analyst75

Here’s the market outlook for the week: EURUSD Dominant bias: Bullish Last week witnessed the greatest volatility in the markets since January 15, 2015. Between August 19 – 24, price went upwards by 680 pips, topping at the resistance line of 1.1700. Immediately the resistance line was tested, price began to retrace steadily and gradually. From the weekly high of 1.1700, price has gone downwards by 520 pips; thereby threatening the recent bullish bias. The threat to the bullish bias is so serious that a movement below the support line at 1.1100 would ultimately result in a bearish outlook. USDCHF Dominant bias: Bearish From August 19 – 24, this pair plunged by 500 pips in what can be called the biggest USDCHF move in the last few months. From August 25 till now, price has nevertheless, rallied by over 300 pips, which is another threat to the existing bearish outlook on the market. In case price goes above the resistance level at 0.9700, things would turn cleanly bullish; whereas failure to do that could strengthen the existing bearish outlook. Since the outlook on CHF is bearish for the month of September, bulls would be having some difficulties pushing USDCHF upwards. GBPUSD Dominant bias: Bearish When the hope of a weak GBPUSD was almost dashed for the month of August 2015, the pair eventually became weak. This formerly trudging pair managed to test the distribution territory at 1.5800 before bulls lost all their power. From that distribution territory, price nosedived by 450 pips, reaching the accumulation territory at 1.5350. This means that bears are the overall winners on GBPUSD in the month of August, since their action overturned all the bullish gains for the month. In September, we will see very serious volatility on GBPUSD (and of course on all GBP pairs), coupled with fast bearish and bullish movements. USDJPY Dominant bias: Bearish The expectation of a bearish USDJPY pair for the month of August eventually materialized; and so was the bearish outlook on some other JPY pairs. From August 19 – 24, price plummeted by 800 pips, going briefly below the demand level at 116.50. Since then, price has been making a noteworthy bullish recovery - a movement of 500 pips. Should the price move further upwards by another 200 pips this week, the bearish outlook would be rendered ineffectual. However, an upward movement of 200 pips could be difficult to achieve because it is expected that most JPY pairs would be bearish for most of the time in the month of September (with a few exceptions); and USDJPY would not be different. EURJPY Dominant bias: Bearish Owing to the strength in Yen, which was already anticipated, EURJPY fell sharply, resulting in a Bearish Confirmation Pattern. Though there is an ongoing struggle between bull and bear, price was able to attain the demand zone at 135.50 last week, in a downward movement of 300 pips. The demand zone at 135.50 was battered several times without being permanently penetrated. That demand zone ought to be breached this week or next so that the bearish bias can continue to make sense. This forecast is concluded with the quote below: “The market provides the greatest opportunity on earth for financial reward. It also teaches great lessons… It is the greatest game on earth.” – Mark Minervini (a trading legend)

Here’s the market outlook for the week: EURUSD Dominant bias: Bullish From the support line at 1.1050, this pair went upward by 330 pips, going above the support line at 1.1350. EUR is now one of the strongest among the majors (and so is CHF) and this has reflected on most EUR pairs. The next targets for EURUSD are now at the resistance lines of 1.1400 and 1.1450, which could be breached easily with an ongoing bullish pressure in the market. USDCHF Dominant bias: Bearish This is a bear market. The massive bearish breakout that was seen last week has resulted in an end to the recent sideways movement in the market. The weakness in USD and the strength in CHF, coupled with the fact that this pair has to trade in the opposite direction to the strong EURUSD, have contributed to the current tailspin. Price dived by 300 pips last week, and it is now close to the support level at 0.9450. With a continuation of the current situation, bears may be able to attain another support level at 0.9300 this week. GBPUSD Dominant bias: Bullish GBP may be weak somewhere else (as seen on GBPCHF and GBPJPY), but it is not weak against USD. Last week, GBPUSD managed to go above the stubborn accumulation territory at 1.5650. Bulls tried to push the price further upwards, but bears came in against them and started their bearish efforts. Another serious fighting is taking place around an accumulation territory at 1.5700, but the bulls must eventually win for the current bullish outlook to continue being logical. The hope of a weak GBPUSD has been dashed for this month, because stubborn distribution territories, if breached, become stubborn accumulation territories (and the other way round). After all, GBPUSD is positively correlated with EURUSD. USDJPY Dominant bias: Bearish Following the recent equilibrium phase – which lasted for several weeks – USDJPY finally broke south in a predictable manner. A weak USDJPY has long been anticipated; and with the fact that bulls have failed to push price significantly northward, the current bearish plunge is no wonder. In a strong trending market like this, demand (and supply) levels would be easily cut through; just like a hot knife through butter. Further southward movement is anticipated this week, though bulls may make some faint effort to reverse the trend. EURJPY Dominant bias: Bullish The EURJPY cross initially went down by 100 pips last week, but the movement was later reversed and price went vividly upwards. The next point of attack is the supply zone at 139.00. Price is very close to that supply zone and it may be breached to the upside. The bullish bias will exist for as long as EUR is strong. This forecast is concluded with the quote below: “If you are just starting out, you should trade with real money as soon as possible… Do not fool yourself into a false sense of reality. Get accustomed to trading for real because that is what you are going to have to do to make real money.” – Mark Minervini (a legendary trader)

