₦airaland Forum

Planning Trades to Control Risk

The problem with many traders is that they have only half a plan, the easy half. They know how much profit they're willing to take, but they don't have the foggiest idea how much they're willing to lose. They're like a deer in the headlights, they just freeze and wait to get run over. Their plan for a position that goes south is, “Please God, let me out of this and I'll never do it again,” but that's wishful thinking, because if by chance the position turns around, they'll soon forget about their promises. They'll go back to thinking that they're geniuses, and they'll always do it again, which means that they're sure to get caught, and get caught bad.

I have a true story I’d like to share: It’s about a broker I knew and a Coffee trade he made. It goes like this:

I received a phone call from this guy moaning about a Coffee trade he was in. He was managing money and had all of his clients in this particular trade.

Coffee, at least at that time, was, and still can be, an illiquid and extremely volatile market, and is often best traded by people who have a genuine need to trade there. But he was in and in up to his neck in trouble. He said, “Joe! I don’t know what to do! If the Coffee goes down any more, I’m going to wipe out all of those accounts.” He told me he had been so sure the market would move up that he never even planned the amount of risk he was willing to take, and by the time he had determined where to put a protective stop, Coffee had shot past that point.

I told him I had no idea of how he could get out of his predicament, and that was an honest answer. I really did not know what he could do.

Apparently, he decided to pray! He called me back that evening and told me he had gone into the restroom, closed the door on the booth, and knelt down and implored God to get him out of the mess he was in. He promised that he would never again trade Coffee if God would just save his skin from disaster.

The following day, Coffee opened gap up, and moved to a point where he could get out at breakeven. He took the opportunity and got out. Later that day, Coffee moved even higher. Two weeks later, he was back trading it once again.

The broker had no plan for what he would do if the market moved against him. Whatever planning he did was done after, not before, entry into the market. His irresponsibility took unlimited risk with client accounts, having no idea of his exit point.

But perhaps worst of all, he was dishonest with both himself and his clients. He vowed to never trade that market again. Where were the discipline and self-control he needed to keep his promise?

How many of us do the same thing when we trade. We make mistakes, vow to never make them again, and then do the same dumb things all over again. We take risk without planning, or realizing just how much risk we are truly taking. Then the market teaches us a painful lesson. I think you would agree, markets are very good at doing that.



Author: Joe Ross

This article was reproduced with kind permission of Trading Educators.

Trading Signals for CHF Pairs (December 9 - 23, 2015)

AUDCHF = Sell

USDCHF = Sell

EURCHF = Sell

CADCHF = Sell

CHFJPY = Buy

GBPCHF = Sell

NZDCHF = 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 (0.01 lots for each $2,000). 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.

Trading Signals for AUD Pairs (December 9 - 24, 2015)

AUDJPY = Sell

AUDUSD = Sell

EURAUD = Buy

AUDCAD = Sell

AUDCHF = Sell

GBPAUD = Buy

AUDNZD = 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 7 - 11, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bullish
There was a sudden and fast bullish breakout on EURUSD, which made it go upwards 450 pips, testing the resistance line at 1.0950. The price consolidated after that, till price closed last week. The bullish breakout has abruptly overturned the recent bearish trend in the market, but a crucial question remains… Was this a false breakout? A false breakout could be as significant as you might think, but it would remain false in case it cannot be sustained. For this bullish breakout not to become a false one, we should see further bullish movement (whether fast or gradual); otherwise, another leg of southward movement would start. It has already been said that the outlook on USD is bright for December, while EUR is expected to be weak.

USDCHF
Dominant bias: Bearish
There was a surprise pullback on this pair last Thursday, as it went below several resistance levels, plus the great psychological level at 1.0000. Price nosedived by 400 pips last week, reinforcing the gradual bearish movement that started at the beginning of last week. Now the USDCHF is facing challenges from two fronts: The recent strengthening of EUR and the expected rally in CHF. Yes, CHF is expected to start gaining stamina by the end of this week, and that can last until Christmas Eve (please watch CHF pairs). This means that bulls will certainly not find it easy to push up USDCHF price.

GBPUSD
Dominant bias: Bearish
On Thursday, December 3, 2015, GBPUSD also went upward 250 pips in a positive correlation attempt with EURUSD. The distribution territory at 1.5150 was tested after price rose from the accumulation territory at 1.4900. Nevertheless, the bearish outlook on GBP pairs remains unchanged for the month of December. It can be seen that the major bias on most GBP pairs have been bearish, so, the recent upward bounces should be opportunities to go short at better prices.

USDJPY
Dominant bias: Neutral
What happened on this currency trading instrument last week was short-term upward and downward swings. The swings have not succeeded in overturning the neutral bias on the market. A movement of at least, 200 pips to the upside or to the downside is required before price could move out of this neutral zone. A movement to the upside is the most likely because the US dollar would be making some bullish effort, and because the Yen might suffer further loss of strength. The market condition is now currently great for scalpers and intraday traders.

EURJPY
Dominant bias: Bullish
As it was mentioned in the past, one of those things that could bring about a vivid rally on this cross is a vivid rally in the Euro itself. That was exactly what happened last week. From the demand zone at 130.00, price shot skywards, reaching the supply zone at 134.50 (a movement of 450 pips). Price has moved sideways since then, but further upward movement is possible because JPY pairs might move upwards this month, in certain cases.

This forecast is concluded with the quote below:

“Although strategy is important, it is not as critical as knowledge and the discipline to apply and adhere to your rules. A trader who really knows the strengths and weaknesses of his or her strategy can do significantly better than someone who knows only a little about a superior strategy. Of course, the ideal situation would be to know a lot about a great strategy. That should be your ultimate goal.” - Mark Minervini

Michael Steinhardt: Wall Street’s Greatest Trader?

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 18[b]

“The trading game is not won in the strategy one selects. The trading game is won in the mind.”[/b] – DbPhoenix (Source: Trade2win.com)

Name: Michael Steinhardt
Date of birth: December 7, 1940
Nationality: American
Occupation: Funds Manager and philanthropy

Career
Michael was born to an American Jewish family. His dad was a notorious gambler who was his son’s first client. He provided the seed money for Michael to start his investment career.

Michael Steinhardt attended the University of Pennsylvania. After graduating in 1960, he worked for a brokerage firm. He started his own hedge fund in 1967, with some partners. One source reports that his fund averaged an annualized return for its clients of 24.5%, after a 1% management fee and a "performance fee" of 15% (early in his career, later 20%) of all annual gains, realized and unrealized, nearly triple the annualized performance of the S&P 500 Index over the same timeframe.

Because of his continuous success in the markets, Michael was investigated for allegedly trying to manipulate the short-term Treasury Note market, because his firm personally made $600 million from trading Treasury. The case was settled after a fine of $70 million was paid.

His fund sustained a loss in the year 1994 but enjoyed good returns in the year 1995. This shows that even great speculators can’t always win. But unlike short-sighted speculators, they don’t quit because they know things would soon turn out in their favor.

Michael closed his fund in the year 1995 and returned the capital to his clients. He came out extremely affluent and liquid.

In the year 2004, he came out of retirement and started working for WisdomTree Investments (formerly known as Index Development Partners). He’s chairman of that company; whose worth increases by about 10% per month, with $18.3 billion under management. The company suffered some losses in the years 2007 and 2008 as a result of the credit crunch that ravaged the financial world then. Nevertheless, the company has recovered and moved ahead.

Because of his Jewish ethnicity, Michael Steinhardt loves Jewish causes, donating generously to several Jewish causes, programs and events he believes in. He also donates generously to other political, academic and humanitarian causes.

Michael was married in 1967, He’s 3 children. In the year 2001, he released an autobiography titled: “No Bull: My Life in and out of Markets.”

Insights
1. Michael mastered several markets instead of just one market. He traded stocks, currencies, bonds, and options, using small and big timeframes. He’s a trend-follower. You can also master more than one investment vehicle.

2. According to him, make all your mistakes early in life. The more tough lessons early on, the fewer errors you make later. Always make your living doing something you enjoy.

3. You need to study the markets and gather lots of information so that you can sense major shifts in the trend. You can’t know everything, however. So you need to make your trading decisions with incomplete information. You will never have all the information you need. What matters is what you do with the information you have.

4. Trust your intuition always – though that doesn’t mean you can always be right. When you’re eventually right, the thought of having made a profit would be so satisfying.

5. Before your risk your money, make sure the reward is high enough to justify the time and effort you put into the investment decision.

6. Michael Steinhardt used fundamentals when trading, though his positions were short-term. He did an enormous amount of trading, not necessarily just for profit, but also because it opens up other opportunities. He got a chance to smell a lot of things. Trading is a catalyst.

Conclusion: “There’s no way to know in advance if a business idea is a good one. For instance, Google started around 1996 but didn’t make a dime of money until around 2001,” says James Altucher. He also says… don’t be afraid to test, fail, test, fail, try again, repeat, improve, test, fail again, and keep improving. The way to keep improving? Keep coming up with ideas for your business and for other new businesses. How true are these statements about when it comes to trading!

This piece is ended with a quote from Michael Steinhardt:

"One dollar invested with me in 1967 would have been worth $481 on the day I closed the firm in 1995, versus $19 if it had been invested in a Standard & Poor's index fund."

Trading Signals for GBP Pairs (December 2 – January 7, 2015)

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.
[b][/b]

Monthly Technical Reviews on Gold and Silver (December 2015)

GOLD (XAUUSD)
Dominant Bias: Bearish
The Thanksgiving effect did not take place last week, as Gold generally moved sideways, without any significant drop. This effect has not taken place for 3 years in a row, though that does not mean it would not take place in November 2016. The dominant bias on the market is bearish, and price might journey further south, reaching the demand levels at 1040.00, 1030.00 and 1020.00. The bearish bias would continue to be valid as long as the supply levels at 1095.00 and 1110.00 are not breached to the upside. One thing must be noted, a significant rally is not ruled out in the month of December 2015.

SILVER (XAGUSD)
Dominant Bias: Bearish
Normally, when the Thanksgiving rally did not take place on Gold, it would not take place on Silver either. Silver has been trading in a range since the last two weeks – all in the context of a strong downtrend. Further downwards movement is possible, enabling price to test the support levels at 13.5000, 13.2000 and 12.9000. Possibilities of rallies should not be downplayed, because bulls would also make determined effort to push the price upwards this month, but they would not succeed in bringing about a bullish trend on Silver unless the resistance levels at 14.9000 and 150.0000 are overcome.

Weekly Trading Forecasts on Major Pairs (November 30 – December 4, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
EURUSD only consolidated to the downside last week, in the context of a downtrend. There are resistance lines at 1.0750 and 1.0800, which could check rally attempts. There are also support lines at 1.0500 and 1.0450, which are the targets for bears, since further bearish movement is possible. Any rally attempts that happen in the market should be taken as false breakouts. It is expected that the Euro would be weak in December, and so EUR pairs would be bearish in most cases.

