agreeable way to our mind, doesn’t mean they can’t help us achieve our dreams in life.

This piece is ended with the quote below:

“Why would we believe that if we lack discipline in our day-to-day lives that we would suddenly become disciplined in our trading? That’s just deluded thinking… But the reality is that without discipline all the market knowledge in the world will not help you become consistently profitable.” - Gabe Velazquez

Copyright: Tallinex.com

Trading Signals for JPY Pairs (March 4 - 22, 2016)

USDJPY = Buy

AUDJPY = Buy

CADJPY = Buy

CHFJPY = Buy

EURJPY = Buy

GBPJPY = Buy

NZDJPY = Buy

NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 lots would be used. The breakeven stop is set after about 70-pip profit is made. A trailing stop of 100 pips is set after over 170 pips have been gained. You need to use your technical analysis to know when to enter, since you may want to trade a pair only after your entry criteria have been met.

Disclaimer: Trading signals are provided for information purposes only and shouldn’t be construed as trading advice.

Copyright: Tallinex.com

Monthly Technical Reviews on Gold and Silver (March 2016)

GOLD (XAUUSD)
Dominant Bias: Bullish
Gold has been going upwards since the beginning of this year, with first 7 trading days in February being quite significant as far as the bullish journey was concerned. Price topped at 1263.13 on February 11, 2016. On the daily chart, a Golden Cross had already taken place in early February; and from the middle of that month till the end, price was very volatile as bears battled bulls for a change in the trend. However, bulls have been able to keep the “buy” signal intact as bearish corrections offered opportunities to join the bullish trend. This bullish bias would be valid as long as price does not cross the EMA 200 to the downside on the daily chart. The Bullish Confirmation Pattern in the chart remains intact: Price could test the supply levels at 1270.00, 1290.00 and 1310.00 within March and April 2016.

SILVER (XAGUSD)
Dominant Bias: Bullish
Silver traded sideways in January and broke northward in February, for Gold acted as a catalyst that brought about a serious northward movement on it (as it was mentioned in the last monthly technical review on Silver). Silver reached a high of 15.9150 on February 11 and began to consolidate to the downside after that. Further consolidation for another 10 trading days could force the market to enter a neutral phase in the medium term, while a movement below the demand zone at 14.0000 might lead to a bearish signal. However, there could be a resumption of the bullish trend, especially if Gold holds out its bullishness for the next several trading days.

Copyright: Tallinex.com

Weekly Trading Forecasts on Major Pairs (February 29 – March 4, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
EURUSD traded lower on Monday, and then moved sideways until Friday, when it traded further southward, closing at 1.0931. Altogether, price moved downwards close to 200 pips, while the outlook on the market is bearish. There are support lines at 1.0900 and 1.0850, which would attempt to challenge more bearish movement. This week, EURUSD may be seen making attempts to rally, which might become serious in case bulls are determined enough. In fact, all major pairs would been seen making short-term significant swings in the month of March.

USDCHF
Dominant bias: Neutral
This pair merely traded sideways last week, meandering its way between the support level at 0.9850 and the resistance level at 1.0000. There is going to be a break above that resistance level or below that support level this week, although a break below the support level is more likely, because the resistance level at 1.0000 is a great barrier and because EURUSD could be seen making some bullish attempt this week. Whatever happens this week should put an end to the current neutral bias on the market.

GBPUSD
Dominant bias: Bearish
GBPUSD dropped over 430 pips last week, almost testing the accumulation territory at 1.3850. Further bearish movement is possible this week and next week: Upwards bounces should be taken as short-selling opportunities. Just as it was predicted at the beginning of February 2016, GBP pairs are trending significantly downwards and they would remain under bearish pressure. However, around the end of March, GBP pairs would start rallying significantly.

USDJPY
Dominant bias: Bearish
In the middle of last week, this currency trading instrument started a bullish correction that has actually become a threat to the recent bearish outlook on the market. This trading instrument should continue going further upwards this week, until the recent bearish outlook is rendered completely invalid. On timeframes lower than the 4-hour chart, there are already bullish signals. The bullish correction is also visible on other JPY pairs, which would most probably be seen making commendable bullish efforts this week and next. The outlook on JPY pairs is bright for the month of March.


EURJPY
Dominant bias: Bearish
EUR/JPY cross moved lower last week, reaching the demand zone at 122.50 on Wednesday, February 24, 2016. Since then, price has gone up more than 200 pips – a sort of bullish correction that is also visible on other JPY pairs. Further northward movement of 250 pips would lead to a Bullish Confirmation Pattern in the market; otherwise price could test the demand zone at 122.50 again, owing to bearish reprisals (though it is unlikely that price would go below that demand zone).

This forecast is concluded with the quote below:

“I love the lifestyle of being a trader. I get to run my own business and set my own schedule. They say you should do what you love, and this is exactly what I love. What is there not to love? I wake up, take a few trades during the day, and I'm done! I can move on and enjoy the rest of my day. The best part of this life for me is that it allows me more time to spend with my children. I would not have this flexibility if I worked an 80-hour week in corporate America.” - Richard Mazur (Source: Collective2)

Copyright: Tallinex.com

3 Questions Traders Would Like to Ask Right Now

“The moral of the story is that you don’t know, I don’t know, nobody knows where price will go. Anybody who does claim to know either doesn’t understand how markets work, is selling something, or is delusional.” – Chris Tate

PEOPLE AREN’T WHAT THEY CLAIM TO BE
Why is there so much pretense among those who claim to have mastered trading?

Answer: Many experts tend to think they know what the markets will be doing next. While we’ve tools that can help us in doing this, we can never be sure, because we don’t really know the future. There are many people who’re overconfident when they get hold of a new trading system or an analytical tool. They think they’re wizards, but they’re not.

There are traders who talk with overconfidence, behaving as though they were in total control of the markets. But when they face the real battle, they flounder.

One woman was trained by a popular Forex trading institute in her country. After the training, she still experienced frustrating challenges. When she met me, she told me that the guys who trained her didn’t know anything about trading.

The woman was wrong (though I didn’t tell her so). The guys who trained her have lots of knowledge… only that they can’t predict the future. I also don’t know anything because I can’t predict the future.

That means official/senior/market analysts don’t know the future. What we do is best called educated guesses. Trading experts don’t know the future, yet they make profits. It’s better then to let our clients/trainees know that we don’t know what the price will do next, but we can survive without knowing that. That’s better than giving people a false impression that we can accurately predict the markets: this would make them hate us when they find out we can’t.

For instance, experts agree that it’s better to select trending instruments when considering a trade. An instrument that’s trending ought to continue doing so. Choosing a trendless instrument may be suicidal (unless one’s a scalper) because both buyers and sellers might lose. A trendless market may continue to be trendless. But one may enter a trending market and it would then start consolidating; whereas a consolidating market might start a serious trending movement. In reality we don’t know what may happen next.

3 QUESTIONS TRADERS WOULD LIKE TO ASK RIGHT NOW
Like trading skeptics, many who’ve suffered losses or tragedy are unable to find satisfying answers to the questions below. Some become apathetic towards trading. Others mayn’t entirely quit trading, but they become inactive.

It’s not that those who’re apathetic or inactive are completely unfamiliar with secrets of trading success. On the contrary, their experience with the so-called experts is often what pushes them towards apathy. Many liars who pose as successful traders, they feel, have failed to answer tough questions in trading. What kind of questions? Paradoxically, they’re always the same that people who claim to be experts struggle with.

Many members of the public believe that the fact that over 90% of traders lose proves that success in impossible. Others, though, who have come to understand why over 90% of traders lose, are confident that success is possible.

Why is trading so difficult?

Answer: As it’s being mentioned in the subheading, “PEOPLE AREN’T WHAT THEY CLAIM TO BE,” what makes trading appear very difficult is the fact that the market can never be predicted. When we predict, we’re sometimes wrong or right. However, having an impression that the market can be predicted is the single most important reason why most traders end of getting frustrated. No matter the analytical method you use (Monte Carlo, Neural Networks, Horology, robots, Gann, news, Ichimoku, etc), you can’t predict the future. Your frustration will continue as long as you think you can predict the market. Once you admit you can’t do this, your frustration ends, because you’ve aligned yourself with the reality in the market.

What benefit can I get from trading?

Answer: Freedom. Freedom is everything. You master your financial destiny, growing richer and richer gradually. Very soon, you’ll realize that trading is the best vehicle for financial freedom; plus the greatest game on earth. Sadly, many people don’t believe this fact.

How can I experience permanent success in the markets?

Answer: You’ll attain permanent success once you devise a way to make money in the market without being able to predict the market – without knowing what the market will do next. This kind of strategy isn’t hard to devise. You’ll then see each new trade as a potential loser until you’re proven otherwise. This mindset would enable you to activate stops and use a small position size. You’ll know trading is simply a game of probability and with a good RRR, the odds would eventually come in you favor. This is what’s called positive expectancy. With this simple approach, you’ll no longer see trading as difficult. More importantly, you’ll attain permanent success without the ability to know the future, which begins from your mind.

If you don’t know those who’re successful in trading, there are many of them and I know some of them.