“However, it is pleasant to win over the long term. Contrary to popular opinion, losses are part of winning. Take sports for example.” – Markham Gross A drawdown is the peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough. A drawdown is measured from the time a retrenchment begins to when a new high is reached. This method is used because a valley can't be measured until a new high occurs. Once the new high is reached, the percentage change from the old high to the smallest trough is recorded (definition source: Investopedia.com). As you can see, drawdowns (or roll-downs) are periods when you experience losses and your account goes down. If you open an account with $10, 000 and it drops to $9,200, then you experience a drawdown of 8%. Causes of Drawdowns Let’s put the issue of trading with no stops and high risk aside. Let’s imagine someone is using a good strategy that makes him cut his loss at 50 pips and runs a profit until it reaches 200 pips. That’s a good trading idea which makes money when currency pairs trend nicely. Nevertheless, when a period of drawdowns comes, more stops would be triggered and take profit levels would hardly be reached. The few take profit levels that are reached would be too few to recover the too many stops that are triggered. You open many a trade and it moves in your favor by a few or several pips and then turns negative, hitting your stop. For days, weeks, or months, false breakouts wouldn’t be a curiosity and sustained trending movement would be scarce. Trading ideas that let profits run are the best, but they generally suffer when the markets enter equilibrium phases. As in real life, doing the right things doesn’t always make you appear smart. In fact, you may sometimes look stupid by doing the right things. A trader that uses a stop may appear stupid when they are stopped out on a trade that eventually reverses and turns positive. A trader may appear stupid when a position they are trying to ride fails to meet its target, turning from positivity to negativity. But in the end, we’ll reap the benefits of doing the rights things. Soon, a time would come when the situation will change and the person will recover the losses within days, weeks or months. Treacherous Statistics Look at the long-term results of the strategies below: Strategy A: Growth: 343.80% Drawdown: 37.45% Monthly: 19.09% Strategy B: Growth: 119.40 Drawdown: 22.08% Monthly: 10.51% Strategy C: Growth: 12.04% Drawdown: 11.16% Monthly: 0.49% You can see that the strategies above have made nice profits in the long run, but not without roll-downs. Strategy A has earned a profit of 343.80% over the years, but it also went thru periods of losses amounting to 37.45%. The users of the strategies obviously deal with the roll-downs successfully; otherwise they’d have disappeared. One marketer was recently creating hype that he’d a strategy that could turn $500 into a growing monthly income. As you know, the job of marketers is to emphasize the bright side of what they sell, while glossing over the dark side. It’s like when a religious preacher is telling people nice things that will happen to them if they join her/his religion and become responsible, without telling them the reality that religious people aren’t also immune from suffering. For instance, when an earthquake occurs, it doesn’t avoid the religious people in the region. I never tried that hyped strategy – though I’ve tested over 250 strategies in my entire career. There’s no perfect strategy and there won’t be one. All excellent trading strategies experience drawdowns. All super traders experience drawdowns, albeit victoriously. Sadly, the subject of drawdowns is the least mentioned in the trading industry, and there’s only scanty literature about the subject, in spite of the fact that it’s one of the most important topics in trading. Drawdowns must be experienced from time to time by all traders irrespective of age, intelligence, expertise, years of experience, risk control ability and strategies. This is where majority of traders fail. Your ability to deal with drawdowns triumphantly is the greatest determinant of the end game and your ability to enjoy a long-lasting career. The smaller a loss is, the easier it’s to recover. The bigger a loss is, the more difficult it’s to recover. There are periods when you’ll make money; there are periods when you’ll lose money, and there are periods when your performance would be flat (you’ll never go up or down). There’s no way around this fact. There is no way around the fact that you must sustain losses that you must eventually recover. Flat and drawdown period may even be longer than you expect. Switching strategies isn’t the way out. Can a rolling stone gather any moss? That’s why it’s unrealistic to set a weekly or monthly target in a world in which you can’t really predict the future. That’s why it’s realistic to open a trade only after you’ve imagined the worst-case scenario. With that kind of mindset, you’ll realize the folly of not using stops and the folly of trading with large lot sizes. However, most of us have serious psychological and emotional problems. One of the most frustrating things is to keep on trading when you keep on making losses. Your hope of a monthly income would be dashed and your courage will evaporate. The frustration would even become more intense, especially if you live in a country where you’ve to generate your own electricity and fuel is extremely scarce and expensive. What Good Traders Experience I remember what happened to me in the year 2011. I was making good profits for about 4 months: up to 30% (6000 pips). Then suddenly, the market conditions change and I was having losses after losses. I kept on managing my risk, being faithful to the system I used. The losing periods lasted for about 3 months and I went down from 30% pips to 15%, and suddenly… the market conditions became favorable again and I finished that year with 49% profits. In a typical year, you can make 10% in January and 6% in February. You can make 3% in March and lose 9% in April. You can lose 4.5% in May and lose additional 5% in June. You can gain 4% in July and lose 4% in August. You can gain 11% in September and gain another 6.5% in October. You can gain15% in November and finish December with another 2.5%. How much would the trader end up with in the year? This is the reality of trading, which you must accept or go do something else. Many so called Forex traders are gamblers who think they’re good. They lose hugely or earn margin calls during drawdowns. Anton Kreil says you will have about 3 months (or more or less) in a year in which you’ll experience drawdowns no matter what you do. How do you explain this to your investors? How do you explain this to your family? When you limit a loss, you accept the fact that it won’t have any major impact on your portfolio anytime, no matter how terrible the situation may be. You can check your account history or past trading results in order to get comfort, knowing full well that your system will soon start working again because it worked in the past. You’ll be encouraged to keep on taking new signals (for you don’t know the ones that would win and recover your losses), maintaining discipline and calm. To be a permanently victorious trader, you must control your loss and limit your roll-downs. It may be emotionally satisfactory to refuse to accept a mistake and ignore the use of stops, and the temptation to do silly things will balloon. In most cases, prices may go back to your entry points after harrowing periods of waiting and hope, which may be longer than normal. There’ll also be cases in which the hopes would be dashed as prices refuse to come back in your favor, going further and further against you instead. All the profits plus the capital you’ve would vanish. All market veterans acknowledge that the importance of loss control can’t be emphasized enough, because that’s the reason why over 95% of traders can’t be successful as traders. On Trade2win.com, Barjon says… Perhaps all this makes it sound as though our trader’s reasoning will be spot on or that he is a fortune teller who can foresee the future. There is not such a trader. All trading is about making assumptions based on experience of what has happened in similar circumstances in the past. Those assumptions may be right or they may be wrong and from the business perspective the aim is to gain the necessary advantage when they are right and limit the damage when they are not. This piece is ended by the quotes below: “Our worst case scenario for the basic strategy is where the trader can lose 70 per cent of the time with a reward-risk ratio of 3:1. With these statistics the trader can still be consistently profitable. The winners take care of the losers.” – Manesh Patel “The difference between top-notch winning traders and those who barely get by is the attitude they take toward losses. Trading is a tough business where setbacks and losses are commonplace. If you aren't careful, you can feel beaten, knocked down, and afraid to get back up. It may be difficult at times, but it is often necessary to forget about the past.” – Joe Ross