USDCHF
Dominant bias: Bullish
This pair managed to go upwards by an addition of 100 pips last week – in solidarity with the extant bullish bias. Since the great psychological level at 1.0000 has been breached to the upside, price has moved northward by 300 pips, testing the resistance level at 1.0300. This bullish journey has a high probability of continuing this week, for the outlook on USD is bright for the month of December (and so is the outlook on CAD).

GBPUSD
Dominant bias: Bearish
GBPUSD moved further south last week, closing below the distribution territory at 1.5050. Yes, continuous southwards movement is expected for most past the month of December, even beyond the month. On GBPUSD, any rallies that are seen this month should be taken as short-selling opportunities, because the accumulation territories at 1.4900, 1.4800 and 1.4700 would be slashed in December. In fact, GBP would be seen falling sharply against other major currencies, and so, positions that favor GBP are not recommended.

USDJPY
Dominant bias: Neutral
Since this currency trading instrument only moved sideways throughout last week, the outlook has become neutral in the near-term. A breakout is expected this week, which would either take price below the demand levels at 122.00 and 121.50; or take it above the supply levels at 123.50 and 124.00. For this movement to qualify as a serious breakout, price must close below the demand level at 121.50 or above the supply level at 124.00. Nonetheless, a breakout to the upside is much more likely, owing to the bright outlook on the US dollar.

EURJPY
Dominant bias: Bearish
It has already been said that this cross would find it difficult to rally significantly as long as EUR is weak, unless JPY itself experiences an extraordinary loss in stamina. The EURJPY cross has demonstrated its willingness to continue moving south: There is still a Bearish Confirmation Pattern in the market. On JPY pairs, we would witness pleasant volatility and predictable movements in the month of December.


This forecast is concluded with the quote below:

“Volatility and lucrative market movement should continue for many years to come, providing nearly endless opportunities for the well-prepared trader.” – Scott Andrews

An Old Veteran Trader Tells His Intriguing Story

Joe Ross is a trading legend, having made a living from the markets for – hold onto your hats – 58 years. He has been trading and investing since his first trade at the age of 14. Currently, he is a well-known and respected master trader and investor. He has survived all the ups and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits. Joe is the creator of the famous Ross Hook setup, and has set new standards for low-risk trading. He has written twelve major books and countless articles and essays about trading. All his books have become classics, and have been translated into many different languages. In addition, he runs the website Tradingeducators, teaching his trading methods and providing resources for traders. Today, we have the great opportunity of speaking with Joe Ross about his approach to the markets, insights he has gained from trading, and his vast experience from trading for more years than almost anybody else on the planet.

TRADERS´: Joe, we can only guess at the wealth of experience you gained throughout the years. But first of all, let us begin with how it all started. When did you first hear about the markets and trading, and how did you get – in a positive sense – “addicted” to it?

Ross: When I was 14 years old, it was common for mothers to stay at home and fathers to go off to work at a job or business. However, my best friend’s father was usually at home during the working day. I assumed he had some sort of medical problem – that he was a person unable to work. My friend and his family lived quite well in an upper class neighbourhood, and they owned a new car.

I remember asking, “Is your father disabled? Why is he always home?”

The answer was, “No. He is fine. He does his work in that room, the one with the glass doors.”

“Well, what does he do in there?”

“I do not know. Why do you not ask him?”

So I tapped on the glass door, and asked “What is it that you do in here?”

The answer was, “Well, if you really want to know, come in and I will show you.”

My friend’s father walked over to a closet to pull out a roll of paper, which he then unrolled onto a drafting table.

He said, “I work with this chart, and others just like it.”

All I could see were a lot of things that looked like sticks, and so I asked, “Your job is drawing sticks?”

“No, those represent stocks, not sticks.”

“What is a stock? Does a stock look like a stick?”

He began to describe what stocks were, and to tell me that the sticks represented the prices of a company’s shares of stock. I was fascinated that he could make money from what turned out to be a simple bar chart.

At that time, both of my parents worked. My parents had to suffer through the daily rush-hour traffic, which was quite heavy. However, my friend’s father was leading a much more leisurely life, and I decided right then that I would learn how to trade stocks…

To read the complete interview, please visit:

Courtesy: TRADERS’ magazine, October/November 2015, pages 104 – 105

Thanksgiving Rally on Gold and Silver: Will It Happen in the Year 2015?

Historical data reveals that Gold tends to rally during Thanksgiving celebration in the U.S. – which is held on the 4th Thursday of November of each year. Gold rally often takes place in the week in which the celebration is observed, but in order to check the validity of this trading idea, we would like to remind you of what happened in the past 12 years.

From years 2002 to 2012, Thanksgiving rally happened in each of the year, sometimes moderately and sometimes significantly, which resulted in 100% accuracy within those 10 years. Nevertheless, the Thanksgiving effect did not take place in years 2013 and 2014. With this fact at our disposal, it is interesting to know that within the last 12 years, Thanksgiving rally took place 10 times.

Now the question is: Would we witness another Thanksgiving effect in the year 2015? Since the effect did not take place in the last 2 years, some might think that it could be due to happen this year. If the effect would happen, then it is supposed to take place any time from now; but it must be before the end of this week.

The dominant bias on Gold (XAUUSD) is bearish, for price has moved south perpetually. At this juncture, there is a shallow bullish divergence, following a recent oversold condition in the market. Normally, the bullish attempt ought to be another short-selling opportunity, but a Thanksgiving effect could aid the bulls’ effort, providing that it takes place again this year.

Since Silver (XAGUSD) tends to move in a positive correlation with Gold, the Thanksgiving effect also takes place on it. If the effect did not take place on Gold, it will not also take place on Silver. The dominant bias on Silver is currently bearish – and the price formation on it is quite similar to that of Gold.

Sir John Templeton: The Greatest Global Stock Picker of 20th Century

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 17

“A main focus for us is showing traders how to reduce risk with three important tools. The first is the proper use of protective stop orders, the second is proper position size and the last, but maybe most important tool is to keep losses small.” – Sam Seiden

Name: Sir John Templeton
Date of birth: November 29, 1912
Nationality: British, Bahamian (and formerly American)
Occupation: Investor, businessman, researcher, philanthropist
Website: Templeton.org

Life and Career
Sir John Templeton was born in Winchester, Tennessee, USA. He went to Yale University (where he was an assistant business manager for campus humor magazine). He financed his own education by playing poker – with fine results. He graduated with outstanding performances. As a Rhodes Scholar, he was able to attend Oxford University, bagging an M.A. in law.

He became a billionaire by being the first person to take advantage of globally diversified mutual funds. H established Templeton Growth Fund, Ltd and was among the first persons to invest in Japan in the 1960s (some of the world's largest and most successful international investment funds).

His website reveals that he took the strategy of "buy low, sell high" to an extreme, picking nations, industries, and companies hitting rock-bottom, what he called "points of maximum pessimism." When war began in Europe in 1939, he borrowed money to buy 100 shares each in 104 companies selling at one dollar per share or less, including 34 companies that were in bankruptcy. Only four turned out to be worthless, and he turned large profits on the others.

Again, he’s noted for, during the Depression of the 1930s, buying 100 shares of each NYSE listed company which was then selling for less than $1 a share ($17 today) (104 companies, in 1939), later making many times the money back when USA industry picked up as a result of World War II (as mentioned in Wikipedia).

He’s been identified as one of the most generous philanthropists in the history of the world, donating more than $1,000,000,000 USD to charities. He relinquished his US citizenship in 1964, which enabled him to save $100 million in US income taxes when he sold his international investment fund. That money was used for philanthropy. He’d dual naturalized Bahamian and British citizenship and lived in the Bahamas.

He wrote many books, including:
A. Riches for the Mind and Spirit: John Marks Templeton's Treasury of Words to Help, Inspire, and Live By (2006)
B. Golden Nuggets (1997)
C. Buying at the Point of Maximum Pessimism: Six Value Investing Trends from China to Oil to Agriculture (2010)
D. Investing the Templeton Way: The Market Beating Strategies of Value Investing Legendary Bargain Hunter (2007)
E. Worldwide Laws of Life: 200 Eternal Spiritual Principles (1998)
And some other books

As a philanthropist, Sir John established the John Templeton Foundation, a library, a prize, and a college under the University of Oxford. He donated a sizable amount of his assets to the John Templeton Foundation, which he established in 1987. That same year, he was created a Knight Bachelor by Queen Elizabeth II for his many philanthropic accomplishments.

A Chartered Financial Analyst (CFA) charter-holder, Sir John received AIMR's first award for professional excellence in 1991. Money magazine called him "arguably the greatest global stock picker of the century." in 1999. In 1996, he was inducted into Junior Achievement US Business Hall of Fame, and in 2003, he was awarded the William E. Simon Prize for Philanthropic Leadership. He was named one of Time magazine's 100 Most Influential People in 2007.

Being a lifelong member of the Presbyterian Church, he served in various positions of high responsibilities in the church.

Sir John was married twice, blessed with children. He first got married to Judith Folk, who died of a motorbike accident in 1951. He then got married to Irene Reynolds Butler, who died in 1993.

Sir John Templeton passed on to rest on July 8, 2008, in Nassau, Bahamas, aged 95.

Insights
1. Humility is important to us as traders; and so are good mood, absence of anxiety and discipline.

2. Bull markets arise from pessimistic moods, they thrive on uncertainties and become mature on optimism and confidence, and then they die on euphoria. When the public go mad about a stock, it’s time to sell.

3. Avoid the herd mentality. What most people think, believe can’t help you. This will remain forever true in the world of trading and investing. Invest at the point of maximum pessimism. Stocks are excellent ‘buy’ candidates when people don’t want to buy them because they’re terrible. Please read Sir John’s career above again. Think about how he made his money. He invested in Japan when most people thought that idea was crazy. He sold his stocks when the public showed excessive confidence in them, when values and expectations were high. There are investment opportunities all over the world, not in the US alone. Sir John himself said: “The other boys at Yale came from wealthy families, and none of them were investing outside the United States, and I thought, 'That is very egotistical. Why be so shortsighted or near-sighted as to focus only on America? Shouldn't you be more open-minded?”’

4. If you want to have a better performance than the crowd, you must do things differently from the crowd. Since most traders lose, you need to do what most traders don’t do to be successful.

5. It’s possible to make money solely from fundamental analysis (just as it’s possible to make money solely form technical analysis). Sir John didn’t do technical systems; he based his investment decisions solely on fundamentals. Those using technical analyses only shouldn’t criticize those using fundamentals only: and vice versa. Any trading approach is good, no matter how weird, as long as it makes money.