This piece is ended by the quote below:

“Your trading system has a set of rules. When you don’t follow the rules, it’s a mistake. And if you don’t have rules, then everything you are doing is a mistake. Even with rules, most traders probably trade somewhere below 80% efficiency. When you make two mistakes in ten trades, you are at 80% efficiency and that may be a low enough level to destroy the positive expectancy of a system. Below 80% will turn a winning system into a losing system. Rather than acknowledge their mistakes, however, most people just blame the markets or decide their system is no good. But until you acknowledge your mistakes, you are not being responsible for them and you cannot fix them.” – Dr. Van K. Tharp (Source: Vantharp.com)

Copyright: Tallinex.com

Weekly Trading Forecasts on Major Pairs (February 22 - 26, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This pair went slightly downwards on Monday and moved sideways for the rest of the week. A closer look at the chart revealed a consolidation to the downside, which threatens the recent bullish bias. For the bias not to turn bearish, bulls must prevent bears from pushing price below the support line at 1.1000. In case bulls succeed in doing this, we may see the price going upwards this week, thereby ending the threat to the recent bullish bias.

USDCHF
Dominant bias: Bearish
USDCHF went up 170 pips last week, but it met a strong opposition at the resistance level of 0.9950. Price was unable to go above that resistance level in spite of several attempts to breach it. This week, the movement of USDCHF would be largely determined by whatever happens to EURUSD. USDCHF may experience great difficulty in breaking the resistance level at 1.0000 to the upside (an event that could end the current bearish bias in the market). Failure to do this could reinforce the bearish bias, which is currently under threat from bulls.

GBPUSD
Dominant bias: Neutral
From the high of Monday, Cable dropped by 280 pips, reaching the accumulation territory at 1.4250 on Wednesday, February 17, 2016. The accumulation territory at 1.4250 has proven to be a recalcitrant barrier to bears, for the price could not go below it in spite of forays into it, and this has forced Cable into a neutral phase. The market ended on Friday with a strong upward bounce, which might be a short selling opportunity unless the distribution territories at 1.4550 and 1.4600 are overcome.

USDJPY
Dominant bias: Bearish
This market rallied 120 pips on Monday – resulting in a better entry price for sellers. From the high of Tuesday (114.87), price dropped by 240 pips, to close at 112.64 on Friday. There is a clean Bearish Confirmation Pattern in the market, which indicates the possibility of price going further south, reaching the demand levels at 111.50 and 111.00. The chances of JPY pairs rallying significantly this month are now slim.


EURJPY
Dominant bias: Bearish
In the context of a downtrend, EURJPY cross went upwards on Monday and started coming down from the high of Tuesday. From Tuesday, price came down gradually by 300 pips, reaching the demand zone at 125.00 on Friday. There is an ongoing bearish signal on this cross, which may enable it to move further southward by at least, 200 pips this week, reaching the demand zones at 124.50 and 123.50. Only a sudden weakness in the Yen would cause this cross to skyrocket.

This forecast is concluded with the quote below:

“As you fully understand “your trading game” and know how the markets are functioning, you greatly increase your probability of success. Most of all, you will have “fun” trading — independent of winning or losing. If you do not enjoy yourself trading, then you are probably not trading the right systems – ones that fit you.” - Gabriel Grammatidis

Copyright: Tallinex.com

Andreas Halvorsen: One of the Most Efficient Fund Managers

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 3

“Since 2003, I have traded the financial markets with my own capital using self-developed, quant-based strategies. The more I have learned and observed as a full time trader, educator and participant in the trading industry, the more motivated I have become to correct the gross and dangerous misinformation bombarding today’s active investors.” – Scott Andrews

Name: Andreas Halvorsen
Year of birth: About 1961
Nationality: Norwegian/American
Occupation: Hedge fund executive

ONE OF THE BEST PERFORMING TRADERS
Andreas was born in Norway. He graduated from the Norwegian Naval Academy and became a leader of a Norwegian SEAL team. He also earned a BA in 1986, from Williams College and later earned his MBA from Stanford University School of Business in 1990.

He served under Julian Robertson (the father of hedge funds), working at Tiger Fund Management and attaining a senior position. After leaving Tiger, he co-founded Viking Global Investors LP in 1999; a hugely successful funds management firm. Andreas is often referred to as one of the best fund managers in the world.

In the year 2012, the firm was managing about $16.7 billion. Later the firm was managing more than $30 billion – a testimony to strong performances and reliability of the firm. Andreas has been mentioned as one of the highest earning fund managers, placing 11th in Forbes' 2012 rankings and 9th in 2015, according to Institutional Investor's Alpha.

As of October 2015, Andreas was worth $2.8 billion. He’s married to Diane: They’ve three children and live in Darien, Connecticut, USA.

What You Need to Know:
1. Certain persons joined trading companies that once performed very well and later went kaput. As a result of that, they swore to never have anything to do with trading again. Andreas is different. He once worked at Tiger Fund Management, which performed very well in the first several years and later suffered heavy losses. Andreas left Tiger and co-founded another trading firm - Viking Global Investors – which is now hugely successful. If you were Andreas, you’d possibly never trade again after witnessing what happened to Tiger. However, you might now covet his $2.8 billion USD net worth. Any lesson? No matter what your trading experience is, NEVER give up!

2. The Viking Global Equities made roughly 23% returns in 2013. Like Andreas, there are super/master traders. In the year 2014, a smaller of the firm’s funds generated about 38.4%. There are talented traders. There are profitable traders. There are many of them in this world. They faced the same challenges you’re now facing. You can overcome your trading challenges; just as they did. You can become a super/master trader, talented and profitable trader. Trading mastery is already within you.

3. Since its start in 1999, Viking Global Investors has made a profit of about 22% per annum, but not without occasional losses. According to one source, the fund was making losses from September 2001 to March 2002, when the portfolio was down 12%. Was that another reason to quit trading? No! The fund has been hugely successful overall. You can have some losing weeks, months (even years), but you should be successful overall. Transitory losses should never discourage you.

Conclusion: When you risk about 3% – 8% of your account per trade, thus facing the consequences. Experience will later force you to reduce the risk per trade. Later, you’d even reduce the risk further. Experience is the best teacher.

The quote below ends this article:

“You can always make money back when you’ve lost it.” – James Altucher

Weekly Trading Forecasts on Major Pairs (February 15 - 19, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
EURUSD moved upwards by 230 pips last week, topping at the resistance line of 1.1350, before the current bearish correction. From that resistance line, price got corrected by 100 pips while the bias on the market remains bullish. There is a need for price to go above that resistance line this week, aiming for other resistance lines at 1.1400 and 1.1450. Otherwise, bears might overcome bulls and manage to push price further south.

USDCHF
Dominant bias: Bearish
This pair has proven to be one of the strongest trending among the majors. Price dropped by roughly 260 pips last week, moving briefly below the support level at 0.9700. Then price turned upwards, making a shallow bullish effort. The bullish effort cannot render the current bearish bias invalid unless price goes above the resistance levels at 0.9900 and 1.0000, which is not an easy task, given the ongoing bearish sentiment in the market. USDCHF is suffering from all-round attacks, for EURUSD is up, causing USDCHF to remain under pressure, and CHF itself is strong (see CHF pairs). Eventually, the shallow bullish effort in the market might turn out to be another shallow short-selling opportunity.

GBPUSD
Dominant bias: Bullish
Cable merely consolidated throughout last week, in the context of a medium-term uptrend. The presence of bulls is still visible in the market, though it is possible for them to be subdued by bears any time. A movement above the distribution territories at 1.4600 and 1.4650 would reinforce the current bullish effort, while a movement below the accumulation territories at 1.4350 and 1.4300 would invalidate it.

USDJPY
Dominant bias: Bearish
The price has gone down by 600 pips this week, and it has gone down by 1000 pips since January 29, 2016. The demand level at 111.50 was tried before the upward bounce that happened on Friday, February 12, 2016. The upward bounce is another opportunity to go short while the bearish trend lasts. The bias on JPY pairs is currently bearish, although that does not rule out the possibility of them rallying before the end of this month.
.

EURJPY
Dominant bias: Bearish
This cross experienced a large pullback last week, going down by 450 pips and reaching the demand zone at 126.00. Thus time around the stamina in EUR has been unable to cause it to withstand the assault from JPY (as it is true of some other EUR pairs). It is logical to assume further southerly movement in the market, due to a strong Bearish Confirmation Pattern in the market. Along the way, upward bounces might be ignored as long as it is clear that bears are in control.

This forecast is concluded with the quote below:

“Almost all of my trading is mechanical — 100% based on rules I have tested and found to be valid. I tend to ignore news of the day, fundamental information and adverse “big picture” scenarios because these do not impact my systems greatly. Sometimes, these factors affect my results in the short term, but over the long term, the systems have a positive expectancy.” - Kevin J. Davey

Why Victorious Traders, Investors, and Funds Managers Are Paid Extremely Huge Amounts of Money

What you have to understand is that you're competing in an environment full of very talented, smart and highly motivated competitors. The guy on the other side of the trade, is as eager to make money as you are. This forces you to constantly improve your trading and adapt quickly. If and when you stop, your competition won’t, and they’ll quickly be ahead of you. - Marco Mayer (source: Tradingeducators.com)

Trading is one of the toughest and the most difficult professions in the world, as well as one of the most rewarding. The public hate trading because they feel it’s too tough for them.

“I am convinced that fewer than one percent of all beginners go on to be and remain successful in day trading,” says Dr. Brett N. Steenbarger. What about swing trading, position trading and investing? The statistics may improve considerably, but they’re still less than 10% of all market speculators.

Members of the public shy away from trading, even discouraging others who’re doing it, since they think it’s a gamble. Then why not abandon trading and look for a job that guarantees a paycheck every week or every month?

Recently, in one Asian country, 2.3 million candidates apply for just 368 low-level government jobs. The jobs pay 243 USD (before taxes) a month and will involve making tea and passing files between government offices. Requirements for the 368 jobs include having finished primary school and being able to ride a bike. The applicants included at least 255 people with doctorates and 150,000 graduates.