Here’s the market outlook for the week: EURUSD Dominant bias: Bullish This pair rose by 150 pips last week, rising from the support line at 1.0950 and reaching the resistance line at 1.1200. Price has really met a challenge at the resistance line at 1.1200, but it would need to go above the resistance line so that the bullish journey can continue. There are support lines at 1.1050 and 1.1000: the bullish outlook would make sense as long as the support lines are not breached to the downside. USDCHF Dominant bias: Bullish In recent times, both USDCHF and EURUSD are making bullish efforts. This is unusual because the pairs ought to go in separate ways (and they would soon do so). After testing the resistance level at 0.9900, USDCHF got corrected by 200 pips, testing the support level at 0.9700. However, this does not render the recent bullish bias invalid. The pair is now making some effort to go upwards and this week would see the result of that effort. The recent bullish bias could only be rendered useless in case the support level 0.9650 is breached to the downside. GBPUSD Dominant bias: Neutral Cable remains highly volatile; characterized by large upswings and downswings in the market. There is no clear directional bias on the market because bulls and bears enjoy only transitory victories. There is an accumulation territory at 1.5450 and there is a distribution territory at 1.5650, which is an adamant distribution territory indeed because it has rejected all bullish effort for the past several weeks. Since the expectation for GBP is bearish for this month, things would become really bearish when the accumulation territory at 1.5450 is broken to the downside. On the other hand, a break above the distribution territory at 1.5650 would mean the bearish expectation may not materialize this month. USDJPY Dominant bias: Neutral Based on the current price action, it can be said that USDJPY has hitherto defied gravity. Occasional bearish corrections are quickly followed by rally attempts – and all these are not even significant. This week, it would be intriguing to watch what would happen to this currency trading instrument. A movement below the demand level at 123.50 would result in a ‘sell’ signal while a movement above the supply level at 125.50 would result in a Bullish Confirmation Pattern. EURJPY Dominant bias: Bullish This cross rallied massively last week, closing at 138.11 on Friday, August 14, 2015 (just above the demand zone at 138.00). While the cross may journey further northwards this week, that would not rule out the possibility of a bearish plunge. The cross would be going upwards only as long as EUR is stronger than JPY. This forecast is concluded with the quote below: “After playing in front of large football crowds and having the spotlight on me, I really enjoy having my own destiny in my hands now. I miss being as physically fit as I used to be, and the fun times with the other players, but I also like the freedom of trading. As a professional sportsman you have no freedom. But in my second career I have all the freedom I need, and that is through trading.” – Lee Stanford (Source: Tradersonline-mag.com)

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 11 “The biggest risk in trading is hubris… This is because being wrong is actually an integral part of success. A successful futures trader makes many more losing trades than winning ones. The key is to recognize and concede the mistakes and cut losses. And ride the winners.” – Bruce Kovner Name: Bruce Kovner Date of birth: February 25, 1945 Nationality: American Website: Caxton.com Career Born in New York, Bruce is from Jewish ethnicity. His family came from Czarist Russia, fleeing persecution for their political and religious beliefs. He loved football and piano. He went to Harvard for a PhD program but he was unable to finish the program. Following that, he tried a number of jobs, like playing harpsichord, writing and driving a taxi. He discovered trading as a career shortly after his first marriage (he’s been married twice). He began trading in 1977 with a borrowed 3,000 USD and ended up making 23,000 USD with it. During the volatility the position was exposed to, the open profit even went up as high as 40,000 USD. This made Bruce fall on love with the markets. He worked under Michael Marcus - one of the trading geniuses featured in my past articles – and soon gained respect as a disciplined and reality-based trader. Eventually he founded his own firm; Caxton Associates, LP. The firm became so successful and managed around 14 billion USD at the apogee of their achievements. Outside trading, Bruce Kovner isn’t well known, for he seldom grants interviews and loves privacy so much. One source says that his Fifth Avenue mansion in New York City, the Willard D. Straight House, features a lead-lined room to protect against a chemical, biological, or dirty bomb attack. He’s no longer working as CEO of his firm: he’s retired from that position. As of March 2015, Bruce was worth 5 billion USD. He’s an active philanthropist and he’s also engaged in other interesting activities. Insights: 1. Bruce probably wouldn’t make billions of dollars as a writer, or as a harpsichord player or as a cab driver. Or can you tell me of anyone who makes billions driving a cab? He was so lucky to discover trading. You’re so lucky to be reading this article. Few jobs can be as high paying as trading. Imagine someone who started trading with $3,000 in 1977 and is currently worth $5,000,000,000. That’s Bruce Kovner. What can you learn from this? 2. Trading success will, undoubtedly, cost you hard work and unrelenting desperate effort to achieve trading mastery. Without accepting this reality, you can’t be a good trader. Anyone telling you otherwise is a liar (and your experiences will later confirm the facts). 3. There’s one thing that can’t be avoided in trading: you must make mistakes constantly and learn from them. That’s normal. You make a trading decision, and lose. You repeat that and lose. You repeat that and lose. You make another trading decision and lose. Then a good winning period comes out and you recover the loss and move ahead. In time, you proficiency increases as you make less mistakes (which is defined as not following your rules). 4. Don’t follow the masses, for they’re always wrong. When most traders move in one direction, then the trend is about to change. If the masses were always right, most traders would be rich. But this isn’t so. For example, there’ll soon be a breakout after most traders have noticed an equilibrium phase. 5. Short rallies in bear markets and the other way round for bull markets. 6. Bruce said risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is his second piece of advice. Whatever you think your position ought to be, cut it at least in half. This piece is ended with a quote from Bruce: “My experience with novice traders is that they trade three to five times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks. The emotional burden of trading is substantial; on any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade.”