6. Sir John - though a generous giver – never spent too much money on himself. Uninterested in consumerism, he drove his own car, never flew first class and lived year-round in the Bahamas. Being rich doesn’t necessarily mean we should live an extremely flamboyant, ostentatious, and expensive life. Warren Buffet is another good example.

7. Sir John, who was also interested in spiritual matters, said: “We are trying to persuade people that no human has yet grasped 1% of what can be known about spiritual realities. So we are encouraging people to start using the same methods of science that have been so productive in other areas, in order to discover spiritual realities.”

Conclusion: James Altucher quotes Marilyn Monroe as saying "Imperfection is beauty, madness is genius and it's better to be absolutely ridiculous than absolutely boring." He also says you should be embarrassed by what you do. Give yourself permission to be imperfect. Out of that messy soup of shame and imperfection will come art.’ No matter how many periods of discouragement you face, know that a good state of the mind, a sensible strategy and lack of expectations are what you’ll ultimately need to succeed. That’s the only method for survival in the world of uncertainties.

This article is concluded with a quote from Sir John:

“In my 45-year career as an investment counselor, humility did show me the need for worldwide diversification to reduce risk. That career did help me to become more and more humble because statistics showed that when I advised a client to buy one stock to replace another, about one-third of the time the client would have done better to ignore my advice. In other endeavors, humility about how little I know has encouraged me to listen more carefully and more wisely.”

The Beauty of Trading

“You do not need a PhD in math or physics to be successful in the stock market, just the right knowledge, a good work ethic, and discipline.” – Mark Minervini

Imagine. There’s someone who borrowed a total of $13 million to make a movie. She’s a credit officer at a big financial institution who’s helped many candidates secure loans to finance their ambitions. She herself was unable to get a loan to finance the production of her movie. In fact, it took her more than 6 years to get money to produce her movie. After going to the States to learn how to direct movies, she’d to sell all her property and borrow money from some friends and banks, before they could get the needed $13 million to finance the movie. The movie could’ve been a crashing failure, but fortunately, it was a roaring success. This courageous woman took a great risk.

Can you see the length people can go in order to achieve their dreams? The risk I take as a trader is even far less than this, with the assurance that my possibility of success is high because I’m a veteran trader.

Have you been touched by sadness in trading? You might feel that’s a problem without solution. But there’s a solution – namely, the necessary mindset and principles that are necessary for your happiness. A losing period is a terrible problem, but there are wonderful solutions to that.

If people discourage you, you could begin to think that the sacrifices you make in your trading career aren’t worthwhile or that you can’t attain permanent success. Since we’re surrounded by people that don’t understand the truth about trading, we must strive to keep our focus on the ultimate goals.

If You Can Draw a Straight Line, You Can Become a Successful Trader
This subheading was taken from one of the titles written by DbPhoenix of Trade2win.com. Contrary to what most people tend to think, you can become a permanently successful trader if you’ve a positive expectancy methodology and a winning attitude.

The road to profitability is to think positively and take steps. This doesn’t mean that your steps would often lead to what you want. There are times when you’ll feel that you can’t become a winning speculator. You can even contemplate quitting. I know this. It’s happened to me. There were times when I was discouraged by poor trading results and I thought of abandoning my trading career.

Nonetheless, I was aware of the potency of perseverance, and so, I didn’t quit. After many years of grappling with the markets, I’m eventually able to make money in the markets, surviving trendless and choppy periods and moving smoothly ahead when the markets trend strongly. I’m now able to keep my funds safe despite the vagaries of the markets. Sometimes, I make more than I even anticipate in a month.

The Providence used Forex to remove me from poverty and launch me onto my way to financial freedom.

Conclusion: Like the veterans of the markets, we don’t feel that the years we spend trying to bring our best trading self are a waste of time. Rather, we’re sure that the challenges are transitory and the rewards are permanent. I think of someone like Adam Jowett, who’s an entrepreneur and a developer who trades anywhere possible, like in the toilet, in the bus and in his garage. I know another trader who travels worldwide and trades on the go, raking in lots of money in the process.

This piece is ended by the quote below:

“Learning by trading may be the school of hard knocks, but in the end that is the best school you can attend. Just keep standing up over and over again, until you learn how to profit. Until that point, trade small and make sure to stay in the game. Make sure you will still be there once the profits arrive. And do not forget to enjoy the ride.” – Marko Graenitz

Whether I Win Or Lose A Trade…

A HEART-TO-HEART TALK

Experience is the best teacher. Negativity in trading is compared to temporary setbacks in real life: it exists so that you can become a better trader. Losing streaks are equivalent of transient disappointments that celebrities face in their careers. They simply enable you to become an efficient risk manager. There are many life examples that can be compared to trading. Do you know that you need to be determined enough to surmount any challenges you might encounter in the markes?. Uncertainty will forever be our source of wealth! Do you know that you need to believe in yourself? You’re never doomed to failure in the markets. You just need to work hard enough until you reach the stage of trading effortlessly (after your past errors have turned you into a general of the financial markets). Can you do this? Do you agree with me? If you can, your dreams would be achieved ultimately.

“You can’t change what you can’t face and you can’t face what you don’t know.” — Dr. Woody Johnson

Whether I win or lose a trade, trading is my profession and it’s what I like to do. Great people have always faced challenges and failures – yet they become great. The past failures and challenges in the markets are never a deterrent to me. Markets wizards today were novices in the past. The road to success is bumpy indeed. Nevertheless, the resplendent reward of consistent success makes the pain of the past pale into insignificance. Whenever I visualize the joy of success, the glory of breakthrough, the pleasure of financial freedom, the luxury of attainment of goals – the benefits in trading are worth the sacrifices inherent in it. I’ll continue to move on.

Whether I win or I lose a trade, I’m still a trader and I’ll be a trader for as long as I live. A balanced trading life doesn’t preclude a normal person from having fun from other aspects of life. Trading is a holistic way of life: it’s a journey to self discovery. A successful trader is someone who’s won one of the life’s most crucial battles. Successful traders worldwide, I salute you! You’re heroes and heroines indeed! You’ve discovered your true self. You’ve conquered your negative personality.

Whether I win or I lose a trade, I’ll never quit. Losers and winners are normal part of the game. I was downtrodden and hopeless on the markets in the past, but I experienced a turnaround once I got to know the tips and tricks for survival on the markets, and I’m disciplined enough to follow them. Yes a trader may say he’s surviving the markets instead of saying that he’s successful. I was lucky to come across those with the right thoughts on the markets. For two real traders, there are ninety trading charlatans. There are too many crooks out there – too many wolves in sheep’s clothing. But I can’t be deceived anymore. I’m free from all their lies and marketing traps. I’m free!

“If you ever find yourself in the middle of a bumpy road in trading or in life, stay encouraged. You will make it to the peak if you realize that the valley is NOT your permanent address. Never forget, to become a butterfly, you must want to fly so badly that you are willing to give up being a caterpillar. Growth and change always go hand-in-hand with failure and fear. If you approach failure and challenges with a positive attitude, you will see how quickly you can use failure to achieve success.” — Sam Seiden

Whether I win or lose a trade, I’m on my journey to trading mastery. Why won’t a warrior constantly pray for opportunities to show her or his prowess? I’m glad to be an experienced soldier on the battlefield of the financial markets. A soldier I am, yet I’m still learning. I’ll be a learning soldier forever, for the market is a complex thing. Trading being the second most stress-related job in the world, second only to disarming live nuclear weapons, can be approached with stress-reducing tactics. There are normal reactions to stress and these I know. Stress, just like risk, can be managed successfully.

Whether I win or lose a trade, I won’t show any infantile reactions. I can be encouraged by a good trade, but I won’t be discouraged by a bad trade. Some others may abandon this way of life, but I won’t. People’ negative thoughts and comments on trading aren’t a headache to me. The outside world is very hard – harder than we may think. I’ll let go of the past and look forward to a brighter tomorrow. Trading is my niche; I’m comfortable with it. If you invest the time in becoming an expert then the financial reward can be huge. I’ll continue following the simple time-tested winning strategies. What benefits can you derive from an excellent speculation strategy if you fail to stick to it consistently irrespective of alternative winning and losing streaks?

Whether I win or I lose a trade, I’ll be a successful trader. I’m just desperate enough for success (badly desperate) or I can say that those who’ve quit trading weren’t desperate enough for success. I’m aware that nothing in the market is ever perfect; no Golden Goose method of making money. Nevertheless, I’d like to declare, without mincing words, that the probability of survival is strong if a positive expectancy speculation method is used regularly with self-control.

Whether I win or lose a trade, trading is an exciting world – a world of unlimited opportunities. Believe it or not, I’m moving up gradually higher and so you can. The me I see is the me I’ll be. Welcome to the world of financial freedom.

Conclusion
This article is concluded with a quote from Ken Long: “(When it comes to trading mastery) You already have the mastery within you, waiting to be called forth… Mastery is walking the path, not the destination. Should you choose to walk it each and every day, what will you find?”

Weekly Trading Forecasts on Major Pairs (November 23 - 27, 2015)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Bearish
EURUSD did not make any serious directional movement last week, for what was seen was slow short-term movements to the upside and downside (and they were nothing significant). On Friday, price closed at 1.0645, highlighting the ongoing weakness in the pair. There is a possibility that the support lines at 1.0600 and 1.0550 might be tested; otherwise a strong bullish breakout could take price towards the resistance levels at 0.0700 and 0.0750.

USDCHF
Dominant bias: Bullish
This pair moved upwards 150 pips last week, reaching the resistance level at 1.0200, which is our suggested target for the last week. Nonetheless, price was unable to go above that resistance level, and this week would see whether that feat would be achieved. In case the resistance level is overcome successfully, the pair could move further upwards by another 150 pips. Failure to achieve this could result in a bearish correction, though it seems unlikely that the great support level at 1.0000 would be breached to the downside now.

GBPUSD
Dominant bias: Bearish
In the context of a downtrend, Cable made a noteworthy bullish attempt – even going temporarily above the distribution territory at 1.5300. This upwards bullish attempt later proved to be a bogus “buy” signal because bears came in and pushed price back to the level it was at beginning of last week. Further downward movement is a probability, plus the bearish bias would hold out as long as price is unable to go above the distribution territory at 1.5300, (and staying above it).

USDJPY
Dominant bias: Bullish
This market consolidated throughout last week, though there was no price action that suggested the end of the extent bullish bias. Should the consolidation continue this week without a directional bullish movement or bearish movement, then the bias on the market would turn neutral. One thing has been noted: Some pairs and exotic crosses have begun trending strongly and this could extend across the FX markets, including USDJPY.