In certain lands, many a university graduates receive less than 50 USD per month (less than $600 per annum).

In a country where population is exploding, with more and more houses being built and new sites being cleared to make way for housing, but fewer and fewer industries are established, what would you expect? In a country where millions of people go to tertiary institutions, graduating en masse every year, but fewer and fewer gainful jobs are created, what would you expect?

The uncertainties in the world are now greater than the uncertainties in trading: Companies downsizing constantly, governments owing salaries, incomes getting slashed and slashed, the fear of a sudden dismissal, economic changes that have adverse effects on small and big businesses, etc. We’re living in hard times.

Many people are poor because they’re looking for easy, guaranteed ways, to earn income. They don’t want to take risks, and therefore, they choose trade, jobs, professions that make them confortable. Millions of people rush into such jobs, thereby driving the income lower and lower because the supply of personnel, workers, self-employed people, and so on, is higher than the demand.

In such situation, the only means of survival is to reduce what you’re paid more and more. Nonetheless, when you’ve a career that too many people think they can’t do because it’s difficult, you’ve the chance to demand a high pay. People won’t have a choice than to pay – for demand for experts is very high and supply is extremely low.

If people are doing easy jobs, thinking they must be well paid, employers/customers/clients will immediately get people who can do the jobs/services better for lower pay.

The easier a job is, the more people will rush into it, and the lower the pay will be. That’s the reasons why most people who work for themselves and others remain poor. Take petty trading, commercial tricycle riding, office assistants, etc., for examples. What other examples can you think of? I was poor when I was working as a private teacher.

The more difficult a job is, the fewer people will go into it, and the higher the pay will be. That’s the reason why those who can do those mentally challenging jobs are highly paid. Take programming, astronomy, surgery, oil rig engineering, etc., for examples. What other examples can you think of? I became financially free when I found a way to trade Forex victoriously.

I know how much suffering going on around me. People working hard, struggling every day, yet they’re poor. I know those who’ve worked for decades, but have nothing to show for their many years of labor, save for economic survival. I could’ve easily fallen into that lot if not for trading which the Providence used to rescue me. I could be telling the same story like many others who struggle, but remain poor.

In the year 2013, the 10th highest paid trader went home with $600 million. Which company in the world would ever pay you such amount of money per year ($50 million per month)? The 10th highest paid trader didn’t get that huge income in one year because he’s a collection of PhDs, but because he can do what billions of people can’t do – consistently successful trading.

Pareto’s Law and Trading
The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes; says Wikipedia

Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population.

More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:

20% of the input creates 80% of the result
20% of the workers produce 80% of the result
20% of the customers create 80% of the revenue
20% of the bugs cause 80% of the crashes
20% of the features cause 80% of the usage
And on and on… - By Kalid Azad (Source: Betterexplained.com)

Can it be said that 20% of the traders make 80% of the profits?

One source says that there are over 50 million active Forex traders worldwide, and the number is rapidly increasing. But 1, 2, 3, and 5% or maximum of 10 % make money.

When talking about the number one source of profits for traders, Dima Vonko, mentions that, our fellow traders, specifically those who are less knowledgeable, less experienced or simply too slow on the draw, can be a source of profit for us. Of course, the traders are out to make money, but many of them will also lose money. Here we can profit by applying better trading skills and better quality trading systems.

Retail Traders Also Have Their Advantages
There are always interesting events that move the markets; which are major sources of concern to investors/traders. In May/June 2015, investors were most concerned about geopolitical crises. In June/July, they were worried mostly about the Eurozone breakdown. In August, they were most afraid of China recession. That was what was happening at the time of writing this article.

Traders like you and me also have certain advantages over institutional traders. We can go long and short at will, since we’re not bound as institutional traders are; although our freedom to do what we like also has a serious demerit. We can open our small positions without being noticed, unlike big players. We can move into or out of the markets faster than institutional traders

Seeing Beyond Loss
In TRADER’ magazine (August/September 2015 edition, pages 30 - 36) Mark Minervini, who’s now a legendary trader, shares his success story. When Mark began trading in the early 1980s, he endured a six-year period when he did not make any money in stocks. In fact, he had a net loss. It was not until 1989 that he began to achieve meaningful success. What kept him going? Unconditional persistence! An investment in knowledge, which takes time to acquire, is an investment in yourself, but it requires persistence.

Profits are only a by-product of a good trading plan. Try to become permanently successful. Try to be smarter than millions of traders in the world. You may ask: “How do I predict the markets accurately?” That question can’t help you. If you ask, “How can I make money without being above to predict the markets?” Then you’ll enjoy more success and popularity than you could’ve imagined, making huge amounts of money.

Trading is the best and the greatest tool for financial freedom. It’s better than any multi-level marketing systems. Please mention the highest paid multi-level marketer in the world, telling me her/his annual income. I’ll then tell you the annual income of the 20th highest paid trader in the world.

When you’re able to prove your expertise with a small account, you can be given a bigger account. If you show your expertise with the bigger account, you’ll be given another far bigger account. Your portfolios would keep on growing until you become extremely rich. You try yourself as much as possible to attain enduring success as a trader. Ultimately, you’ll find it difficult to believe how rich you’ll have become.

Conclusion: Andy Jordan, also at Tradingeducators.com, says it is difficult to recuperate from being "chewed up and spit out" by the markets. There are students of the markets who are determined enough, who will not accept defeat, and who started over again from the beginning of studying the basics, of sorting out and discarding wrong mindsets, in order to face the realities of the markets, and who learned self-control and how to run their trading in a businesslike manner. In the process, they developed stronger character as well as better skills, and emerged winners in the "game of life" and in the world of trading.

This piece is ended with the quote below:

"What is the one sentence summary of how you change the world? Always work hard on something uncomfortably exciting!" – Larry Page

Monthly Technical Reviews on Gold and Silver (February 2016)

GOLD (XAUUSD)
Dominant Bias: Bearish
Gold started a persistent bullish journey a few weeks ago, and this is strong enough to threaten the current bearish bias on the market. Should the bullish journey persist for the next few days, that would lead to a new clean “buy” signal, leading to a Bullish Confirmation Pattern in the market. There are possibilities of pullbacks this month, but as soon as price goes above the resistance level at 1155.00, then bearish positions would no longer make sense. There are support levels at 1110.50 and 1080.50, which might prevent possible pullbacks from being significant.

SILVER (XAGUSD)
Dominant Bias: Bearish
Unlike Gold, Silver has not assumed a noteworthy rally. Instead, price has been consolidating within the last few weeks, and there is nothing to pose a threat to the extant bearish outlook on the market. On Silver, there is bound to be a rise in momentum this month, which might take place this week or next. Price might drop heavily or rise sharply. However, a significant rally would be more likely in case Gold continues its journey upwards. That means a bullish Gold might act as a catalyst for bullish Silver, since both are positively correlated in most cases. Should Gold experience a serious pullback, then Silver would fall further south. On the downside, price could test the support levels at 13.6100 and 14.0000. On the upside, bulls might push the price towards the resistance levels at 15.1000 and 15.5000.

Weekly Trading Forecasts on Major Pairs (February 8 - 12, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
This pair was engaged in a smooth bullish run last week, moving upwards 420 pips before the bearish retracement that was seen on Friday (February 5, 2016). The bearish retracement could be taken as a sale in the context of an uptrend, for the uptrend might continue this week. As long as price is above the support line at 1.0950, the bullish bias cannot be threatened. The resistance lines at 1.1250 and 1.1300 are the potential targets for bulls this week.

USDCHF
Dominant bias: Bearish
Owing to the perceived weakness in USD, USDCHF dropped 340 pips last week, ending the recent bullish outlook on the market. The support level at 0.9900 was tried, before the current upward bounce, which is, however, shallow. That support level at 0.9900 could be retried again and get breached to the downside, as price possibly attains the support levels at 0.9850 and 0.9800 this week. It must be noted that the market is now below the psychological level at 1.0000; so it might be difficult for bulls to effect any bullish changes that would take the price above that level. In case the psychological level at 1.0000 is broken to the upside, then a rally that would eventually threaten the bearish bias might begin.

GBPUSD
Dominant bias: Bullish
From the low of January 29, 2016, Cable rose steeply, testing the distribution territory at 1.4650 on Thursday, February 4, 2016. From that distribution territory, price has come down by 200 pips, on the following day. That correction is a proof of the vulnerability of the ongoing strength in Sterling, for the outlook on GBP pairs remains bearish for this month. While GBP is strong versus USD, it is weak against certain other currencies, for instance, GBPJPY, GBPCHF, EURGBP, etc. The market might resume a rally this week, albeit further bearish correction of another 200 pips would put an end to the current bullish outlook.

USDJPY
Dominant bias: Bearish
The sudden and unexpected weakness of this currency trading instrument was partly due to the weakness of USD. On January 29, 2016, price touched the supply level at 121.50 and dropped 500 pips in the following week, which has resulted in an undisputed Bearish Confirmation Pattern in the market. Long trades are not currently logical until there is a clear indication that bulls have taken control again. Right now, bears are the ones in control.

EURJPY
Dominant bias: Bullish
Unlike other JPY pairs (e.g. NZDJPY, AUDJPY, etc.), EURJPY did not come down significantly because of the strength in EUR itself. Last week, price came down only by 160 pips – a movement that was not strong enough to invalidate the bullish bias on the market. Only a movement below the demand zone at 128.50 would put an end to the extant bullish bias, as price is expected to rally this week or next. It would be mentioned that JPY pairs still have the possibility of rallying this month.