Here’s the market outlook for the week: EURUSD Dominant bias: Bearish EURUSD is now a volatile pair, characterized by serious struggles between bear and bull in the context of a downtrend. The support line at 1.0850 was tested last week, but price could not break it to the downside. For the downtrend trend to continue this week, that support line should the broken to the downside as price targets another support lines at 1.0800 and 1.0750. This bearish outlook would make sense as long as the resistance line at 1.1050 is not broken to the upside. USDCHF Dominant bias: Bullish This is one of the few currency pairs among the majors which traded in one direction throughout last week. From the support level at 0.9650, price moved upwards by 200 pips, closing around the resistance level at 0.9850. The bias is bullish: the resistance levels at 0.9900 and 0.9950 could be tried this week. Therefore, it is expected that this currency pair would be edging it way upwards as long as USD does not experience any significant weakness. GBPUSD Dominant bias: Bearish On GBPUSD, there was a southward breakout (out of the volatile equilibrium phase that was seen last week). Within the last two trading days of the last week, the southwards breakout made the price to test the accumulation territory at 1.5450. The price even went briefly below that accumulation territory before bouncing upwards. This week, further southward attempts may be witnessed because the outlook for GBP (and other GBP pairs) is bearish. And this is true of this month. USDJPY Dominant bias: Bullish This currency trading instrument traded upwards last week, reaching the supply level at 125.00. Nevertheless, further upwards movement was rejected at that level, making price to get corrected to the downside. It should be noted that, prior to the current price action, USDJPY moved sideways for a few weeks, and when there was a breakout to the upside, it was only a movement of 100 pips. The bearish correction that happened on Friday has made the prior bullish breakout look like a false one. This means that, while further bullish attempts are not impossible, the most probable direction for the market this week is southward. EURJPY Dominant bias: Neutral On EURJPY cross there was no clear victory between bulls and bears, Last week, desperate bullish effort was being frustrated at the supply zone at 136.50. This shows that bears are fighting hard to check bulls’ ambitions. A test of the demand zone at 135.00 would thus result in a Bearish Confirmation Pattern, thereby enabling more bearish journey. It is expected that Yen would be strong this week or this month, which should cause most JPY pairs, including EURJPY to become strongly bearish. This forecast is concluded with the quote below: “Real professional traders have a competitive drive and appreciate the intellectual challenge that the markets pose to them again and again.” – Dr. Brett N. Steenbarger

GOLD (XAUUSD) Dominant Bias: Bearish Gold fell by over 8000 points last month, testing the support level at 1084.90 before experiencing a pause in the bearish momentum. Price dived significantly, reaching the monthly low of 108.90 on July 24, 2015. Then it started moving sideways for the rest of the month. The bias on the market remains bearish, and when a breakout does occur, it is more likely to be to the downside. The support levels at 1075.00, 1065.00 and 1050.00 could thus be tested this month. On the other hands, bullish attempts could force price to foray into the resistance levels at 1115.50 and 1125.50 – which are supposed to halt further northward attempts. Any movement above these resistance levels would mean the bearish bias could be over. SILVER (XAGUSD) Dominant Bias: Bearish Just like Gold, Silver also trended downwards in July 2015. However, price has been ranging in the last two weeks, showing that there would soon be a significant breakout in the market. When the breakout happens, it would be to the downside (just in favor of the extant bias), making price to test the accumulation territories at 14.3100 and 13.5000. Should price go above the distribution territories at 15.2000 and 16.5000, it could result in a Bullish Confirmation Pattern, thereby rendering the bearish outlook invalid.

Here’s the market outlook for the week: EURUSD Dominant bias: Neutral This pair experienced a great deal of volatility last week. Price went up on Monday, and then dropped seriously from Tuesday to Thursday. On Friday, price spiked upwards and immediately following that, got corrected to the downside. The high volatility and short-term swings in the market have cancelled any directional bias on the market, not because of any equilibrium conditions, but because neither bulls nor bears are able to dominate protractedly in spite of the fact that momentum is currently high. This pair would be characterized by high momentum this month, and it would be difficult for it to rally protractedly as long as USD is strong. USDCHF Dominant bias: Bullish Despite the fact that bearish attempts caused the support levels at 0.9550 to be tested a few times last week, USDCHF was able to maintain its bullishness. Since the support level at 0.9550 has become a strong barrier to bearish effort, it would be safe to assume that the bullish outlook on the pair will remain valid as long as price is able to stay above that support level. The resistance level at 0.9700 is also a big challenge to bulls, for price could not break above it last week in spite of sincere effort by the bulls. A break above that resistance level would thus result in a smooth continuation of the extant bullish trend. The outlook would go bearish as soon as the support level at 0.9550 is breached to the downside. GBPUSD Dominant bias: Neutral Cable has not been able to go below the accumulation territory at 1.5450 or go above the distribution territory at 1.5650 for weeks; therefore, the accumulation territory at 1.5450 and the distribution territory at 1.5650 could serve as boundaries for short-term swing trades. In this week or next, price could move out of these boundaries, thereby giving way to a serious directional movement. In this month, GBP (and other GBP pairs) would most probably be weak in most cases, though there could be occasional bullish attempts on the way. USDJPY Dominant bias: Neutral This currency trading instrument has been moving sideways since the middle of July 2015. A break above the supply level at 124.50 could result in a Bullish Confirmation Pattern in the market, and a break below the demand level 123.00 could also result in a Bearish Confirmation Pattern in the market. This month, it is highly possible that Yen would gain lots of strength, thus causing JPY pairs to tumble. The strength in the Yen may start before the end of this week, and therefore, it is possible that USDJPY will go below the supply levels at 123.00 and 122.00 this week or next week. EURJPY Dominant bias: Bullish Although there is a measure of strength in the EURJPY cross, the situation looks delicate. The supply zone at 137.50 could challenge further rally in the market, and the possibility of a bearish movement starting anytime is high because the outlook on JPY pairs for this month of August is bearish. This forecast is concluded with the quote below: “Now I embrace the uncertainty and design my processes so as to have the potential to thrive in the uncertainty. I want to accept winners and cut losses short in an uncertain world, and I want to do it repeatedly without desire to know the future.” – Markham Gross