EURJPY
Dominant bias: Bearish
This currency trading instrument went further south last week, closing below the supply zone at 131.00, just in conjunction with the ongoing weakness in the market. The southward movement last week was not a serious thing, but price could still go further south. On the other hand, the hope of bullish JPY pairs has not been lost for this month. In case the Yen loses stamina versus other currencies, EURJPY could be enabled to trend upwards.


This forecast is concluded with the quote below:

“Brilliant traders are being made today, and if you shelter without taking action, your next few years could be wasted. Leaps in skill development occur when tests are presented. Smooth sailing doesn’t prepare the sailor. It is challenges that focus the mind like no other.” – Louise Bedford

Forex Trading Versus Binary Options: Which One Is Better? (Part 2)



BINARY OPTIONS MYTHS VERSUS REALITIES

“To be successful, you must keep in mind that the only way you can continue to operate is
to protect your account from a major setback or, worse, devastation. Avoiding large losses is the single most important factor for winning big as a speculator. You cannot control how much a stock rises, but in most cases, whether you take a small loss or a big loss is entirely your choice. There is one thing we can guarantee: if you cannot learn to accept small losses, sooner or later you will take big losses. It is inevitable.” – Mark Minervini (Source: Tradersonline-mag.com)

This is just to debunk myths surrounding binary options (also called fixed odds), opening our eyes to facts.


Arguments in Favor of Binary Options
Because of its plausible simplicity, many people are attracted to binary options, thinking that Forex requires a bit of getting used to. In fact, many so-called binary options experts have documented some logical arguments in favor of binary options, and to some extent they’re partially correct.

Did you think binary options (BO) have some advantages over Forex? OK, let’s examine a few advantages the experts claim BO has and see whether the advantages aren’t in Forex.

Myth 1
BO is based on time and FX is based on price. Most FX traders overlook time factor in their trading while BO traders are time-conscious.

Reality
The market doesn’t care whether you trade it based on price or time. You may enter with a specific timeframe or a specific price in mind, but that doesn’t guarantee anything. It’ll do what it’ll do without having you in mind, and this can be in your favor or against you, whether you trade BO or FX. You timing may be wrong immediately or later or never. You timing may be correct immediately or later or never. This has little role to play in your success.

Myth 2
BO traders are forced to exit a position in a given timeframe either with win or loss. Since they’re forced to do this, they’ve an advantage over FX traders who can refuse to exit a position with win or loss because of greed and fear.

Reality
Yes novice FX traders can hold onto losing positions and abort winners, which is a bad trading approach. But disciplined traders cut their losses and give their winners some leeway. Being forced to exit at a given time doesn’t make you the richest trader; otherwise, automated systems would be second to none. Being forced to exit always at predetermined levels can’t help if your trading approach is bad and the market has an inherent negative expectancy. The discipline you enforce on yourself is much more satisfying than the discipline someone imposes on you.

BO traders suffer the disadvantage of being forced out against their will, though the most important issue is profitability, which still eludes many in spite of being forced out at expiry periods. In FX, we’re comfortable exiting at our convenient time. We may continue running a profit in order to maximize it. From March 3 – 11, 2015, I’d have gained about 500 pips in case I went long on USDCHF and I let my profit run.

Myth 3
BO helps reduce emotions because risk and reward plus expiry are all fixed and predetermined.

Reality
All traders in all financial markets aren’t immune to emotions, so BO is no exception. Permanent success in trading includes a measure of managerial control of our positions. This isn’t possible in BO, for you remain helpless once a position is open, waiting for expiry.

Considering the myths and realities above, I’d like to chip in some fallacies some BO traders carry in their heads and the facts about the fallacies.


Higher Accuracy Fallacy
According to one source, BO by its nature requires a greater than win rate as each bet is factored 70% - 90% gain against 100% loss. So this means that you need to achieve as a BO trader a win rate above 50% on average 54% - 58% to just break even.

The fact is that in the long run no one can achieve more than 50% accuracy. 80%, 90%, 75% etc. hit rates are false in the end. They might be true in the hindsight, but not in live markets. Even scalpers who risk 500 USD to gain 2 USD per trade in FX trading would seem to have high hit rates, but this would drop significantly when the hit rates are reduced.

It is fallacious to think there are computer, automated, custom, alien, astronomical, spiritual, mental, discretionary, fundamental, manual, etc. strategies that enable us to get a hit rate which is higher than 50% in future. Marketers and novice traders would tell us so, but many people have lost money with systems that are promised to carry very high accuracy because the next moment (the future) can’t be predicted. Something that sounds great in theory can fail in practice and what looks like a perfect plan can be overturned by a factor beyond our control.

BO traders are often fooled into believing they can achieve a hit rate of 70% or more permanently. You might as well do that with a toss of a coin endlessly. No matter how good or how complicated your strategy or indicator is, you’re guaranteed only 50% hit rate or less in the long run. When tossing a coin endlessly, the share between heads and tails will balance off at 50/50.

Albeit, there can be times when heads will be hit more than tails within several weeks or months (or even years). You get heads 10 times, and tails 2 times. Then heads another 8 times and tails 3 times. Then heads 9 times and tails 4 times. This would give you a false impression that you’ve a trading approach with a high accuracy, without you being aware that it’s winning streaks that cause that. On a long-term basis, things would turn the other way and you get leveled at 50% because tails would begin to be hit more than heads (like getting tails 9 times and heads 2 times).

The only way to survive is to make more money in winning periods than you lose in losing periods. Does BO allow this?


Money Management Fallacy
Money management is very important in trading any financial markets, and so BO traders claim they can get ahead with good money management methods. The issue is this: can a good money management method help you in a game in which your risks will always be higher than your rewards? How can you survive in a game in which you’ll be paid only 70 or 80 USD for each 100 USD your risk?

If you win you gain 80 USD, but if you lose, you forfeit 100 USD. Does that appeal to you? What money management can you use?

It doesn’t matter whether you risk 1% or 0.5% or 2% per trade – you simply gain less than you stake no matter what you do. Money management makes sense only when your losses are smaller than your gains, not the other way round.

Let’s say you get paid 90 USD for each 100 USD (because this is the highest the most generous broker can give you) and you place 100 trades in a year.

Let’s use 100 trials with 90% payout ratio (most brokers pay only 50% - 80% of the capital risked). Let’s say you’ve a capital of about 10,000; assuming the money management is 1% per trade. 100 x 100 = 10,000.

You win 50%
90 USD X 50 = 4,500 USD

You lose 50%
-100 USD X 50 = -5,000 USD

Is this ever logical or rational?

In FX, we can risk 50 USD per trade to gain 200 USD. With this, we can lose 75% of our trades and still make money.

-50 USD X 75 = -3,750 USD (loss)

200 USD X 25 = 5,000 USD (win)

Doesn’t this make sense to you?



The Gambler’s fallacy
The only way to enjoy longer term success in BO is to use Martingale position sizing methods, which make you double your next stake to cover the previous loss (and this doesn’t present any huge edge in itself). Please search for information on the Internet in order to know what Martingale is and how it works.

Martingale isn’t ideal for most traders because they don’t have enough money. This is a serious problem. Too many traders open accounts with too small funds, and under such circumstances, good money management can’t be practiced.

Unfortunately, those who’ve big accounts either don’t understand concepts of excellent position sizing or fail to respect the concepts.

This leads us to the Gambler’s fallacy. When you’re in a losing streak, you think your chances of winning improve with next positions, since your previous ones are losses. You think the winners are around the corner. Doubling your stakes with each loss increases your negativity and depletes your account quickly.

Maybe after 4 losing trades, which cost you 2,000 USD, you double your stake to 4,000 USD. You could have the 5th straight loss because you’re still in a losing streak.

Even if you wait for 4 losses in a row before risking 20% of your account to recover the recent losses, you still face a gambler’s problem because your next trade could be a loss, and this has nothing to do with what happened to you in the past.


The Grass Is Always Greener on the Other Side of the Fence
Some hate transport business and some love it. The risks in transport business (accidents, failures, low patronage, losses, problems with authorities, etc.) don’t deter some people from doing it because of its rewards. Some who fail at agriculture think sports is better. Some who fail at politics now want to try publishing, whereas publishing has its own challenges. Some who’ve been disillusioned with salaried jobs now want to try music industry; whereas it isn’t easy to be a celebrity or a promoter. Some who started their business has also seen that remaining profitable isn’t easy. Certain people don’t want to do anything with trading until they’re financially down, having exhausted all other alternatives. Is that the right time to become a trader?

Those who don’t make money with CFD believe spread betting is better. Those who hate shares markets consider futures markets. Those who have problems with FX think BO is better.

What do you want to do with your life? What do you want to do for a living? What can you do to put food on your table (or to feed your kids, if you’re a parent)? Life’s short: only 70 – 90 years, and some don’t even reach that age bracket. A short life is meaningful if one’s financially free and is fulfilled.


Caveat
I didn’t mean to anger BO traders. BO is good and it offers nice potentials, but people are also blinded to its pitfalls and inherent disadvantages. A business that always makes profits that are bigger than expenses will sometimes go thru turbulent times, how much more a business that makes profits that are always smaller than expenses!

If I made a business proposal to you, telling you that your income/profits from the business would be primarily, permanently less than your expenses and other costs of running the business, would you agree to the business proposal? Does that kind of business sound rational to you? Sadly, this is the permanent reality of BO.

It doesn’t make sense to run a business in which the costs will always be bigger than income.
I’ll trade BO only when brokers start giving us the possibility of getting reward that is bigger than risk per trade. However, I sense that this may put them at a demerit.

Conclusion: The most exciting thing about market is its unpredictability. The unpredictability of our trading career isn’t always thrilling, however. We devise and strategize. We make trading plans, projections and proposals about what we’d like to see happen to our portfolios, but often they’re little more than our best guesses. We’ve no idea what a day, a week, a month or even a year might bring.

“Why don’t you just play around with the idea that you can be wrong and still be successful. Being right or wrong is a meaningless invention of your mind. Instead, what if you just developed a good system and practiced following it? A loss has nothing to do with being wrong. Instead, a loss has everything to do with following your system and not making a mistake…. So what if you just accepted losses when you got them, allowing them to be small losses and let your profits run when you have a good trade? Don’t you think that might be a good idea?” – Dr. Van K. Tharp (Source: Vantharp.com)

Forex Trading Versus Binary Options: Which One Is Better?

“Nobody can predict the future. A Harvard PhD and a high school dropout have equal skills at prophecy.” – James Altucher

It’s no longer a secret that Forex market is the biggest and the fastest-growing market in the world. It’s also not a secret that majority of Forex traders end up sustaining negativity, simply because they don’t know or they fail to do what can really make them profitable.