This forecast is concluded with the quote below:

“As I have matured as a trader I have become better at dealing with the emotions that come with trading. That has come simply from exposure, self-awareness and time.” – Rachel Shasha

Bernard Baruch: One of History’s Greatest Market Participants

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 2

“The main purpose of the stock market is to make fools of as many men as possible.”

Name: Bernard Baruch
Date of birth: August 19, 1870
Nationality: American
Occupation: Investor, financier, philanthropist, and statesman

THE LONE WOLF OF WALL STREET
Bernard was born in South Carolina, to a Jewish family. His family later moved to New York and settled there. Bernard went to City College of New York, and then got married to Annie Griffin. They were blessed with 3 children.

He started his trading/investment career as a broker and partner at A.A. Housman & Company. He then bought a seat at NYSE, for $434,000 (inflation adjusted). His trades in the sugar market were successful and as a result of that, he became rich as young as 30 years of age.

He was an independent broker who did not affiliate himself with other financial houses – hence the alias “The Lone Wolf of Wall Street.” By 1910, he was already a force to reckon with in the markets.

After his success in the markets, Bernard got involved in philanthropy, politics and statesmanship, devoting his time toward advising U.S. Presidents Woodrow Wilson and Franklin D. Roosevelt on economic and other important matters of national interests. Because of his generosity, philanthropy, wisdom, love for his country and fellow citizens, Bernard left enduring legacy. He was awarded some honors.

Bernard Baruch went to eternal rest on June 20, 1965, at a ripe age of 94.

What You Need to Know:
1. Also known as the Lone Wolf of Wall Street, Bernard was able to amass huge wealth in the markets all by himself. He wasn’t helped by anyone. Nobody recommended anything to him. I’m not preaching against getting help (even that’s encouraged) or recommendations: I just want you to know that you can become successful also through your own personal effort. In an interview, Dr. Brett N. Steenbarger recently said that winning speculators are their own coaches. Never follow the crowd, especially in doing what you know to be irrational and illogical.

2. Don’t blame anybody for your mistakes and failures. This world is full of many people who goof, and yet look for things and others to blame. For example, failing traders blame other traders, coaches, brokers and the markets for their failure, which is not normal. You can’t make any progress until you see yourself as the source of your problem and the source of your solution. One American author says: “If it’s going to be, it’s up to me.” If it’s going to be, it’s up to you (not anyone else). You’re the architect of your success or failure in the market.

3. Bernard advised against buying at the bottom and selling at the top. He said that couldn’t be done except by liars. Please follow the trend, which may sometimes go further than you can imagine.

4. A speculator is a man who observes the future, and acts before it occurs. When you make money, definitely you’re not losing money. Winning traders thrive under pressure. They grow in uncertainties and become mature more and more in the constant challenges that market throws at them.

5. Bernard knew when to exit the market – he knew when to sell his shares. Once he got this signal, he sold as soon as possible. He said when good news about the market hits the front page of the New York Times, sell. When the public begins to feel encouraged by a price movement, then it’s time to sell.

6. Bernard said: “Take the obvious, add a cupful of brains, a generous pinch of imagination, a bucketful of courage and daring, stir well and bring to a boil.” How can traders interpret this relevant statement?

7. In certain cases, the fundamentals in the market are mere noises; published figures or what a CEO of a company says. A market is either moving sideways or upwards or downwards. It might be choppy, volatile or quiet. Just look at what the price is doing and respect it, not what news says or what a CEO or a chairman says.

Conclusion: I’ve found that listening to other traders and helping them understand good trading principles makes me genuinely happy. There is much beauty and reward in the markets, but you can only benefit from those good things when you become a profitable trader.

This article is ended by a quote from Bernard. The quote at the top of this article is also from him:

“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”

Trading Signals for JPY Pairs (February 1 - 22, 2016)

USDJPY = Buy

AUDJPY = Buy

CADJPY = Buy

CHFJPY = Buy

EURJPY = Buy

GBPJPY = Buy

NZDJPY = Buy

NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 lots would be used. The breakeven stop is set after about 70-pip profit is made. A trailing stop of 100 pips is set after over 170 pips have been gained. You need to use your technical analysis to know when to enter, since you may want to trade a pair only after your entry criteria have been met.

Disclaimer: Trading signals are provided for information purposes only and shouldn’t be construed as trading advice.

Weekly Trading Forecasts on Major Pairs (February 1 - 5, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Neutral
This pair went up from the support line at 1.0800, reaching the resistance line at 1.0950. From that resistance line, price went down 120 pips. There is a neutral bias on this pair, which would remain in force until price goes below the support line at 1.0800 or above the resistance line at 1.0950. For a few weeks, that resistance line at 1.0950 has been refusing bullish movement above it, and therefore it is more likely that price would go further downwards this week, breaking below the support line at 1.0800, owing to a bearish outlook on EUR pairs for this week and for most of February 2016.

USDCHF
Dominant bias: Bullish
Last week, USDCHF moved sideways from Monday to Thursday, in the context of an uptrend, but broke upwards on Friday, reinforcing the existing uptrend. The resistance level at 1.0250 has already been tried, and there is a high possibility that price would go above that resistance level, targeting another resistance levels at 1.0300 and 1.0350. This would be easier especially in the wake of a weaker EURUSD.

GBPUSD
Dominant bias: Bearish
As it is always mentioned, long trades will usually be traps on GBPUSD until it is clearly confirmed that the bearish bias is completely over. Bulls made commendable effort to effect a rally last week – all of which proved futile with what happened on Friday, January 29, 2016 (a 200-pip pullback). The outlook on GBP, and therefore, GBP pairs is bearish for the month of February, even beyond the month. Bullish signals in this market should be ignored, because GBP would face challenges at many fronts, including the strengthening of AUD and NZD in this month.

USDJPY
Dominant bias: Bullish
This currency trading instrument moved in a tight range from Monday to Thursday, but there was a significant bullish breakout early Friday. This bullish breakout took price upwards by 300 pips, testing the supply level at 121.50; plus the rally would continue this week. There were strong bullish breakouts also on other JPY pairs: a beginning of protracted bullish movements on those pairs. Yes, bullish movements were already expected to start on JPY pairs around the end of January, and as a result of this, traders are advised to shun bearish signals on JPY pairs in February, because the outlook on them is bullish for the month.

EURJPY
Dominant bias: Bullish
This cross had already started moving upwards before the massive bullish breakout happened on Friday. Altogether, price went upwards by 400 pips last week, reaching the supply zone at 132.00. Here, pullbacks should be seen as opportunities to go long, because JPY pairs have high probabilities of trending further upwards in the month of February 2016. Currencies like EUR and GBP, which would be weak against some other currencies, would be seen going up against JPY in February. EURJPY could go further upwards by at least, 200 pips this week

This forecast is concluded with the quote below:

“One major aspect of Forex I really value is that trends are easy to find. Trading a trending chart has a big edge for two main reasons. First, trends generate good follow-through. In many instances they go much further than anyone might have expected.” – Gabriel Grammatidis

Are You Disappointed in Trading?

“One of the keys to a trader’s success was not the results of a trade but rather how a trader reacted to the results of a trade.” – Dan Gamza

Why me? Why did this happen to me? Those are some of the questions that disturb losing traders. After a series of losses, some of them develop hatred for trading. Suffering that results from negative trades, drawdowns and margin calls can make people easily disappointed in trading.

Nonetheless, no matter how bad your trading is, it could’ve been worse. No matter how bad things are, there are still some reasons to be thankful, if you can think deep.

There are events that move the markets and which professionals focus on. These events often are filled with uncertainties, bringing profits and losses to people. Just some months ago, Greece was a hot topic, and speculators were mulling opening positions on the seemingly overextended markets, but some had serious misgivings. At times, the stakes may be higher than the rewards.

There Is Really Nothing Like Losses
There is really nothing like losses, for what brings losses to some people is what brings profits to others. The market moves up or down – not losing up or down. When you buy EURUSD and it goes up, you win (but a seller will lose). When you sell AUDJPY and it goes up, you lose (but a buyer will win). When you enter a direction in the market and it moves seriously in your favor, all those who go in that direction will make money, provided there are no wide differences in their entry prices.

What you call losses is what brings profits to some people. What you call profits is what brings losses to some people.

People Don’t Learn Their Lessons
Despite well-meaning efforts to solve the problem of loss, there are millions of traders around the world who’re still losing because of dangerous trading habits. People don’t learn their lessons.

During a funeral process, many attendees will be remorseful, thinking about the brevity of life and futility of wickedness, anxiety, love of money and so on. But once the funeral is done, you’ll see many of those attendees living their lives as if they’d not die again.

Too many traders lost in the past because they didn’t use stop loss on live and simulated accounts. When they come back to trading, you’ll see them using the same trading approaches that led to their downfall the last time, namely, high lot sizes and no stop loss. People don’t learn their lessons.

Traders who test new trading ideas on demos don’t use stops; and I wonder how that idea can survive on live accounts in the long haul, because they may apply it to a demo account once they’ve been lucky enough to gather some gains.

A Way Out?
After many years of grappling with the markets, traders who complained in the past may later show their gratitude; and for the fact that the markets cannot be blamed for what happen to them (though we may feel disappointed sometimes). There are days when they become sad, and they complain when they think of their seeming helplessness. Nonetheless, they’d have come to understand that the markets don’t set out to punish individuals.

Interacting with good traders as well as reading about super successful ones would’ve made them stronger psychologically and kept their spirits up.

Reflecting on a possibility of a risk-free trading approach reassures those who’re currently losing. Good trading coaches care about them, knowing full well that the end of their struggles is in sight. Focusing on such hope can give a trader the fortitude to endure certain negativity now.