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 10 “Negativity is real, but consistent loss is optional.” – A.M. Name: John Arnold Year of birth: 1974 Nationality: American Profession: Retired funds manager, investor and currently a philanthropist Career Raised in an upper-class home, in Texas, USA, John’s dad was an attorney and his mom was an accountant. While John was still a teenager, he lost his precious dad. In 1995, he earned a Bachelor’s degree in Economics and Mathematics from Vanderbilt University. He started a great career at Enron, enjoying rapid promotion, owing to his ability to make huge profits for the company. There was a year in which he made 0.75 billion USD for his company and as a result, he was given 8 million USD as a bonus in that year. Since then, some people have called him “king of natural gas trading.’ After Enron folded up in the year 2002, John started his own firm with his bonus money. The firm, named Centaurus Advisors, LLC, became rapidly successful. Its assets grew to over 3 billion USD and it attracted some of the best traders around. The firm was based in Houston and it specialized in trading energy products. That was John’s edge. At the age of 38, John suddenly announced his retirement from active funds management. At least, he’s extremely rich, for he’s invested a lot. He’s now doing what he also enjoys – philanthropy – donating to various interesting causes. John has touched many lives through his generosity and many more lives would be touched. As of March 2013, he was worth 2.8 billion USD. He’s married to Laura Muñoz and they got 3 kids. Insights: 1. Some entered the trading world because they are in pitiful situations and they want to get out. There are also some people like John, who’re not from poor families. They entered the world of trading because the like the challenge and become richer than they ever thought could be possible. 2. John started his trading career while young, and he became a billionaire while still young. He retired in his late 30s. This emphasizes the fact that it’s better to start trading while young. John retired at the age of 38, but he gets richer and richer, because of his investments. He’s now engaged in activities that he likes. Are you working to survive, or are you really engaged in what you like doing, and as a result become financially free? You can retire any time you like, either early like John Arnold, or late like Stanley Druckenmiller. 3. You shall continue to make progress, irrespective of peoples’ criticisms. Some people now criticize John for what he currently does; yet he does what he thinks is right. 4. One of John’s secrets is that he specialized in what he could do best. If he tried other things, he mightn’t be as successful as he’s. Some people lose money as stock traders, while making money with futures. Some people lose money with options but make money with Forex. Some people lose money trading popular majors but make money trading exotic pairs. Some people make money with discretionary approaches but lose money with mechanical approaches, and vice versa. Please find out what markets/trading instruments work for you and stick to it. 5. It’s true that the market is risky, but continual losses are only a matter of choice. You can stop losing in the market if you want. 6. Look at his quote below, John liked to buy at troughs and sell at peaks: with great success. Please think about that. This article is concluded with a quote from John: "I try to buy things whenever they're trading below what [our] analysis shows to be fair value and sell things whenever our analysis shows that the forward curve is higher than our analysis of fair value."

Here’s the market outlook for the week: EURUSD Dominant bias: Bearish Although the dominant bias is bearish, this pair made some commendable bullish attempts last week. Price moved upwards by almost 200 pips, testing the resistance line at 1.1000. That resistance line is an important price area, since it must be broken to the upside for the current bullish effort to continue. Should that occur, a subsequent break of the resistance lines at 1.1050 and 1.1100 would result in a clean bullish bias. On the other hand, any failure of price to break the resistance line at 1.1000 to the upside could result in a serious bearish movement. USDCHF Dominant bias: Bullish Last week, USDCHF was able to maintain its bullish stance in spite of the fact that EURUSD was also making bullish effort. This is one of rare occasions in which EURUSD and USDCHF would be going in the same direction in the short-term. However, things will soon go out of balance and the pairs would go their separate ways. USDCHF might go further upwards, but this would be challenged by the resistance levels at 0.9650 and 0.9700. In fact, it is highly probable that CHF may gain serious stamina before the end of this month (this would also affect other CHF pairs), and thus cause USDCHF to fall smoothly. GBPUSD Dominant bias: Bearish This mercurial currency trading instrument experienced a southwards movement last week. There is a bearish signal in the market: which would be valid as long as the distribution territories at 1.5650 and 1.5700 are not breached to the upside. In case those distribution territories are overcome, the current bearish signal would be rendered illogical. USDJPY Dominant bias: Bullish This market traded sideways last week, though the bullish trend on it is not yet over. Should the market move sideways again throughout this week, it would enter a neutral territory. Nevertheless, price could soon go out of balance, resulting in a serious trending move. Yen can become very strong before the end of this month – causing other JPY pairs to tumble – and it can also cause USDJPY to go bearish. EURJPY Dominant bias: Bullish From the demand zone at 134.50, this cross moved upwards by over 150 pips, slamming into the supply zone at 136.00. This has caused a Bullish Confirmation Pattern in the market, but it is a confirmation pattern that might be short-lived, since Yen can become very strong before the end of the month, causing bears to dominant the market. This forecast is concluded with the quote below: “… No system or set of trades is either winning or losing, they are only so with respect to the position sizing (or money management) that was applied… We have every tool we can long for to control risk while adding to our winners.” - Dirk Vandycke