As a result of this, many people have been singing praises of binary options* as a wonderful alternative, casting aspersions on Forex. They think it’s easier to make money from binary options than from Forex. Is that correct? What are binary options? Investopedia defines it as a type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes/no proposition, hence “binary.”

“Binary” means “two parts,” since a speculator will only need to predict that an instrument would rise above (Call) or fall below (Put) a certain price level in a given day or week. Unlike Forex, in which you essentially trade currencies, binary options traders can trade indices, Forex, stocks, and commodities.

Sports, markets and businesses are all zero sum games. Then what about binary options?

Is it possible to make money trading binary option? Is it possible to make money trading Forex?
The answer to both questions is yes…. If a binary options trader is much conversant with, say, oil market, he can make money predicting whether the price would rise or fall above certain price level in a day or a week.

However, contrary to popular opinion, Forex has certain advantages when compared to binary options. The seeming simplicity of binary options trading – only Call or Put – doesn’t mean it’s easy for enjoying long-term success.

Forex vs. Binary
I’m a living witness to this fact. A trader who uses a system that has only 50% accuracy can survive in Forex, but there is no way she/he can survive with 50% accuracy when trading binary options. A trader with only 25% accuracy can make money in Forex, but she/he will quickly crash when approaching binary options with a system that has a hit rate of only 25% accuracy.

I can risk $50 or $100 to target $200 in Forex, but that’s never possible with binary options. The risks are always higher than the rewards, and that’s a worse expectancy. In binary for example, you can risk $100 to gain $50 or $70 or $85 or even $90, but no broker will ever give you a risk-to-reward ratio of 1 to 1, let alone 1 to 2. Forex inherently gives you a risk-to reward ratio of 1 to 10 or 20 or 30, depending on how long you’re willing to let your profits run. We can enjoy everlasting success with positive expectancy only.

Let’s say a broker allows a reward of $80 for every $100 you risk for each binary prediction, you’ll then need to achieve at least 70% accuracy to survive in the long-term. Believe me, this is very hard because the future can’t be predicated. With 70% hit rate, you’re likely to experience 4 or 5 losses in a row with 1000 trials, and with this, someone with a small account can deplete it before a winning prediction comes around. With rewards that are smaller than risks, chances of long-term survival using 70% accurate systems are slim indeed. Researchers have confirmed that people have trouble surviving with even 80% hit rate, owing to psychological factors.

In Forex, people have made fortunes with trading systems that have reliability of around 25% – 35%. They do so by following the timeless Golden Rule of trading: Cut your losses short and let your profits run. You can’t do that in binary options. You succeed when an average loss is smaller than an average gain, not the other way round.

We enjoy everlasting success as traders because there are many things we can control, save the market itself. We can control risks and manage our trades effectively. But in binary options, you can’t control anything, for you’re at the mercy of the market forces once a position is triggered.

If a market moves in my favor before going against me, I can eliminate the risk or negativity with a break-even stop, so that a movement against me won’t result in negativity. This is not possible with binary options, for you lose your entire stake irrespective of the fact that a selected instrument first moves in your favor before reversing against you. Though some may say that binary makes you win even if an instrument first moves against you and later moves in your favor, before the expiration. This is also true of Forex; a position that is in a negative territory can later turn positive.

I can decide to cut my loss before my stop is hit, so that my loss is even limited more effectively. If I gain, say about 200 pips in a trade, I can lock part of it and ride the move even further. I can even take part of the profit and ride the move further. These things aren’t possible with binary options. I’m happy when I see that my losses are smaller than my profits. I know if I traded binary, my stakes would be higher than my rewards. Trading binary options is inherently a negative expectancy game. If other financial markets are zero (0) sum games, the binary options is a minus (-) sum game.

For those who don’t agree with the point raised here, only their personal experience after years will prove the point.

Conclusion: I’m not discouraging people from binary options. There are successful binary traders out there, but I’ve realized that Forex gives me far more freedom to choose my fate in the markets. When you trade a market that you’re very good at, you make fewer mistakes and improve your results. Investing in what you’re conversant with is essential to your financial well-being. Genuine wisdom is scarce, and therefore, success is attainable only when you do what you’re good at. That’s why I enjoy trading Forex: that’s my area of competence.

Please read the quotes above and below, and ponder them. The quotes below are from Markham Gross. They end this article:

“A good trader by contrast will be focused on running a repeatable system having positive mathematical expectancy without need or regard for knowing or talking about the future.”

“It would be impossible to have gains without some loss along the way. My strategy actually results in more losing trades than winners, which is sometimes shocking to people. We win by keeping losses small.”

*Please note that there are differences between regular options and binary options. This article addresses Forex and binary options (not regular options, a good investment vehicle). In order to know the difference between binary options and regular options, please see this link: http://www.ibinarytrade.com/whats-the-difference-between-binary-and-regular-options/

Why we want you to become a successful trader

A STEP BETWEEN PENURY AND SOLVENCY

“Once you take the desire to make money out of your trading and put in the desire to do what good traders do, your mindset shifts and allows you to make more good decisions.” – Craig Cobb

Alan* has reached the end of his tether. His handiwork is not enough to feed him with staple foods, not to mention paying his rent. He’s getting old and he needs to get married so that he can start a family, but he can’t even afford the lowest-key wedding ceremony. He wants to gather some money for his wedding. He applies to a chemical factory and he’s hired immediately. It happens that anyone who applies there will be hired immediately because no educational background is required. Besides, the strongest man in the world can’t work in the factory for one year.

Alan discovers that the working conditions are so ignominiously abject. Apart from the fact that you must work for a minimum of 12 hours per day (84 hours per week), with very hard labor, factory safety is zero rating and the pungent chemical itself carries a major health hazard. If you get injured, you’ll be fired with no first aid. The monthly salary is less than 100 USD. You’ll be penalized for coming late to work and 3 USD would be deducted from your salary per day if you’re absent, even if your absence is due to heath issues.

Alan likes to work hard and he’s hardy, yet he quits the job in less than 3 weeks. The stinking chemical is taking tolls on his health.

Samson’s wife is dead, leaving 3 children for him. Samson believes the only way to honor the memory of his dearly beloved wife is to take good care of her children. Although his income is not that much, he manages the money well so that the children can attend school and have access to basic balanced diet.

Suddenly, Samson’s boss announces that the firm is no longer making profits and all the employees would be laid off in a month’s time. The firm folds up. Since then, Samson has been looking for a job – any job – without success. He lives in a country where over 40% of able-bodied citizens aren’t employed. The kids are now suffering: they’re out of school and malnourished.

Alisa is a full-time housewife and a responsible mom. She’s resigned from her work in order to attend to her kids, for she’s worried that her kids may suffer some disadvantages if she and her hubby have to stay away from home for economic reasons.

Alisa, however, perceives that her husband’s income would be barely enough to sustain the family. Therefore, she needs to look for some passive income to supplement the family’s income and possibly safeguard their future.

Life is full of risk. Someone loses an election after a huge amount of money has been spent. That doesn’t make it improper to spend money on elections. Someone starts a transportation business and ends up running at loss. That doesn’t mean that transportation business is bad. Someone loses his child after spending a fortune to bring them up and educate them. That doesn’t mean it’s wasteful to take care of one’s children. Someone purchases some valuables that are eventually stolen, but that doesn’t mean it’s wrong to buy valuables. A movie or an album is produced, but it does not sell well (a floundering title or a crashing failure). Do we then need to tell people to abstain from movie or album production? A dear Christian brother is ill and hospitalized. We pray fervently for his recovery; yet he dies. Does that mean prayers are useless? Someone’s house is destroyed in a natural disaster, but it doesn’t mean we should be preaching against owning a home. Someone’s marriage crashes after spending huge sums on the union. Does that mean it’s wrong to get married? Someone has an accident with his car. Does that mean one shouldn’t buy a car? The list could go on. Doctors jailed. Ferries capsize. Mines explode, etc. The list of professional hazards out of trading is inexhaustible.

The fact that some people lose in trading doesn’t make it a bad career. This is in a huge contrast to what members of the public believe. If they see one negative trade, they start preaching to people to avoid trading like a plague. These are the people that suffer losses in other areas of life but they don’t see bad things in them. If you don’t know successful traders, there are many of them.

Many people see trading as being risky. Yet, they lose heavily in other aspects of life. Majority of people start small scale businesses; but statistics shows that over 90% of small scale businesses fail within their first 3 years. Think of an easy job, millions of people are also thinking of doing that job. The economy is already glutted. Generally, the jobs and trades that every Tom, Dick and Harry finds easy to do or start scarcely bring financial freedom. The kinds of jobs that bring real financial freedom – like trading the markets – are what most people abhor and find extremely challenging.

Some educated people are suffering because they believe in ‘I beg to apply’ mentality. After all, that’s the reason why most people go to college. One of the most difficult things one can do now is to seek and get a good job. The number of school leavers would continue to outpace the number of jobs created and the situation has high chances of getting worse.

I know somebody who wanted to get employed in a popular oil company. He was told to get a master’s degree, for he’d only a bachelor’s degree then. He enrolled in a master’s degree program. After he completed the program, he went back to the oil company, only to be told that there was no vacancy for him. While his degrees aren’t a disadvantage to him, must he work for an oil company? Can you ask Deron Wagner or Anton Kreil to go for master’s degrees before you employ them?

Without financial freedom, the future looks bleak indeed. Most private companies don’t have retirement plans for their employees, even in developed lands. Most companies and organizations now prefer contract staff. Do you want to put your financial destiny in the hands of your boss?

You may be working right now (or even self-employed), but do you think people will still need your services at old age? If you’re a plumber or a driver, would people still give you jobs to do at old age, when there are numerous young men who’re also competent? Have you even saved enough money for your old age, or do you expect your children to support you then?

Growing older is no offence: it’s a privilege. Nevertheless, some employers wouldn’t consider you if you’re above a certain young age. They’ll tell you: “Applicants who’re above the age of 25 need not apply.” Can they ever say that to David Tepper or David Harding?

Nothing ventured, nothing gained; and to do nothing is to become nothing. If you can become a successful trader, you’ll attain financial freedom. You aren’t going to be retired, for you’ll continue to trade at your old age. You’ll trade leisurely and effortlessly and get rewarded. People like Van K. Tharp and Joe Ross are elderly traders and they’re successful.

The older you become and the more the years of experience you gain, the more valuable and the more sought-after you’ll become.

Trading is as serious business. We want you to become a successful trader. While people complain of economic hardships, you’ll only be smiling to you bank.

This article is ended by the quote below:

“…Trading is the art of paying the price for something you want. It is the art of regarding fear as the greatest sin, and giving up as the greatest mistake. It is the art of accepting failure as a step toward victory.” – Roy Longstreet

*Names in this article have been changed

A Woman’s Addiction To Forex

TRADING IS IDEAL FOR A WOMAN!