Conclusion: Are you disappointed in trading? Well those who currently make loads of money from trading were once disappointed at some time in their careers. Those whose marriage is now successful were at one time, frustrated by their spouse. But these people, for example, profitable traders (as well as happily married persons), looked for solutions to their problems and apply those solutions faithfully. That doesn’t mean they’re luckier or better than others: that means they’re able to overcome the causes of frustrations and disappointment in their careers.

This article is ended with the quote below:

“Markets are people. So beating them asks for insight in what they are doing. And, perhaps more importantly, how they feel, because that will direct their future actions and, in the end, what markets will do.” – Dirk Vandycke

Weekly Trading Forecasts on Major Pairs (January 25 - 29, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
As it was prognosticated, EURUSD did not experience a significant movement last week, though price moved lower. The lower movement has resulted in a bearish signal, since there is now a Bearish Confirmation Pattern in the market. There are bearish targets at the support lines of 1.0750 and 1.0700, which would be reached as price continues meandering its way further south. EURUSD, and of course other EUR pairs, could become weaker. Generally, very strong movements should be seen on most (major) pairs and crosses this week and next week.

USDCHF
Dominant bias: Bullish
This currency trading instrument moved higher last week (by around 140 pips), resulting in a bullish outlook on it. The previously adamant resistance level at 1.0100, which is now a support level, was broken to the upside. Price is currently above the support level at 1.0150, threatening to go further north. The outlook on USD is now bullish, which should reflect on other USD pairs, save USDCAD. This is also true of CAD pairs, for other currencies are weak against CAD, which should continue for some time.

GBPUSD
Dominant bias: Bearish
Cable reached a low of 1.4078 and a high of 1.4362 last week, making a bullish effort in the context of a downtrend. The bias remains bearish, unless price goes above the distribution territory 1.4500, which is a daunting task for bulls because they would be faced with a strengthening USD. Therefore, Cable might experience some pullbacks this week.

USDJPY
Dominant bias: Bearish
This pair tested the demand level at 116.00 and bounced upwards by roughly 280 pips, closing at 118.77 on Friday. This rally was strong enough to become a threat to the recent bearish bias – which would be rendered useless once the supply level at 119.50 is overcome. The possibility of further rally is high, owing to the expected strength in USD. There would be strong volatility on JPY pair from this week till the end of the month.

EURJPY
Dominant bias: Bearish
EURJPY consolidated throughout last week. Even bearish breakouts were quickly countered by bullish corrections. Bulls and bears are presently engaged in a deadlock struggle that will come to an end soon, for this cross will start a directional movement this week, though a rally might be difficult as long as EUR is weak. High volatility would be witnessed.

This forecast is concluded with the quote below:

“Learning the business of trading is basically no different from learning any other business. Winning means learning major guidelines and concepts that you repeat so often in your own behavior that they become good habits. These good habits then become automatic behavior patterns…” - Andy Jordan

Peter Thiel: A Foremost Investor

WHAT YOU NEED TO KNOW ABOUT MASTER TRADERS – PART 1[i]

“One of the secrets few know and fewer implement when it comes to trading success is that you have to really care about doing well. These days, I see a lot of traders not caring enough, not prioritizing learning about trading, and making pathetic weak-willed excuses.” [/i]– Chris Tate

Name: Peter Thiel
Date of birth: October 11, 1967
Nationality: German, American
Occupation: Businessman and investor

A RARE GENIUS
Peter was born in Germany, but his parents took him along to the United States, where they settled. He studied philosophy at Stanford University, earning a B.A. (1989). He also got his J.D. from Stanford Law School (1992). He was very good at playing chess, even to the point of being rated a Chess Master.

With Elon Musk and Max Levchin, he co-founded Paypal. He co-founded Palantir, serving as its chairman. He was the first outside investor in Facebook, acquiring a stake which was worth 10.2% in 2004 for $500,000. Therefore he’s a member of the board of directors.

He presides over a hedge fund named Clarium Capital. The fund was worth $700 million. He’s also a managing partner in Founders Fund, a firm which was worth $2 billion. He also co-founded, chairs Mithril Capital Management and Valar Ventures.

In the year 2011, his position on Forbes 400 was 293rd, being worth $1.5 billion. As of August 2015, he was worth $3.3 billion.

Peter is interested in other intriguing issues, causes and futuristic ideas, participating in some of them, funding some of them and advocating some of them. He’s won awards, honors, and an honorary degree from Universidad Francisco Marroquin.

What You Need to Know:
1. Peter really has a Midas touch. Are you successful in other areas of life? You might want to try trading and/or investing. Perhaps you success in other fields might be translated to success in trading as well. As you can see, Peter Thiel has been successful in most of the ventures he took, including investing. He correctly forecasted the weakness of USD in the year 2003, plus forecasting that the strength in USD and energy would be strong in the year 2005.

2. You can’t be right always. Peter wasn’t always right. His hedge fund, Clarium, dropped in value within years 2008 – 2011. This was largely due to incorrect bets. However, you should be successful overall, just as Peter is.

3. In trading, courage is more important than genius. Brilliant traders are rare. No wonder there are so many losers.

4. Peter says monopoly is the condition of every successful business. This can be applied to trading. You just got to develop your own unique trading approach and stick with it. That unique trading approach is your edge, which will give you breakthrough that many millions of traders can only dream of.

5. Nobody cares about you unless you become a successful trader with years of a nice track record. Consistent profitability is an elusive thing, and once you can achieve that, more and more people would be interested in you, because you’ll appear unique. Without this, you’ll just be like many other millions of people who’re failures.

6. Don’t be afraid to fly in the face of a conventional trading wisdom. You trading approach is good as long as it makes money, no matter how odd it seems.

7. Always make sure that in a quarter or on annual basis, you make average profits that are bigger than average losses. Your few winners ought to compensate for your numerous losers.

Conclusion: When problems and challenges arise in your trading career, do you feel overwhelmed? I no longer feel helpless and without hope. Today, I can truly say I’m happy as a trader, although previously I never imagined it possible, I now feel that I can help others.

This piece ends with a quote from Peter:

“The most contrarian thing of all is not to oppose the crowd but to think for yourself.”

Weekly Trading Forecasts on Major Pairs (January 18 - 22, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Neutral
This pair experienced short-term upswings and downswings, with no directional movements in the medium term. Just like last week, there may not be very strong movements this week, though there could be significant movements around the end of this month (which could happen on other major pairs as well). There are support lines at 1.0850 and 1.0800. There are also resistance lines at 1.1000 and 1.1050. Price must go above these resistance lines or support lines, paving way for a strong movement expected around the end of this month. It is likely that EUR would rally, which would be visible on all EUR pairs.

USDCHF
Dominant bias: Neutral
Whatever happens on USDCHF would be determined by what happens to EUR. The bias is now neutral, owing to the recent erratic movements in the market. There are support levels at 0.9950 and 0.9900. There are also resistance levels at 1.0050 and 1.0100; and so it is expected that price would go above these resistance levels or the support levels. A movement to the downside is more likely because the resistance level at 1.0100 is now a major barrier to bulls. That resistance level has successfully thwarted rally attempts within the last two weeks.

GBPUSD
Dominant bias: Bearish
This currency trading instrument came down by, at least, 250 pips last week, almost testing the accumulation territory at 1.4250. Price has come down by 950 pips since the middle of December 2015. There is a very strong bearish bias on the market – it does not make sense to go long until there is a bullish retracement of about 300 pips. That is the only condition that can threaten the existing bearish bias; otherwise rallies would offer new short-selling opportunities.

USDJPY
Dominant bias: Bearish
USDJPY consolidated last week, though it showed determination to continue going downwards. Price has come down by close to 600 pips since December 18, 2015, testing the demand level at 116.50 on January 15, 2016. There is a Bearish Confirmation Pattern in the market and it is possible that the market would continue its southward journey, just as certain JPY pairs have done.

EURJPY
Dominant bias: Bearish
This cross, which fell sharply in the first week of this year, simply moved sideways last week. The outlook on the cross is bearish. However, the bearish outlook might be overturned by events affecting the Euro. In case the Euro gains lots of stamina, a rally attempt might be witnessed on this cross, contrary to what other JPY pairs might be doing.

This forecast is concluded with the quote below:

“An ideal trading methodology should allow for limited risks and unlimited gains.” – Anonymous

Reactions from Traders (2015)

New Year is here! Year 2015 was the most difficult year I’ve experienced in my trading career. For example, years 2007 to 2014 were easy for those who cut their losses, ran their profits and employed sensible position sizing methods.

In the year 2015, the months of January, February, March, April and December were good, while the rest of the months were extremely difficult. Most market wizards posted losses for the year, though their investors know that it’s normal to have a losing year, for a winning year is in the offing. Certain market wizards announced profits – big or small. Many unknown private traders also made decent profits last year, and I personally witnessed some accounts histories. Needless to say, majority of traders didn’t’ make profits last year.

It’s difficult to keep one’s chin up when the going is tough, but that was what I did last year. The going was tough for several months, but I nearly met my annual target. I’m thankful for what the market gave me, though it was a bit below my annual target. I’m convinced that this year would be better than last year. So, be prepared to take advantage of great movements in the markets.


Reactions from Traders (2015)
As you know, I’ve been writing helpful trading articles to help traders in the areas of strategies development, trading insights and mindset, risk control, money management, traders’ bios, market analyses, etc. Some people found my articles very useful for their trading. Nevertheless, certain people were busy leaving negative comments, discouraging others and using put-downs while they’d little to do in helping traders who desperately needed help. I’d like to remind you that there’ll be people who’ll criticize you no matter what you do.