Here’s the market outlook for the week: EURUSD Dominant bias: Bearish EURUSD dropped by 280 pips last week, going below the resistance lines at 1.0950 and 1.0900. The resistance line at 1.0900 (and of course the resistance line at 1.0900) was an adamant obstacle to bears’ interest. Now that the obstacle has been overcome, the next targets for the bears are the support lines at 1.0800 and 1.0750. The aforementioned resistance lines should server as obstacles to bullish attempts this week, for their breach would mean a threat to the current bearish outlook. USDCHF Dominant bias: Bullish This pair went north by over 200 pips last week, going above the support levels at 0.9500, 0.9550 and 0.9600. The support level at 0.9500 (which was formerly a resistance level) really proved obstinate for the bulls because it opposed bullish effort for over 2 weeks while the bulls kept on besieging it. Once the opposition was overcome, price was able to rally smoothly. Since price has closed above the support level at 0.9600, it is possible that the resistance levels at 0.9650 and 0.9700 will be aimed at. This bullish bias might go on till the end of the month, but things could change in the wake of a strong stamina in CHF, which is expected by the end of the month. GBPUSD Dominant bias: Bullish Cable rose significantly last week, battering the distribution wall at 1.5650. Bears have been fighting back at that distribution wall, making it hitherto impossible for bulls to breach it. Nevertheless, the bulls have continued to struggle for supremacy, and that is the reason behind the current consolidation in the market. Price shall go out of balance this week, and it is most probable that the bulls would overcome. USDJPY Dominant bias: Bullish Since testing the demand level at 120.50, this currency trading instrument has gone upwards by 350 pips. The persistent bullish movement has put an end to the recent neutral outlook in the market – for the outlook is now bullish. However, price needs to go towards the supply level at 124.50 and break upwards through it; otherwise there could be a massive bearish correction this week or next week. EURJPY Dominant bias: Bearish This cross would continue to go south as EURUSD keeps going south. The only hope of a meaningful rally here is an event in which the Euro becomes very strong; otherwise price would continue to drop further and further (whether speedily and gradually). This bearish force is formidable here, coupled with the expectation of a massive gain in the Yen itself around the end of this month. This forecast is concluded with the quote below: “What makes trading so fascinating and, at the same time, difficult to learn is that you really don’t need lots of skills; you just need a winning attitude.” – Mark Douglas

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 9 “The best strategy loses its effectiveness when you trade from a place of fear.” - Mercedes Oestermann van Essen Name: Lawrence D. Hite Nationality: American Profession: Funds manager, trading systems developer, philanthropist Career: Larry Hite is an award-winning funds manager who’s one of the forefathers of trading strategies. In 1981, he co-founded Mint Investments, and several years later, the firm became the most successful of its kind (at that time). He was featured in Jack Schwager’s book titled Market Wizards. Larry also partnered with Man Group and started some ground-breaking trading concepts – which also proved successful. In the year 2000, Larry shifted gears and focused on other things that also mattered to him, including family, investing, funds management and philanthropy. For instance, he founded his own foundation, called The Hite Foundation, which he heads. One source says he also serves as chairman of the Development Committee for the Institute of International Education’s Scholar Rescue Fund, whose goal is to provide safe haven for academics and professionals who are at risk throughout the world. Insights: 1. No matter how great your trading method or analysis is, no matter how much information you’ve or how much knowledge you’ve, you can open a position and still experience negativity. Always see a new trade as a potential loser. Don’t think of how much you can make, but think of how much you can actually lose. With that mindset, you’ll risk as low as possible and trade defensively, thus ensuring your safety. What you can determine is how much you’ll lose; you can’t determine how much you’ll gain. 2. Protect your wealth. Protect your capital. You need capital to play the markets, and without playing the markets, you can’t make money. Without your capital, you can’t play the markets, and that’s why you need to protect your capital. 3. When you’ve a good system, please be faithful to it. It can’t work always, but try to never deviate from it. Make this a hard-and-fast rule. 4. Always respect the market; otherwise, you’ll suffer for your stubbornness. Go with the flow. 5. Larry says this: “I have a cousin who turned $5,000 into $100,000 in the option market. One day I asked him, "How did you do it?" He answered, "It is very easy. I buy an option and if it goes up, I stay in, but if it goes down, I don't get out until I am at least even." I told him, "Look, I trade for a living, and I can tell you that strategy is just not going to work in the long run." In his next trade he put his money in Merrill Lynch options, only this time, it goes down, and down, and down. It wiped him out.” Lesson: Simply cut your loss. Never allow it to run. 6. What you call markets are really risks, rewards, money and means to financial freedom. When risks are controlled and the flow of the markets is respected, things will work for you as traders. 7. Many speculators may have different kinds of stories to tell, but the truth is that we’re all speculators. We’re the same. We all have access to a level playing field. Conclusion: All challenges we face in trading have their hidden blessings; but we’re often blind to the blessings and allow disappointment, ire and fear to take control of our lives when a position doesn’t do what we want it to do. One expert advises that trading should be treated as another splendid opportunity to learn something and improve our skill. We shouldn’t concentrate on money alone. This article is ended with two quotes from Larry: “There are just four kinds of bets. There are good bets, bad bets, bets that you win, and bets that you lose. Winning a bad bet can be the most dangerous outcome of all, because a success of that kind can encourage you to take more bad bets in the future, when the odds will be running against you. You can also lose a good bet, no matter how sound the underlying proposition, but if you keep placing good bets, over time, the law of averages will be working for you.” “I met the guy who wrote this best seller now called, Bringing Down the House, it's about these MIT guys who beat the blackjack tables. And part of the problem, if you're going to be a blackjack counter is that the casinos don't like you. They actively don't like you. And they come and tell you in rather strong things to take your business away. Well, the beautiful thing about the markets, they don't like you, they don't dislike you, they just don't care. They are there everyday. You want to play, you can play.”

GOLD (XAUUSD) Dominant Bias: Bearish Gold remains a bear market, with the price breaking more and more support levels gradually. In this market, occasional rallies should be seen as opportunities to sell short when the price is high in the context of the downtrend. This month, bears would try to target the support levels at 1150.00, 1140.00 and 1130.00 respectively. The expectation would be valid as long as the resistance level at 1190.00 is not overcome by bulls. Therefore, long trades are not recommended this month, unless the aforementioned resistance level is breached to the upside and price closes above it. SILVER (XAGUSD) Dominant Bias: Bearish Since May 2015, Silver has been in a perpetual downtrend; though slowly and gradually. Price would move sideways for some time, and then break out to the downside, and then move sideways for some time, and then break out to the downside again. Long trades are currently illogical in this market, unless the supply level at 17.0000 is overcome (and price trends further upwards from there). Without this condition being fulfilled, any upwards bounce this month could be a decoy for the unwary bulls, as this is the market in which bears thrive. The demand levels at 15.0000 and 14.0000 could be tested easily this month.