As I told you in an earlier article, women can be, and are great traders as well. They certainly got admirable qualities that can also help them in trading. There’s no level of success in trading that isn’t attainable by women. I foresee that the number of women in trading would only be increasing geometrically. The purpose of the interview you’re about to read is to encourage women to come out of their comfort zone and embark on their journey towards real financial freedom. N. Hayes is just a woman like you (or your wife, mom, sister, and aunt). But she’s taken a noble decision – to be a successful trader. It’s a wonderful privilege for me to present this interview with her to you. Here we go:

Azeez: Please introduce yourself.

N. Hayes: Hi everyone, my name is N. Hayes, but most people call me N. I am currently living in Europe and I have been trading forex, for more than a year now. Before being a trader, I worked in the hospitality industry, in the Human Resources Department. I enjoyed it very much but I am definitely enjoying Forex more. Trading started out as just a hobby to pass the time and it has now become my full time job and I love it. Travelling is one of my favorite pastimes, other than reading, cooking, gardening, watching movies and TV series. Currently, I am looking at expanding my career by taking a full 10-month intense course in Money Management, Psychology of Trading, Forex Foundation, etc. My goal is to help others get started in trading and to share my knowledge and experience in this business.

Azeez: How did you start your trading career and what really motivated you to start trading?

N. Hayes: I quit my Human Resource Management job a little more than year ago and started trading full time. I have been hooked on trading since early last year when I had to spend so much time at the hospital and at home due to a shoulder injury. I was bored and started to surf around and I came across an informative website on Forex. Coming from a job with administrative and financial background, I became interested in Forex and I immediately opened an account (real account!) and started trading like a pro (no knowledge in FX at all except 2 years in the futures market many years back). I margined out my 2k account in less than a month! That didn’t stop me from funding my account again. I promised myself that I would get my 2k back from the market. But this time, I subscribed to a signals provider and learn how to trade by reading FX websites, forums etc. I was doing well, my account tripled the amount and that was when I decided to be a full time FX trader and said good bye to my well paying job. I love the freedom of being able to work from home and the freedom to travel! My first Forex related holiday was to the Las Vegas Trader’s Expo, last year in November, which I highly recommend to all traders, especially the ones who are new to this business and wanting to gain more knowledge in trading.

Azeez: Do you think women should be seriously encouraged to trade?

N. Hayes: Being a female trader, one must be prepared to accept her position as an outsider – Trading is a man’s world (I heard this often but I don’t see it this way).This is definitely not gender specific. There are definitely more men in this business, but success and failure come from inside oneself. Of course, the circle of “friends” will be more men than women, I can vouch for this. Having thicker skin helps because it does get brutal sometimes, especially when you are trading with a group, sharing ideas and learning from one another. It can get nasty! Anyway, if one’s goal is to become a successful trader, then they need to do whatever it takes to learn a strategy, a method, practice it over and over again until it becomes second nature. You may need to work harder as a woman to prove yourself, but that is just a part of the excitement and challenge. Take the challenge and you will be successful. There are many free educational materials that you can download online and plenty of websites that offer great trading information. You just need to spend time searching for them. If it is tough to be learning on your own, then work with a trading coach or get a mentor to help you and to keep you growing as a trader. Do not be afraid to get help or ask! There is no right or wrong questions. I know some women are scared of sounding silly by asking a specific question. This fear is rather baseless in many respects. I believe it is time for more women to become traders. Contrary to what some might believe, trading does not turn a woman into becoming a non feminine woman or developing a tough personality. Trading is a refreshing change to the female-dominated professions and I do know some women who choose to become a full trader, mainly because of the freedom it offers. A friend of mine who chose to be a full time trader is a great mom to her daughter. She made a deliberate decision to spend more time with her family and less time in the office. It was not an easy choice as she enjoyed her job very much but she realized that Forex can give her the freedom and flexibility of being a mom and a career woman. Being a trader, she does not need to be at the office 8 hours a day.

Azeez: What do you think are the qualities peculiar to women that could help them in trading?

N. Hayes: I think the best qualities we women have is the ability to multi task, use our intuition, and our perseverance. I also believe that our ability to separate our trading lives from our personal lives is a big bonus, as it helps to alleviate the stress of trading… we have other outlets to relieve our stress.

Azeez: What kind of trader are you? What is your style of trading?

N. Hayes: I used to be more of a scalper (very short term trader) but lately, since becoming a full time trader, I am more of a day and swing trader now. This matches perfectly with my method of trading as my trades are based on technical analysis. I am quite conservative in choosing my trades, the ones with high probability set ups.

Azeez: How do you analyze the markets? What are your favorite pairs/crosses and timeframes?

N. Hayes: Being a conservative technical trader, I describe myself as practical, realistic and decisive when it comes to trading. I love facts and what I think is concrete. I have a set of standards (in my trading plan) and I follow them consistently. With rules in hand, I have no problems weighing alternatives and take rapid decisive action. I let my charts speak to me and I listen to them. I started with EurUSd and Usdjpy but now, I am trading most of the majors and the AudJpy and UsdJpy for crosses. For trade set ups, I start at the higher timeframes; daily, H4 and 1 hour. When executing and exiting trades, I will move to the lower timeframes, 30 minute.

Azeez: Could you please tell us how you apply money management?

N. Hayes: Money management is so important, next to a trading plan and psychology of trading. You see, why most traders fail when they come to the market is they rely on their emotions to make their trading decisions. With good MM, I don’t need to worry about my emotions while I am trading. I have in my trading plan how many pips I am willing to risk per trade and how many trades I have to make if I have few losses in a row etc. I cannot emphasize enough how important a trading plan is.
Do keep in mind that all big losses once began as small losses. Moreover, if you let a losing trade turn into a big loss, that’s going to have a detrimental effect on your trading capital, and once you take a couple of big losses, it’s much more difficult to trade and to gain back the money which you’ve lost. These mistakes can be easily prevented if you have a good money management.
How I determine how much money I actually make on a particular trade? Well, it depends on how much money I actually put into the trade. My usual ratio is 2:1 and 3:1 (low and high probability trades)

Azeez: I really appreciate your blog (http://www.smurfette4x.com/). What are the aims behind this blog?

N. Hayes: The aim behind my blog is to help other traders that are just entering the trading world. My goal is to share the knowledge I have gained with everyone in an attempt to make it less intimidating for people considering trading.

Azeez: Do you fancy or at least, would advise the use of trading robots?

N. Hayes: These so called “Expert advisors” have their pros and cons. I do believe that some work but again a trader needs to spend some time looking for the right one. Also, the mentality of the trader plays an important role in this. There is no such thing as earning money without doing any kind of work. Many people get themselves burned by ignoring the fact that research and testing are definitely a must before they link these Expert Advisors to their live account. Learn how these Expert Advisors work first before having your hard earned money totally at the mercy of a program. There is no doubt of the high success rates that these systems hold but while these values are very positive, it is important to realize the risk that accompanies these rates of success. These experts are programs for certain market conditions and not for difficult market conditions that could lead to serious losses. As for myself, I am currently testing an Expert Advisor which is programmed based on the Grid Trading technique and so far, I am quite happy with it (Grid Trading is a trading technique that uses a series of pending orders creating a “grid”.)

Azeez: Everyone has their strengths and weaknesses, what do you think is your greatest strength and, your weakness as a trader?

N. Hayes: I think my strength is that I’m willing to put as much energy and focus into the job as I have to. My greatest weakness would be that I become a little more cautious and doubt my instincts when I have multiple losses, but on the positive side I don’t give up and work towards improving my skills no matter what.

Azeez: How many pips on average, do you make per month?

N. Hayes: I have a daily goal of 20-50 pips. Monthly average is between 500 – 1000, it really varies, depending on the market. Also, I am more of a conservative trader; I would rather wait for the market to give me a trade than jumping in just for the sake of making some pips. There are times that I don’t trade for a few days, when I don’t see any good, solid setups. It is fine with me. Since becoming a full time trader, I realize how much it pays to be patient and disciplined.

Azeez: What do you enjoy doing apart from trading?

N. Hayes: Traveling! My favorite destination is the USA. This is one of the reasons why I decided to be a full time trader, I can work from anywhere in the world, as long as I have my laptop with me.

Azeez: Do you have any advice for traders out there, especially female traders like you?

N. Hayes: I am not sure if I am the right person to give out any great advice here as I am still “learning” myself. This is the best part of this business, one never stops learning. There is always something new and the market doesn’t pause for us. We need to keep updated and try not to fall too far behind. One reminder that I apply to myself and I would like to share with others, is that “If you are satisfied with the kind of work you’re doing and why you are doing it, you will be successful.” I really believe in this. If you put your heart in it and are willing to learn as much as you possibly can, you will open up doors you can’t even imagine. Never let others influence you otherwise, because if you let others define what success is for you…then it is pretty easy to stray and to lose sight of yourself. Everyone has their own dreams and goals, never forget that. Also, don’t let fear get in the way. Trading is ideal for a woman. It takes time to master so one has to have patience in order to be able to succeed in this business. This is a profession that takes a lot of hard work, focus, strength (emotionally) and determination but if you have what it takes and if you are up for the challenge, you can do it!

Azeez: What are your plans for the future, as long as trading is concerned?

N. Hayes: I am described by friends as a flexible person. Not to mention a daring one. I do have plans for my future but my plans are mostly adjustable. I go with the flow. I prefer to tell you about my dreams instead, as they are more concrete and something that I am really looking forward to and working on. My dream is to be among the successful women in this line of business some day, with a good trading portfolio. My trading blog is a start, for me to share my ideas with my followers. I want to expand from here, maybe giving lessons in a subject that is related to trading. My aim is to help new traders in realizing the reality of what Forex can give them and not seeing it behind rosy glasses. In short I would like to help prevent others from making the same mistakes that I have made in the beginning of my career.

Azeez: N. Hayes, thank you very, very much for this insightful interview!

Teach Your Teens the Art of Trading

“Children are very precious. Parents are also very caring. Do you know these?”

Most parents want the best for their children, and they strive to achieve their aims, even in the face of stubborn obstacles and difficulties. A serious religious parent teaches her/his children about their faith when they’re still very young. In fact, a famous proverb says: “Train a child in the way he should go, and when he is old he will not turn from it.” When an average child is asked, what do you want to be in life? The common answer is: “I want to be an engineer or a doctor or banker or a pilot or a lawyer or a footballer,” etc. No-one will say, “I want to be an online trader.” Why? It’s because this is the mindset that is impressed into them by their folks, since they themselves are yet to grasp the potential of online trading. Those who know about it think it’s too risky, without knowing the principles that can lead to everlasting victory in the markets.