What someone finds useless can be indispensable to other people.

Below are some of the comments from those who read my articles last year. The comments were taken from those who sent me personal messages, not from those who simply replied to my posts.


Reactions from Traders (2015)

“Wow! Amazing articles. Thank you so much.” – V. R.

“Dear Analyst, I was very interested to read your excellent article on this forum… Thank you very much for sharing your very interesting article. Yours sincerely.” - I. M.


“Thank you so much for … the article.” – T. T.

“I read your post, really good job and I agree.” – H. Rob

“Hi Analyst. I enjoyed your article of June 2015.” – K. J.


“Over all I am sorry to say I was disappointed with some contents of the articles, as I was expecting to learn some useful concrete facts on trading strategies/methods. I found the content of the 'Lessons', is too generalized and found little to apply to my own day to day trading.
The theme of not giving up when things have not gone well provided so degree of solace but this alone is not a technique to improve one’s trading strategy and I would have liked to have had more information on how these super traders have achieved their success, i.e. what markets, instruments, stop loss use, market entry/exit points. Perhaps you could recommend further reading to such needs. Yours sincerely.” - P. B.


“Hi Analyst, I appreciate your prompt reply and thanks for the links you've included. Yes please give us articles on trading strategies. Such publications would be probably sought after by newbies trying to make headway as traders. Good luck” – L. C.


“Hi my name is Danny. I read your articles in some magazines recently and was very excited about your articles. I'm interested in learning more about your systems. I'm just in importance of a position size and I'm looking to do a swing trade using the daily charts. Are there any tips or advice you can give me? I too am a student of van Tharp institute! Thank you.” – D. C.


“Hi Analyst. This was very informative! I had been contemplating about opening up my own trading accounts because I am interested in speculation but I realized things are not the same ( I was trading in a friends' account and she had been losing a lot) . So she wanted me to trade for her and my winning has been 70% but I feel like I am gambling, luck eventually runs out. There is no finesse to it and even though you try your technical analysis no one can predict a price movement in the next 30 seconds. Thanks for the read! Warm regards.” – Z. A.


“Hi Mr. Analyst. I am a newbie in Forex and follow your analysis quite regularly and find it very educative. May I kindly request you to send me some analyses for the major currency pairs which shall enable me to perform better in my trades? I will be ever obliged if I can be in your group.” – H. D.

Conclusion
You can’t get an answer unless you ask a question. I really appreciate those who sent me messages, both positive and negative. Traders who are commended for their creativity and perseverance rather than simply for their talents come to realize a vital truth – that acquiring trading skills require patience and effort. They know they put in the work needed to achieve desired result… Even when they come up short, they don’t view themselves as failures, but as learners. You can’t win all the battles in the markets, but it’s great to know you’ve fought in good faith.

I assure you that I’m going to post superb trading articles this year, which would really help you achieve your aim to become a persistently winning trader. Just watch out for them.

May you have a fulfilled and prosperous trading year.

I’d like to conclude this article with the quote below:

“I don’t have any daily/weekly/monthly goals anymore. All I look at is what I achieved over a year. Why? Simply because I realized it’s almost impossible to reach a monthly goal on a persistent basis. The markets might give you a hard time for months, and then you make it all within a month or two. It’s better to not care for short-term results, which is difficult but possible, if you keep the long-term in perspective.” – Marco Mayer

Hello mikketech and MeandSum. Thank you for your answers. They're really helpful and I'll make attempts to act on them. Kind regards...

Weekly Trading Forecasts on Major Pairs (January 11 - 15, 2016)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
From Monday till Wednesday, this pair went south. However, it started a bullish journey from Thursday till the close of the market on Friday. Bulls would continue making attempts to push the price further north, but their action would not jeopardize the extant bearish outlook unless price goes above the resistance lines at 1.0000 and 1.0050. A close below the support line at 1.0800 would reinforce the extant bearish outlook.

USDCHF
Dominant bias: Bullish
USD/CHF went upwards from Monday till Wednesday, testing the resistance level at 1.0100. In spite of desperate effort, price was unable to break the resistance level to the upside. As a result of its inability to break the resistance level to the upside, price pulled back by at least 150 pips. There is a risk of further pullback, especially before the end of this week or early next week. The probability of CHF becoming very strong is possible this month, and therefore, we may see this effect on USDCHF (plus other CHF pairs). It cannot be said precisely how long the effect would last if it does happen. This is simply a seasonal tendency on CHF pairs, which have been happening for many years; only that the event of last January was unprecedented.

GBPUSD
Dominant bias: Bearish
Cable came down by 250 pips last week. Since December 14, 2015, price has come down 700 pips. There is a clean Bearish Confirmation Pattern in the market, and there is a high probability that the bearish movement would continue. The accumulation territories at 1.4000 and 1.3950 could be tested this week. Any rallies we see here would be transient; as the outlook on GBP pairs remain bearish for this week.

USDJPY
Dominant bias: Bearish
This is a bear market, which started a few weeks ago. Price went down 250 pips last week (and it has come down by 500 pips from the middle of December 2015). There is a lot of trading activity around the demand level at 117.50, which stands a good chance of being breached to the downside. Additional targets for this week are the demand levels at 117.00 and 116.50.

EURJPY
Dominant bias: Bearish
The EURJPY cross plunged by 350 pips last week, reaching the demand zone at 127.00. From that demand zone, price bounced upwards in the context of a downtrend, testing the supply level at 129.00. This is merely a bullish effort in the context of a downtrend, for the cross cannot go upwards significantly as long as the Yen has lots of stamina in it. Price could retest the demand zones at 127.50 and 127.00.

This forecast is concluded with the quote below:

“Be ready to take advantage of very lucrative opportunities. Traders can make the most money when volatility is high.” – Joe Ross

Hi Forumers,

Please I’m having an issue with my blog (…..com). The Google Adsense application on it was running for more than 4 years without any problem.

Nevertheless, I recently saw it in my Dashboard that I needed to apply for Adsense to show on the blog and track my records, which meant that the Adsense ads that were running on the website were just doing so for nothing.

I called a tech guy who helped me look into the issue, but we couldn’t solve any problem. I’m at loss as to what to do…

I now think that the best solution to this problem is to contact Google people, especially the ones in charge of Adsense and Adwords, so that they can help me check my blog and fix whatever errors they see there, while giving me further advice where necessary.

Please I need your answers, I don’t know the EMAIL ADDRESS(ES) I need to contact so that this kind of issue would be solved once and for all. Please who can provide me with relevant email address(es) to contact, so that their attention can be drawn to the problem, for a possible solution.

You objective and precise answers would be forever appreciated.

Many thanks!

2016 Technical Reviews on Gold and Silver

GOLD (XAUUSD)
Long-term bias: Bearish
In 2015, Gold topped at 1307.35 and later reached a low of 1046.21. Gold was engaged in perpetual and persistent downtrend, trapping bulls with short-term bullish movements. It is completely irrational to open long trades in the market, because the bears have really made their presence felt for a long time. Years 2013, 2014 and 2015 were all strongly bearish, which explains one of the reasons why the Thanksgiving effects did not take place in those 3 years. Since this is a market that currently favors sellers, it would be rational to seek short trades only (using upward bounces opportunities to sell short, especially when bearish candles form following such upward bounces).

SILVER (XAGUSD)
Long-term bias: Bearish
Just like its Gold counterpart, Silver has been in a persistent downtrend since the year 2013. In this kind of market, the best trading approach is to ignore bullish signals and capitalize on bearish signals. Bullish signals could also be taken as chances to enter short at better prices, which offer lower risk as long as the long-term bias remains bearish. Last year, price reached a high of 18.4500 and a low of 13.6100 – a low that could be breached to the downside this year. In this market, it is recommended that rallies should be viewed with suspicion until there is a “Golden Cross,” which is a situation in which price closes above the EMA 200 on the daily chart, trending upwards. This is when it can be safely said that the bearish trend is over.

Yearly Trading Forecasts on Major Pairs (2016)

Here’s the market outlook for the year:

EURUSD
Long-term bias: Bearish
EURUSD was generally bearish in 2015, reaching a low of 1.0462 and a high of 1.1712. The last week of that year was bearish, and the bearishness could continue till February 2016. From February to April, we would witness serious bullish effort, which would be eased at the end of April, because bears would come in again and make their presence felt in the market from April to June. However, a new lease of bullish journey would be resumed in the market around October/November, which would last till the end of the year (it would even go beyond the year, into 2017, ending around February 2017). The ongoing bias is now bearish and this should be honored.

USDCHF
Long-term bias: Bullish
Since the large pullback that was seen in January 2015, USDCHF has been making perpetual effort to go upwards. Along the way, there were occasional instances of medium-term bearish phases in the market. The bearish phases would last for few weeks or months, only for price to recover and go up higher. In 2016, there could be intermittent phases of weakness in January. Then the market would most likely show further weakness in the months of February to April; but we can witness a smooth rally in the months of April to June. Right now, price is making attempts to go up, and it could reach the resistance levels at 1.0100 and 1.0150 in the first full week of January.

GBPUSD
Long-term bias: Bearish
The short-term, the medium-term, and the long-term biases on GBPUSD are all bearish. Price reached a low of 1.4565 and a high of 1.5929 in the year 2015. Since June 2015, price has come down by 1100 pips, closing at 1.4732 on December 31, 2015. The year 2014 saw far more predictable movements on GBPUSD than the year 2015 (as it was true of other major pairs and crosses). This year might be different. At the present, the bias on the GBPUSD (and other GBP pairs) is bearish and this would continue till March 2016. The market could rally between March and May of this year. It could even continue to rally in June and July; but not without visible gravity attempts from the bears. Following this, there might not be another serious weakness in the market until December 2016.