Here’s the market outlook for the week: EURUSD Dominant bias: Bearish Current events in the Eurozone will continue to shape the movement of EURUSD and other EUR pairs this week. Last week, price opened with a gap-down of about 200 pips before an upward bounce of over 300 pips occurred on Monday. On Tuesday, price began to go south and tested the support line at 1.1050 on Wednesday. After that, price consolidated till the end of the week. This week, EURUSD and other EUR pairs could open with gaps, and of course, the gaps would be followed by strong movements in case they occur. The outlook on EURUS D is bearish: unless the resistance line at 1.1250 is overcome, further southward movement is expected. USDCHF Dominant bias: Bullish This currency trading instrument traded downwards on Monday, reaching the support level at 0.9250. Form that level, price went north by 250 pips, testing the resistance level at 0.9500. Once the resistance level was tested, a bearish correction took price lower by another 100 pips. Last week, price closed around the support level a 0.9400, but it is likely that price would rally again. The bias is bullish as long as the support level at 0.9250 is not breached to the downside. GBPUSD Dominant bias: Bearish Following the recent sideways movement, Cable broke out to the downside, going below the distribution territory at 1.5600. The accumulation territory at 1.5500 is an easy target for bears, for there is a clean Bearish Confirmation Pattern in the market right now. Should price go further southward, another accumulation territory at 1.5400 would be attained. However, this does not rule out the possibility of rally attempts. USDJPY Dominant bias: Neutral There is not yet any significant movement on USDJPY, as price only oscillates between the supply level at 124.00 and the demand level at 122.00. The present market condition is thus great for scalpers and intraday traders, but not for swing and position traders. Eventually price would either break out above the supply level at 124.00 or below the demand level at 122.00, after which there would be a significant movement. It should be noted that the most probable direction for July 2015 is bearish. This is also true of most other JPY pairs. EURJPY Dominant bias: Bearish At the open of the market last week, this cross experienced a gap-down of about 400 pips as it slammed into the demand level at 134.00. Immediately after this, price rose sharply by over 400 pips, testing the supply zone at 138.00. Price then got caught in an equilibrium phase for the rest of the week. This week, the conditions of the Eurozone will also determine what happens on this cross, because whatever happens to EUR/USD will cause almost identical movement on this cross. A southward movement is most likely. This forecast is concluded with the quote below: “Give the market time to develop once you have defined your stops and profit targets. You cannot control the market anyway. It is certainly no coincidence that we have had reports from many traders telling us that they have not only achieved better results with simple no-frills trading, but have also felt better.” – Marko Graenitz

Here’s the market outlook for the week: EURUSD Dominant bias: Bearish Because of the events in the Eurozone, EUR pairs might open with gaps this week and in case the gaps happen, they would harbinger great volatility in the markets for the rest of the week. EURUSD trended downwards in the beginning of last week, and later moved sideways till the end of the week. The bias is bearish and a bearish breakout is possible at the end of the current sideways movement. The possible breakout would happen when the support line at 1.1150 is broken to the downside as price goes further downwards to other support lines at 1.1050 and 1.1000. A movement above the resistance line at 1.1300 would render this expectation invalid. USDCHF Dominant bias: Bullish This pair trended upwards in the beginning of last week, and later moved sideways till the end of the week. The bias is bullish and a bullish breakout is possible at the end of the current sideways movement. This week, the sanguine bulls would try to keep price moving upwards, and so, the possible breakout would happen when the resistance level at 0.9400 is broken to the upside as price goes further upwards to other resistance levels at 0.9450 and 0.9500. On the other hand, a movement below the resistance line at 0.9200 would render this stated possibility illogical. GBPUSD Dominant bias: Bullish Cable came down by roughly 200 pips last week – a threat to the extant bullish bias. Price then moved in an equilibrium phase till the close of the market on Friday, June 26, 2015. There is now a very high probability that this market (and most other GBP pairs) would become seriously weak, starting from this week and in the first half of July 2015. The current bullish bias would be valid only as long as price is above the accumulation territory at 1.5650. USDJPY Dominant bias: Neutral This trading instrument is currently consolidating. Price is generally moving/oscillating between the supply level at 124.50 and the demand level at 122.50. It would normally be expected that price would eventually break above the aforementioned supply level or demand level, paving way for a sustained trending move. A strong southward movement is highly possible in the month of July 2015. EURJPY Dominant bias: Bearish Just like EURUSD, this cross first trended downwards last week before moving sideways. Whatever happens to Euro (such as gaps, strong movement), would have similar impact on this cross. There is a Bearish Confirmation Pattern in the market and a strong bearish trend is probable in July. This forecast is concluded with the quote below: “When you trade from a carefree state of mind, everything about your trading changes. Remember, that the primary skill that we are talking about here is simply trading without fear. This is a trading skill. It is the primary trading skill that you will have to acquire to create consistency – to trade without fear.” – Mark Douglas