Forex trading is one of the best vehicles that can be used to shield yourself from the persistent pecuniary uncertainties, widespread unemployment and sudden dismissals from jobs, which are so rampant nowadays. Many were having high aims when young, but now they’ve been disillusioned. The idea of going to school, studying hard to get good grades, and then getting a good job, no longer works always. Why are there very few genius traders? It’s because many people aren’t exposed to the world of trading until they’re very much older. If teens are exposed to trading on demos, as they practice risk-free on the virtual accounts that are subject to the real market data and conditions, their trading genius would be awakened. Wouldn’t you want your child to be a trading genius before the age of 22? Would it be possible for anyone to be a genius in other fields of human endeavors if they’re not yet a genius by the age of 22?

Teens should be taught the art of trading, but they should be restricted to demo accounts only, until they reach the legal age in which they can make independent financial decisions on their own. Yes, teens shouldn’t open live accounts until they come of age. However, they can play with demo accounts (as if playing Nintendo games) until their skills are improved. In this regard, demo accounts are a unique tool in teaching your children. If a child will become great in life, observant parents will notice some traces of greatness in the child while he or she is still young. Your children would learn, by experience that uncomplicated methods of speculation ought to be used. If you really love trading and know that it can bring financial freedom (as it’s done for countless known and unknown people), why can’t you teach your children (especially your teens) how to trade? You can show them how to do this when they’re on holidays or long vacations, and encourage them to do further research on their own and practice their own ideas.

It’s a pity that there are still many people who procrastinate. They don’t know that what can be started today shouldn’t be postponed till tomorrow. Some say: I’m not yet settled down. Once I’m settled down, I’ll start learning Forex.” Others say: “There are some things I’m doing right now. Once I finish those things, I’ll start learning trading.” The fact is that, there’ll always be things you’re doing. So if you don’t start learning, there’ll always be alibis. The earlier one starts the journey to financial freedom, the better. The earlier you start learning about the markets, the earlier you attain the level of trading mastery. My regret is that I didn’t start Forex trading earlier. If I’d started it far earlier, I’d have gone very far in attaining my trading goals and ambitions. But, thankfully, I’m now in the race.

As for me, I’m going to teach my son on demos, while he minds his formal education, I’ll also teach him how to spend less than one hour per week on the markets, and yet be a profitable trader. I want him to be become a market wizard, becoming financially independent in future, unless he chooses otherwise (since I’m not going to force my opinions on him).

Jeff Cooper, when he was still young, learned the art of trading from his father, and he later became a legend of the Wall Street. He had love for trading that kept him searching until he discovered the secret of permanent success. Mike Baghdady learned from his father, and has now become a blessing to the trading world. Peter Soodt learned from his father, and he’s now a celebrated and profitable trader/coach. Joe Ross was taught by his uncle when he was as young as age 14, and he’s now one of the most experienced and the most eclectic traders in the world. He trades for a living and has insatiable passion for teaching how the markets work. Philipp Schroeder and Valentine Rossiwall are both young and highly profitable traders. Philipp and Valentine have other goals in mind, yet they take trading serious. Oh, how bright and beautiful the future of these young men would be! Anton Kreil started trading while in his late teens and he retired from the investment banking industry at the age of 28. He now trades his own money and enjoys financial freedom, and he’s still in his early 30s. Kenneth L. Fisher learned about trading from Philip Fisher, his father (who was a great investor) before he founded his own investment firm. He’s on the 2011 Forbes 400 list of richest Americans. He was worth $1.7 billion in the year 2012. As of 2010, his company manages $41.3 billion in 38,521 customer accounts and has been called the largest wealth manager in the United States.

With time, your kids would be forced to be disciplined – in the face of negativity and uncertainties they face on demos. This really calls for rock-solid discipline, meaning that one needs to stick to one’s time-tested trading plans. Negativity shouldn’t be termed as stupidity, for that notion can’t help their trading mindset. If they follow their trusted trading rules and they make profits on demo, they’d be happy. It’s joyous to see your efforts bringing great results and that your goals are being achieved.

Conclusion: The world needs traders – profitable traders. Would your kid be one of them? Successful traders came from many areas and different walks of life. They have individual personalities, various strong points and weaknesses. As your kids have a feel for the markets, they’ll forever remember their mistakes and a number of beautiful trades – a great experience that’ll pave the way for trading mastery. They’ll quickly metamorphose into mature traders. Sharing trading facts with others bring us more satisfaction than keeping the secrets to ourselves.

This article is ended with a quote from Louise Bedford:

“You see, studies have shown that those who believe that they can alter their behavior and their habits to create a different outcome are happier people. They persist for longer. They score better on tests… Those who think they can’t change, and that intelligence is fixed tend to quit at the first sign of trouble and don’t stick around long enough to master a skill.”

Are Top Athletes Richer than Top Funds Managers

“If you understand this way of thinking – that by taking smart risks you can make money over time – it will improve your willingness to take risks.”

What is the answer to the question that forms the topic of this article? The answer is a big NO!

Floyd Mayweather, LeBron James, Cristiano Ronaldo, Tiger Woods, Roger Federer, Lewis Hamilton, Mahendra Singh Dhoni, Cliff Lee, Usain Bolt, etc. Each of these stars is one of the best in their respective fields, and no doubt, they’ve achieved success and fame that billions of people can only dream of. Yet, each of them is still poor when compared to the highest paid funds managers in the world.

If you want to know what each of the star athletes mentioned here earns, you’d need to do the research yourself. On Buzz.money.cnn.com, Jesse Solomon shows a list of the ten highest paid hedge funds managers in the year 2013: David Tepper, Steven Cohen, John Paulson, James Simons, Kenneth Griffin, Israel Englander, Leon Cooperman, Lawrence Robbins, Dan Loebb and Paul Tudor Jones.

David Tepper earned $3.5 billion last year. In the year 2009, he earned some $4 billion. He’s currently worth $10 billion. David’s riches are even far more surpassed by those of some market legends like Carl Icahn ($24.5 billion) and George Soros ($26.5 billion). I don’t even want to mention the Wizard/Sage/Oracle of Omaha.

How much do you think a boxing champion like Floyd Mayweather earned? He earned $105 million, thus currently making him the highest paid athlete in the world. Nevertheless, the 10th highest paid hedge fund manager is Paul Tudor Jones who got a paycheck of $600 million in the year 2013. This means that Paul is more than 5 times richer than Floyd in terms of income last year. Paul’s net worth is $4.5 billion.

The highest paid soccer player in the world is now Cristiano Ronaldo, with less than $100 million in total earnings per annum; yet his income is more than 6 times smaller than that of the 10th highest paid funds manager in the world.

Can you now get my point? The world of trading has produced many billionaires – past and present. These traders are extremely rich, and the incomes of the star athletes pale into insignificance when compared to the earnings of those funds managers.

It’s true that top athletes enjoy heavy glare of publicity and are far more popular because of myriads of fans the world over. Some professional traders aren’t famous because they trade behind their computers in the comfort of their offices. Most people don’t know them, save interested individuals who’re mostly traders/investors. When many football fans talk about how rich their favorite players are, they are often not aware that some professional traders are far richer than them.

With a worth of $1.1 billion, the New York Knicks are the most valuable team in NBA for the year 2013 (with revenue of $243 million for that year). Real Madrid is the most valuable sports team, worth $3.3 billion (with revenue of roughly $700 million per annum). However, David Tepper, who’s not the richest trader in the world (only the highest paid for the year 2013) is far richer than New York Knicks and Real Madrid combined. According to Jesse, the top 25 funds managers took home $21 billion among themselves last year.

You’ve to congratulate yourself on being a trader, irrespective of your experiences in the markets. The richest traders didn’t become rich overnight, nor did the richest athletes, for most of them had very humble beginnings. By adjusting your trading approaches to achieve everlasting triumph, and by sticking to those approaches, you’ll soon reach financial freedom (though you mayn’t attain the list of the highest paid traders).

The quote above is from Bruce Bower. Another quote from him ends this article:

“Focus on making good risk/reward decisions, keeping losses small, and you will start to become profitable.”

The Greatest Trading Skill in the World

“With every trade or investment there are four possible outcomes. You can have a small win, big win, small loss or big loss. As long as we make sure we eliminate the big loss from happening, we can certainly live with the other three.” – Sam Seiden

What’s the most important thing every trader can/must do? What’s the greatest trading skill in the world?

One market wizard was asked this question, and he answered that there are 3 things you must do:
1. Cut your losses.
2. Cut your losses.
3. Cut your losses.
If you can do these three things, then you may have a chance of becoming a successful trader.

Warren Buffet also has been quoted as saying that there are two most important things you must do:
1. Don’t lose your money.
2. Don’t forget the rule above.

The market has no respect for your educational background or achievements. It has not respect for your high school diploma or a collection of PhDs. The market doesn’t respect your political posts or achievements. The market doesn’t respect any strategy you use whatsoever: whether simple or complicated. The market doesn’t know whether you’re highly experienced or have no experience. The market has no knowledge of your religious background, beliefs and titles (whether you’re a bishop, primate, general overseer, etc.). The market has no acknowledgment of your race, tribe, nationality or region or age or gender. It doesn’t know if you’re a chairman or a president or an administrator or a manager or a CEO or a founder. The market has no sympathy for your poor background or your rich status. You may be a celeb, a star or a hero somewhere else, but the market couldn’t care less. The market couldn’t care less whether you’re a chief market strategist or a currency analyst or a senior analyst or an official analyst or a coach or a funds manager or a website manager or an accomplished programmer or a software developer or a financial journalist. The market has no regards or honor for who or what you’re. The only person the market respects is the person that cuts his losses.

When you see professional traders dashing themselves against the floor of their trading rooms and crying like a baby, it’s because they don’t cut their losses. When you see a pro trader running to a medical doctor for help; while the doctor says there’s nothing wrong with her/him, it’s because she/he doesn’t cut their losses.

The best trader in the world is excellent at cutting his losses. When a trade is opened according to a technical or fundamental signal, the best trader opens his trade. However, if there’s a loss, he quickly closes the trade. There’s no hope or question or argument from the best trader. When a trade doesn’t work, he closes it. But another trader – the crazy speculator – argues in favor of significantly losing positions.

Losses are like weeds in a garden while profits are like flowers in the garden. We want to remove our weeds and water our flowers. We don’t want to water our weeds and remove our flowers, but according to cold reality, many traders remove their flowers by cutting their profits and water their weeds by allowing their losses to run.

Your ability to cut your losses when they’re still insignificant is the most important aspect of your trading career. It’s the greatest determinant of your everlasting success, your ability to survive losing streaks (which all proficient traders must inevitably face occasionally), and the possibility of ending up being profitable.