USDJPY
Long-term bias: Bearish
On this pair, bears won a pyrrhic victory in the year 2015. The struggle between bears and bulls were so intense that the market phases for that year were mostly consolidations and fake-out phases. The year 2014 was even better than the year 2015. The current bias is bearish, but bulls might gain upper hands before the end of January; plus their victory could last till June (though not with occasional pullbacks along the way). The market might go through some phases of weakness within July and September. Nevertheless, the bulls would push the price higher around October – an action that could last till December.

EURJPY
Long-term bias: Bearish
Last year, the EURJPY cross was characterized by high volatility, choppy movements and deadly struggles between bulls and bears. The extant weakness might continue till February, when price would be strengthened till April 2016. The best action to take in the market would be to seek shorting opportunities between April and September. Additionally, the market might rally from September to November; while we would witness another phases of choppy and volatile movements in December 2016.

This forecast is concluded with the quote below:

“You will have to stick to your process as much as you can even when things do not go as expected. If you can build such a process and manage to follow it 100 per cent of the time, then you will be trading like a professional.” – Pierre Veyret

James Tisch: Moving Ahead of Warren Buffet

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 20

“Books are great mentors, but where else can you learn? By standing on the shoulders of giants. When it comes to making money, here is the million dollar secret...follow someone smarter than you...” – James Altucher

Name: James Tisch
Date of birth: January 2, 1953
Nationality: American
Occupation: Investor and businessman

Career
James, who’s of Jewish ethnicity, was born in Southampton, New York, USA.
His dad was co-chair of Loews Corporation, plus his brother Preston Tisch. He went to Cornell University and later got his MBA from the Wharton School of the University of Pennsylvania.

James has held prestigious positions, including having a seat in the directorate of the Federal Reserve Bank of New York. He’s been the CEO of Loews Corporation since 1999.

One thing special about him is that, in terms of percentage, his investments have outperformed Warren Buffet’s.

He’s married to Merryl and blessed with 3 children. James has a mansion which is about 8,000 square feet in Southampton, New York. James is an avid philanthropist, and a supporter of certain politicians. He and his wife donated $40 million to found a cancer research institute, named after them.

Insights:
1. Transparency matters in business success. If you claim you’re good at trading/investing, then you must make your audited track records known.

2. Transparency leads to credibility. Credibility leads to more and more success. Simply look for ways to make your career credible. Success would then be very easy.

3. James has been investing for many years. He’s really a veteran of the markets. Successful trading needs a commitment of a lifetime – just like a successful marriage. Commitment is what you need to realize your dreams, not mere interest.

4. If you’re good enough, you can outperform the bigwigs. This means you can gain better than they can, in terms of percentage, though their portfolios may be bigger than yours. You can make 40% per annum on a $100,000 portfolio: whereas someone who’s managing $10 million could only make 6% per annum. Can you see the difference? As mentioned earlier, one thing special about James is that, in terms of percentage, his investments have outperformed Warren Buffet’s. He may not be as rich as Warren, but he outperforms him in terms of percentage gains. Since the year 2000, James has grown by almost 400% while Warren has grown by only 100%.

Conclusion: Do you think you’re a god who can predict the markets, Can you predict football matches with utmost certainty, even before the matches start. If you could do that, would you do that for other types of sports? Can you predict exactly when you will die or when a healthy person will die? Why do you still think future can be predicted? Why do you still think you can predict the markets? People get frustrated only because they think they can predict the markets (but they can’t, in reality). When you agree that it’s unrealistic to think that you can predict the market with whatever tools you may have, then you’ll find a solution to your trading problems. You’ll develop a system that enables you to make money without predicting the markets. James Tisch was able to attain good performances because he’s formulas that make him victorious while not being able to know the future.

This article is ended by the quote below:

“Event-driven trading can be very lucrative.” – Dr. Adrian Manz


Copyright: Tallinex.com

Trading Signals for GBP Pairs (December 31 – February 29, 2016)

GBPAUD = Sell

GBPUSD = Sell

EURGBP = Buy

GBPJPY = Sell

GBPCHF = Sell

GBPCAD = Sell

GBPNZD = Sell


NB: Every trade could be entered with a stop loss of 100 pips and a take profit of 200 pips. Only 0.5% is risked per trade. With an account balance of $20,000, a position size of 0.1 lots would be used. The breakeven stop is set after about 70-pip profit is made. A trailing stop of 100 pips is set after over 170 pips have been gained. You need to use your technical analysis to know when to enter, since you may want to trade a pair only after your entry criteria have been met.


Disclaimer: Trading signals are provided for information purposes only and shouldn’t be construed as trading advice.

Weekly Trading Forecasts on Major Pairs (December 28 - 31, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
EURUSD moved upwards 100 pips last week, still showing determination to go further upwards. The market would experience some equilibrium movement this week, owing to thin activities in the markets, but possibilities of surprise movements cannot be ruled out (especially on some other EUR pairs like EURAUD, EURNZD, etc.). Bulls might target the resistance lines at 1.1000 and 1.1050 this week.

USDCHF
Dominant bias: Bearish
This pair did not make any significant movement last week, and it is more likely that the sideways movement would continue this week; which could make the bias on the market turn neutral. There are support levels at 0.9850 and 0.9800. On the other hand, there are resistance levels at 0.9950 and 1.0000. It is expected that the price would oscillate between these support and resistance levels for the rest of this year – breaking them to the upside or to the downside within the first week of January 2016.

GBPUSD
Dominant bias: Bearish
From Monday to Tuesday, Cable dropped by 100 pips, to rise by 110 pips from Wednesday and Thursday. The current price action in the market could be rightly called a rally in the context of a downtrend, because the bearish outlook cannot be invalidated as long as price is under the distribution territory 1.5050. A very strong bearish movement would likely resume on GBP pairs on the first week of January 2016.

USDJPY
Dominant bias: Bearish
This currency trading instrument performed a steady southwards movement last week. From just under the supply level at 121.50, price was able to move below the supply level at 120.50, to close at 120.27. There is a strong Bearish Confirmation Pattern in the market, which would enable this currency instrument to dive further by 100 pips this week or next week. At the present, long trades do not make much sense in this market.

EURJPY
Dominant bias: Bearish
This cross moved upwards 100 pips in the first few days of last week, before it went down by 100 pips, reaching the demand zone at 131.50. This action supported the extant bearish bias on the market. At this juncture, the movement of this cross would be dictated by the events surrounding the Euro, which means that we might see a rally in case the Euro is strengthened further.

This forecast is concluded with the quote below:

“Money is perpetual in the markets and the objective is to keep as much as you can when it passes through your hands.” – Alpha7 (Trading Academy)

What Super Traders Don’t Want you to Know – Review

CANDID BOOKREVIEW

Succeeding as a Trader after Learning the Necessary Facts and Skills
This book profiles 22 renowned super traders from around the world. Great traders who know what it takes to be successful in the markets. In this follow up to his previous book: “Learn From the Generals of the Markets,” the author gives an overview of their careers and explains what lessons can be drawn from their success.

The book emphasizes on the kind of friends you keep will have impact on your life, and of course, on your trading career. When you hang out with those who hate trading, those who have been floored by the markets and have sworn not to have anything to do with the markets
again, those who are afraid of the challenges the markets offer, those whose job is to discourage you from attaining your goals in life, you cannot become successful in the markets.

Trading is a wonderful experience that can transform lives. We need to surround ourselves with successful traders or at least, read about them, plus the principles that can be learned from them. The super traders featured in this book will inspire you and reveal the principles behind
their success. For you to eventually reach a position of a super trader (one who makes profits consistently and effortlessly), you definitely need more than strategies. There are certain timeless truths, principles, mindsets and beliefs that super traders cannot do without. Since using
the best strategy without the essential requirements would not improve any statistics; the catholicity of those seamless requirements cannot be overemphasized.

Super Traders with Enviable Achievements
Kenneth Fisher – a billionaire trader who is featured in the book – is an exceptional trader who was introduced to the trading world by a market legend, Philip Fisher, who was his dad. This shows that when we teach young people the art of trading, we prepare them for financial freedom
as early as possible. James Chanos, another highly profitable trader featured in the book, testifies to this fact by saying: “Life intrudes – as when you get older you end up with more responsibilities and your ability to take risk diminishes. If you are 25 and have a great idea and you fail, no one is going to hold it against you, and future you will be able to take more financial and career risk. If it does not work, you still have your whole life ahead of you.” You will also come across some celebrity traders like Dan Loeb (the Kanye West of Wall Street) and Ray
Dalio (the Steve Jobs of investing).

More interestingly, the book features some female super traders like a high earning hedge fund manager, Leda Braga; an influential female trader, Maria Boyazny; a world trading champion, Victoria Grimsley; and a happy market player, Toni Turner. The author advises that women should never underestimate their right to become a trader, including their limitless potential to become financially free. It is very sad that some people still underestimate women when it comes to online trading. It is unfair to underestimate women in the trading world because there is no level of achievement that cannot be attained by them. In fact, female traders have been a blessing to the trading world. In addition, they are a source of inspiration and encouragement to us.

The Inevitable Trading Experiences
According to the author, the gallivanting neophyte will pass through two phases of experiences. The first phase is when she/he loses money no matter what she/he does. This is a phase where the majority quit trading, and not many people go beyond that phase. The second phase is when one begins to make money easily. These are the people that the public call “market wizards,” “super traders,” “pros,” “expert speculators,” “gurus,” “witches,” “mad geniuses,” et cetera. The public think something is special about them, but these people know that there is nothing special about them. What makes the difference is that they decided to continue fighting for success at the stage that most others quit. This book will definitely be of interest to those who are determined to become super traders.