Here’s the market outlook for the week: EURUSD Dominant bias: Bullish EURUSD first consolidated last week; then it broke upwards, closing above the support line at 1.1300. The bias is still bullish and price could test the resistance lines at 1.1450 and 1.1500. Failure to do this could lead to a drop in the price, and therefore, the condition of USD would be the greatest determinant of the movement of EURUSD for the rest of this month. Only a significant weakness in USD may help EURUSD maintain its current bullish bias. USDCHF Dominant bias: Bearish This pair was able to break below the resistance level at 0.9250 (which bears could not breach in the first two weeks of June 2015). Since then, price has moved below another resistance level at 0.9200. The support level at 0.9150 was tested last week and it could be tested again, especially with more selling pressure in the market. That support level could even be breached to the downside. GBPUSD Dominant bias: Bullish GBP is really strong, and the evidence can be seen on most GBP pairs. Cable moved upwards by 350 pips last week, and it has moved upwards by 650 pips this month. The distribution territory at 1.5900 is currently being besieged and it might end up being slashed by bulls. Another possible target is the distribution territory at 1.5950. However, Cable must now be approached with caution because it is possible that the pair would become weak before the end of this week or this month. USDJPY Dominant bias: Bearish This market first moved sideways last week. On June 17, there was a false bullish breakout, which made the market go upwards by 100 pips before bears came in to force it lower. The market is now close to the demand level at 122.50, which may be breached to the downside anytime. It should be borne in mind that this market is expected to trend lower and lower in the month of July 2015: hence any rallies in the short-term could well bring short-selling opportunities. EURJPY Dominant bias: Bullish This cross did not make any large movement last week, though the outlook remains bullish. The bullish outlook itself is not very strong. So, any movement below the demand zone at 138.00 would mean the end of the bullish outlook, leading to a Bearish Confirmation Pattern in the market. This is a condition that would signify the bearish power on the cross. This forecast is concluded with the quote below: “My opinion is that traders who have long been around and keep learning, will establish themselves automatically.” – Dr. Brett N. Steenbarger

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 7 “I appreciate the opportunity to manage money for others. A lot of people don’t enjoy it, but I do.” – Mike Melissinos Name: Sam Zell Date of Birth: September 27, 1941 Nationality: American Occupation: Business magnate, investor and philanthropist Career Sam’s parents were Jewish immigrants who left Poland to settle in the States before the outbreak of the World War II. Sam was born in Chicago and he attended Highland Park High School in Highland Park, Illinois. He obtained a BA from the University of Michigan and later, he obtained a JD (Juris Doctor) from the University of Michigan Law School. In 1967, Sam founded Equity Group Investments. Bob Lurie Robert H. Lurie joined him and they worked together to transform the firm into a vast business empire. Lurie died in 1990, but the business continues to grow and grow and grow. One source confirms that the majority of Sam Zell’s investment portfolio ranges across industries such as energy, logistics, communications and transportation, but he is often best known for his pioneering role and stewardship in creating the modern commercial real estate industry. Moreover, EGI’s holdings also include fixed-income investments in public and private companies. Sam is involved in various international and local causes, donating generously to them, including education. He’s blessed with 3 children. As of January 2015, Sam was worth about $4,900,000,000. Insights: 1. Good traders and investors are able to tackle the uncertainties in the markets, solving the problems of the unpredictable nature of the markets in simple ways. That’s the secret of our ongoing success. We make complex problems (that put off people from the markets) look simple. We simplify these problems and come with simple solutions. That’s exactly what Sam has been doing in decades – unraveling the mystery of various markets and amassing huge wealth by doing so. 2. There’s one though-provoking quote on Egizell.com, which says: “Solid business strategy is not anchored in suit, or a tie. It comes from the gut. Corporate culture can’t be dictated. It comes from the soul. A great company comes from the heart.” How true is it! 3. The qualities of a good trader aren’t measured by her/his attitude when things are right, when things are fine, and during winning streaks; but when the road is rough, tough and during losing streaks. Conclusion: Winning strategies are the ones that go contrary to the expectation of the public, and that’s why it takes serious discipline to follow such strategies. We want to follow good strategies when they work and when they don’t work. This article is concluded by a quote from Sam: “The reality is that I need to be challenged and interested, as long as the risk and reward is in line.”

Here’s the market outlook for the week: EURUSD Dominant bias: Bullish This pair is still in a bullish mode in spite of the effort of bears to pull price down. There are support lines at 1.1100 and 1.1050 and a downside breach of the support lines would result in a new bearish outlook. There are also resistance lines at 1.1400 and 1.1450: an upside breach of those resistance lines would result in further confirmation of the existing bullish mode. However, even if the market moves further upwards, it is more likely that it would become weak by the end of this week or before the end of this month. USDCHF Dominant bias: Bearish On USDCHF, last week was characterized by desperate struggles between the bull and the bear. The bear is still strong enough to check the bull from realizing his objectives and as such, the bias on the market remains bearish. A movement below the support level at 0.9250 would result in a stronger bearish propensity, especially when price closes below the support level and moves further south towards another support level at 0.9200. This is because price could not close below the support level at 0.9250 last week, and a movement below it would mean that the bear is stronger. However, any significant weakness in EURUSD, which may happen before the end of this month, would cause USDCHF to rally seriously. GBPUSD Dominant bias: Bullish Cable rallied by 300 pips last week, rising from the accumulation territory at 1.5250 and closing above the accumulation territory at 1.5550. Further upward movement is possible, enabling price to reach the distribution territory at 1.5700. However, a strong bearish trend is anticipated on Cable (and other GBP pairs) before the end this week or this month. This bearish trend might also be in force in most of July 2015. USDJPY Dominant bias: Bearish This currency trading instrument has already gone bearish – though the bulls are fighting a losing battle to reverse the trend. Price tested the demand level at 122.50, and then bounced upwards. Though a movement above the supply level at 125.00 could challenge that new bearish signal, the upward bounce could also bring an opportunity to sell short at a better price. In case of further southward movement, price could breach the demand levels at 122.50 and 121.50 to the downside. EURJPY Dominant bias: Bullish On Friday, June 12, 2015, this cross closed at 139.00. The outlook on the market is currently bullish, though threatened. Price needs to move upwards in order to save the bullish outlook. A breach of the demand zone at 138.00 could result in a Bearish Confirmation Pattern, and as such, price should not go below that demand zone; otherwise the recent bullish outlook would be rendered invalid. This cross, plus other JPY pairs, has a high probability of becoming weak by the end of this month and in most of July 2015. This forecast is concluded with the quote below: “…The only truth is the chart. Don't ever listen to the news without looking hard and long at the chart. The chart is the truth. Nothing else is the truth.” – Scott Brown ]