Someone with 80% accuracy will lose his money eventually for failing to cut her/his losses while someone with 40% accuracy will ends up winning eventually for cutting losses. When 80% profits are cut and 20% losses are run, she/he ends up losing money because the 20% losses that aren’t controlled can take away all the profits and provide further negativity. When the 60% losses are cut and 40% profits are allowed to run, she/he ends up making money.

Triumphant traders focus on what they can really control, i.e. their losses (plus profits), knowing full well that their overall success has nothing to do with their strategy which simply shows them when to buy or when to sell. The knowledge of fundamentals, technicals, Elliot Wave, Fibonacci, programming, etc. can’t help you if you fail to cut your losses. When an Elliot Wave company makes forecasts and loses, they can be saved only by cutting their losses. Decades of experiences can’t help you unless you are good at cutting your losses. Failure to cut your losses will eventually lead to frustration.

Great fundamental figures like Non-farm Payroll have sent some people to their grave because they bet too big and failed to cover their losses. On the other hand, these great fundamental figures have benefitted sane speculators as well.

If you believe in scalping or robots or candlestick patterns, don’t forget that the ability to cut your loss while it’s small is the ultimate thing. When you enter a trade based on a Hanging Man (Hammer), you might later see it as a “Sitting Man (fata morgana)” if you don’t cut your losses. Whether you follow signals or copy trades, cut your losses. Whether you use 5-minute charts, or 30-minute charts, or hourly charts, or 4-hour charts or daily charts, cut your losses.

You shouldn’t bet big in the first place: only bet very small. When the small bet proves to be wrong, then exit with a small loss. This is your life insurance in the market. A small loss that’s allowed to run can metamorphose into a gargantuan negativity.

When I place a trade and it loses, I exit at a predetermined level.
When I place another trade and it loses, I exit at a predetermined level.
When I place another trade and it loses, I exit at a predetermined level.
When I place another trade and it loses, I exit at a predetermined level!
When I place another trade and it loses, I exit at a predetermined level!!
When I place another trade and it loses, I exit at a predetermined level!!!

Anytime I see a weed, I don’t allow it to grow. I can continue losing, and usually, I don’t go down more than 5% in worst-case scenario. After all, the existence of my account is the most needed thing, not the profits on it. When a winning streak comes around, I quickly recover. This is the most effective way to make uncertainties my ally.

With a series of stop loss triggers, breakeven triggers, trailing stop triggers and take profit triggers (alternating themselves randomly), I’m sure to move ahead in the long run, no matter how slowly.

You remain victorious as long as you cut your losses without hesitation. Last month, I made a profit of 950 pips as a result of cutting my losses. I’m not better than other traders – neither is my strategy. I realize that cutting my losses is what I must do in order to make profits consistently and enjoy permanent success as a trader. Ability to cut losses is a huge edge indeed! Please don’t let your competitor know about this.

The quote below ends this piece:

“Cut Your Losses Short and Let Your Winners Run,” is the salvation of our trading plans. Since we will both win and lose, big winners outshine small losses every time… Here’s a rule we can take to the bank: Whenever you identify HOPE as the primary reason for holding a position, CLOSE IT IMMEDIATLY!” – Bob Robertson

Trading and investing are very simple processes and we human beings try to make it into something much more complex. Unfortunately, we have a lot of biases that enter into trading decisions.

I believe people get exactly what they want out of the markets and most people are afraid of success or failure or both. As a result, they tend to resist change and continue to follow their natural biases and lose in the markets. When you get rid of the fear, you tend to get rid of the biases.

As for risk, most people don't understand it, including a lot of professionals, and what's really interesting is that once you understand risk and portfolio management, you can design a trading system with almost any level of performance.

NB: The statements above are made by a world-renowned trading coach, Dr. Van. K. Tharp. That’s an introduction to this wonderful thread. I’ll be updating it with the secrets of maker wizards.

I always say that people do not trade the markets; they trade their beliefs about the markets. In that same way, I'd like to point out that these updates reflect my beliefs. If my beliefs and your beliefs are not the same, you may not find them useful. I find the market update information useful for my trading, so I do the work each month and am happy to share that information with my readers.

However, if your beliefs are not similar to mine, then this information may not be useful to you. Thus, if you are inclined to do some sort of intellectual exercise to prove one of my beliefs wrong, simply remember that everyone can usually find lots of evidence to support their beliefs and refute others. Just simply know that I admit that these are my beliefs and that your beliefs might be different.

NB: The statements above are made by a world-renowned coach, Dr. Van. K. Tharp. That’s an introduction to this wonderful thread. I’ll be updating it with my journal of weekly trades, which are basically about what I’m doing in the markets (not what people should do).

A Terrible Service Experience from GLO (Inhuman Customer Support Agents)


I should have written this message a long time ago but I was busy. Certain Glo customer support agents did something terrible to me and I decided to make it public.

OCTOBER 10, 2015
In Lagos, I was traveling from my house to another part of Lagos when a professional pickpocket stole my phone while I was in a bus. The phone contained a Glo (SIM 1) and an Etisalat (SIM 2). I called the phone with another number, but the thief refused to pick it.

When I got to my destination, I borrowed a phone from an acquaintance who happened to have Etisalat and Glo lines in his phone. I called both Etisalat and Glo customer agents and each one of them asked me to call back with these details:

The year I bought their line
The amount I loaded last
3 of my most called numbers
Or the package in the line.


I called back and provided the details and Etisalat blocked my Etisalat line. I was happy because the credit in it was protected and the thief wouldn’t be able to do anything funny with the line.

Unfortunately, Glo refused to block my Glo line. They told me the request to block the line was being processed. It was a Saturday afternoon, so the nearest Glo office might have closed for the day. I called them with borrowed Glo lines repeatedly throughout the day, but they refused to block the line.

I told them the logic was simple: Block the line now. On Monday, I’d go to a Glo office with all the required documents and have the number retrieved.” I also told them the danger of having my most important line in wrong hands.

I let them know that with the number:
The thieves could commit impersonation, identity theft, false claims and other kind of scams. They could say I’d an accident or got robbed or kidnapped and my friends and families must send money or credits to save me. Any of my people who saw the line would think it was me. They could commit any crimes with that number. Unthinkable things could be done when your prime number goes into wrong hands.

Yet Glo people kept deceiving me that they’d block it. After repeated calls on Sunday (October 11) they confessed they wouldn’t block it. I was frustrated. I told them that Etisalat blocked my line on a genuine request, but I was told: “This is Glo.”

What is the meaning of that? “This is Glo.” Does that mean they must do irrational things because they’re Glo? I begged them, but they refused. I reasoned with them to put themselves in my shoes: If they lost their phone on a weekend and their service provider failed to block the line, how would they feel?

The scoundrel that stole my phone refused to switch off the Glo line for roughly 2 days. He was receiving calls from my friends and family and acquaintances, telling them all sorts of rubbish, until I was able to retrieve the line.

I was highly disappointed in Glo. This is the line I used to open my savings, current and domiciliary accounts at GTBank and Ecobank. This is the line I use for SMS and Internet banking. This is the line I use for all my forums, online and online services accounts. This is the line I’ve been using for at least 11 years.

It was as if I was naked. I couldn’t sleep from Saturday until Monday morning, and the thief kept the line open, having used all the credits in it. It was as if I was naked. The line was more important to me than even a car. I called Glo countless times, but they refused to block the line.

If a serious crime was committed with that line, I’d have started a lawsuit against Glo.

If it’s not for the fact that I’ve been using the line for about 11 years and my people and friends home and abroad (including various services) have known me with the line, I’d never use it again. I’d never use Glo for voice calls again, except for the Internet browsing.

I’ve another Glo line which I use solely for Internet browsing, and I’ve noticed that whenever there’s an Internet problem, no matter how many times you call 444 or 121, the problem would never be rectified until Monday. So if you’re using only Glo for the Internet and there’s a problem on late Friday or Saturday or Sunday, you need to forget about any solution until Monday. They provided 24/7 Internet services, but it seems there are no personnel that can attend to Internet problems on weekends, thereby holding customers to ransom when problems happen on weekends.

This is the reason why I bought an Etisalat modem so that I can simply use it as soon as Glo has Internet problems.

I went to the nearest Glo office on Monday morning and I retrieved the line. I explained my ordeal to the lady that attended to me, but she said nothing. I was only a dog to her.

On monthly basis, I loaded at least N2000 worth of credit on Glo for voice calls and N5000 for their Internet services (N7000 per month: N84000 per annum, minimum). I was faithful to Glo for many years, even encouraging others to use their services. But what I could get in return was what happened on October 10, 2015.

Despite years of loyalty and consistent loading of credits, I got nothing in return except to be cajoled into loading more credits to win a car – something which chances are very slim.

We’re treated as assholes, yet their salaries are paid from our pockets. They waste lots of money on the so-called ambassadors who really add no value to their company. They treat them like kings and queens – and I won’t be surprised if they use Glo services free. Those who add value to their company in little and humble ways (buy buying credits often and often) are disregarded, downgraded and ignored when they need simple assistance like “Please block my line now, I’ll go to your office to retrieve it later.”

I and other millions of faithful customers use Glo and load credits regularly, helping them to rake in huge amounts of profits per month. Yet they treat us with disdain, like dogs. Most customer support agents, especially female, are terrible. I don’t have anything against women, for they’re our mothers, sisters, wives, nieces, daughters, friends, aunts, and cousins. I was just revealing my experiences with customer support people.

Clearly, some customer support agents are suffering from mental disorders (like ending calls abruptly while conversation is going on, though I need to also confess that Airtel customer support agents are extremely good at ending calls abruptly when serious conversations are going on, but they’d deny that vehemently). They’re hired based on ability to speak fluent English and because of degrees, but their brains aren’t tested to see that they’re mentally OK or they’ve sound minds. They aren’t tested to ensure whether they’re competent enough to know what they’re doing.

This is not the Glo I used to know 9 year ago. 9 years ago, someone lost his phone and called Glo customer care with another line. After he answered all security questions satisfactorily, the line was blocked. He then went to their office the next day and retrieved the line. I witnessed that first-hand.

A long time ago, I was glowing with pride. I was ruling my world. But now, I’ve been shown unlimited apathy, thick skin and disregard. I wonder how many customers suffer like this in silence.

I’m not using this as a means to elevate one service provider above the other, since other networks also have their antics. but I was highly disappointed in Glo. I still use Glo Internet services because they give generous data, plus their Internet service is fast and somewhat stable, but on the line in question, I won’t load more than N100 per month again… just to keep the line active because it’s connected to many things that have to do with my life. I load generous amounts of money on another network now.

If Glo management read this, they should imagine how many customers they fall into disfavor with, as a result of weird antics showcased by their customer support agents.