Adapted from TRADERS’ Book Review, June/July 2015 (pages 60 - 61)

“What Super Traders Don’t Want You to Know” is available right now for the Kindle at the flash sale price of just 99p. This essential guide could start you on the path to becoming a super trader.



NB: To get the almost free book, please visit:

What Super Traders Don’t Want You To Know: Advfnbooks.com/books/supertraders/index.html

Weekly Trading Forecasts on Major Pairs (December 21 - 25, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
Although the dominant bias on this pair is bullish, the bias is seriously threatened. After testing the resistance line at 1.1050, the price went down by roughly 250 pips, almost reaching the support line at 1.0800. Based on the bearish expectation on EUR (and EUR pairs) for the rest of this month, it is likely that EURUSD would go further south by 100 pips this week. In case this happens, the bias on the pair would turn bearish.

USDCHF
Dominant bias: Bearish
After bottoming at the support level of 0.9800, the USD/CHF has been making a noticeable bullish attempts in the context of a downtrend. The price reached the resistance level at 0.9950 on Thursday, and then consolidated till the end of the week. At this junction the direction of the USD/CHF would be determined by what happens to EUR. There would be mixed signals on all USD pairs, for the US dollars would be weak against some currencies as well as strong against some currencies.

GBPUSD
Dominant bias: Bearish
What happened on Cable last week has resulted in a “sell’’ signal, in solidarity with our bearish expectation on GBP pairs. Cable went south by 300 pips to test the accumulation territory at 1.4900. This has resulted in a Bearish Confirmation Pattern in the market, and it is likely that the southward movement would continue for the rest of this month. Therefore, any rallies that are seen should be approached as short-selling opportunities.

USDJPY
Dominant bias: Bearish
This volatile currency trading instrument swung wildly last week. Price tested the demand level at 120.50, and then rose sharply to reach the supply level at 123.50 (a movement of 300 pips). After the supply level was tested, price fell by 200 pips on Friday, due to the fundamental events affecting the Yen, which gave strength to the Yen. The current bias on USD/JPY is bearish, and this should be respected as it long as it lasts.

EURJPY
Dominant bias: Bearish
This market traded sideways from Monday till Thursday; and experienced a bearish breakout on Friday. The weakness in the market, coupled with its inability to trend higher, has made the outlook on the market become bearish. As EUR is weakened further, EUR/JPY might trend further south. There is a need for a serious weakening in the Yen before this bearish movement can be reversed.

This forecast is concluded with the quote below:

“Quality of trades matter, but a trading career does not depend on one trade, it is rather the sum of all trades. Acknowledging that a few losing trades cannot hurt me released me from anxious trading.” - Christiaan van der Meer

Bill Miller: One of the Greatest Money Managers

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 19

“Just as picking up a five iron does not make you Tiger Woods, opening a brokerage account and sitting in front of a computer screen does not make you Peter Lynch or Warren Buffett. That is something you must work for, and it takes time and practice. What is important is that you learn how to practice correctly.” – Mark Minervini

Name: Bill Miller
Year of birth: 1950
Nationality: American
Occupation: Portfolios manager

Career
Bill Miller went to Washington and Lee University, graduating in 1972 (BSc Economics). Following that, he worked as a military intelligence officer, also pursuing graduate studies in the Ph.D. program at the Johns Hopkins University.

He was a treasurer of the J.E. Baker Company, a major manufacturer of products for the steel and cement industries. In 1981, he started working at Legg Mason. He was designated a CFA in 1986.

Bill’s fund increased from $750,000,000 in 1990 to more than $20,000,000,000 in 2006.
In 2002, Janet Lowe wrote a book about him, titled "The Man Who Beats The S&P: Investing With Bill Miller."

Bill performed so well that he and his team got numerous praises for their achievements and uniqueness of trading approaches. According to Wikipedia, he was ranked among the top 30 most influential people in investing when he was named a member of the "Power 30" by SmartMoney. He was also named by Money magazine as "the Greatest Money Manager of the 1990's" and named Morningstar's 1998 "Domestic Equity Manager of the Year." In 1999, he was selected as the "Fund Manager of the Decade" by Morningstar.com. Also in 1999, Barron's named him to its All-Century Investment Team and BusinessWeek called him one of the "Heroes of Value Investing."

Bill is currently the portfolio manager of the Legg Mason Opportunity Trust (Mutual fund: LMOPX) mutual funds, run by Miller through Legg Mason subsidiary LMM. Formerly he’s the chairman and chief investment officer at of Legg Mason Capital Management, now a part of ClearBridge.

Insights
1. It’s quite possible to outperform the markets for a long period of time. Bill Miller beat the S&P 500 index for 15 consecutive years (1991 - 2005). This is one of the longest winning streaks of a trading career. Constantly making market beating returns is considered to be very unlikely according to the efficient market hypothesis, but it’s possible. So in your career, you can defy the conventional theory and rise beyond obstacles.

2. Information simply shows what’s happened while value shows what may happen. It’ll be in your best interest to think about the Big Picture.

3. Bill says certainty belongs to mathematics, not to markets, and anyone who awaits clarity, visibility, or the diminution of uncertainty pays a high price for a chimera… It’s the nature of financial markets to be subject to sharp price fluctuations, to be buffeted by events, and often to be emotionally trying. Successful investing involves the disciplined and patient execution of a long-term strategy, especially when it’s emotionally difficult. That’s usually the time the opportunities are the greatest.

4. Most money managers take positions as they swing to their opposites. Those swings can have wide arcs, and unsustainable trends can sometimes persist beyond the ability of one to endure. This explains why speculators sell their positions in over-extended bear markets, for they can’t continue enduring the pain of losing. When bull markets become over-extended, speculators are glad to go in fully, thinking that the bullish trend would continue in spite of the fact that things look overbought.

5. Flying in the face of conventional trading wisdom, Bill explains what value investing really means to him: “We are value investors because we are persuaded of the logic of buying shares of businesses when others want to sell them, and we understand that lower prices today mean higher future rates of return, and high prices today mean lower future rates of return.”

6. The real secrets behind Bill’s super performance (which is very difficult to copy) is that he spent many years studying independent super achievers, and along the way he's become one of the super achievers.

Conclusion: Louise Bedford of Tradinggame.com.au once said that you’d better start seeking out people who are making a lot more money than you are. You will naturally rise to the occasion and start moving forward. Your thinking will change. Your habits will change. Traders who make a million plus per year think differently and act differently to those making 100K per year. The fact is, if your mates are telling you 100K per year is fantastic, but your goal is to get to 500K a year... then you’d better find another group. There are those who imagine the future; there are those who create the future. Permanent victory is easier when the mission is clear. Here, we’re dedicated to making our trading career a success story.

This piece is ended with quotes from Bill:

"The market does reflect the available information, as the professors tell us. But just as the funhouse mirrors don't always accurately reflect your weight, the markets don't always accurately reflect that information. Usually they are too pessimistic when it's bad, and too optimistic when it's good."

"What we try to do is take advantage of errors others make, usually because they are too short-term oriented, or they react to dramatic events, or they overestimate the impact of events, and so on."

Weekly Trading Forecasts on Major Pairs (December 14 - 18, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
EURUSD has been able to maintain the bullish breakout it performed on December 3, 2015. Last week, price moved further upwards by 170 pips, closing above the support line at 1.0950. There are resistance lines at 1.1000 and 1.1050, which could be tested as the bullish journey continues. However, there is a strong possibility that EURUSD would experience a vivid pullback this week or next week.

USDCHF
Dominant bias: Bearish
Since November 30, 2015, this pair has trended downwards by almost 500 pips. The bias is bearish, and it would be difficult for the pair to trend seriously upwards now (in spite of the fact that USD could be strengthened against some other currencies), due to the stamina in the Euro and the possibility of the Swiss Franc amassing strength. The support levels at 0.9800 and 0.9750 stand chances of being tested. The support level at 0.9800 was almost tested last week.

GBPUSD
Dominant bias: Bullish
This currency trading instrument first trended lower on Monday and Tuesday – only for further bearish movement to be rejected as price assumed a smooth rally. Since Tuesday, price has gone upwards by 250 pips, leading to a Bullish Confirmation Pattern in the market. The possibility of further bullish movement is not downplayed, but it should be remembered that the expectation on GBP pairs remains bearish for the month of December, thus long positions on GBPUSD should be handled with caution. There could be a large pullback before the end of this month.

USDJPY
Dominant bias: Bearish
The bears were able to push USDJPY lower last week, ending the recent neutral bias on the market. Price fell by 250 pips, closing just below the supply level at 121.00. This price action has brought about a “sell” signal in the market, but the odd against the signal is the bullish expectation on JPY pairs, which could still happen anytime this month. Until there is a rally owing to the bullish expectation on JPY pairs, the “sell” signal currently in the market ought to be respected.

EURJPY
Dominant bias: Bullish
EURJPY consolidated last week, and later went downwards. The downward movement was shallow; all in the context of an uptrend. The consolidation and shallow bearish movement were considerable enough to pose a threat to the extant bullish bias. A movement of 200 pips to the downside might be the end of the bullish bias, although there is a hope for further bullish journey, and that is when JPY loses strengths significantly.

This forecast is concluded with the quote below:

“Although the price charts look the same today as they did long ago, the trade management needed constant adaptation. The markets are alive and forever changing.” – Joe Ross