* Fears over Italian politics spur flight-to-quality
* Cyprus crisis sends jitters through Slovenian debt market
* No reaction to North Korea sabre-rattling
* Yen shows limited reaction to weak Japan output data
* Focus on BOJ meeting, some see risk of disappointment
By Sophie Knight and Hideyuki Sano

TOKYO, March 29 (Reuters) - The euro hovered near a four-month lows on worries that losses suffered by Cypriot depositors may unnerve investors in other euro zone debt and on Italian political woes, but market participants also said the single currency seems to have found a bottom for now.
Trade was, however, subdued with many markets closed for Easter holidays, and there was limited reaction to North Korea putting its missile units on standby to attack U.S. military bases in South Korea and the Pacific.

The common currency lost 0.1 percent to $1.2805, giving up modest gains earlier in the session. It is down 2.9 percent since January and on course to mark its first quarterly decline since the April-June period in 2012.
The common currency has major support around $1.2680, a 61.8 percent retracement of its July-February rally, though a break there is likely to open the way for a test of last year's low near $1.20.
Market participants said the euro was gaining support from month- and quarter-end positioning, as well as buying on dips from U.S. hedge funds taking long positions.
"Today we have neither strong buying or strong selling pressure, so I think it's close to bottoming out," said Kenichi Asada, manager of forex at Trust & Custody Services Bank.
In Cyprus, banks reopened for the first time in almost two weeks without causing a feared run on deposits, though the country conceded tight capital controls would remain in force longer than expected, likely for about a month.

There was no hint of a breakthrough in Italy's political stalemate, with centre-left leader Pier Luigi Bersani's failure to find a way out of the deadlock prompting President Giorgio Napolitano to go in search of another solution.
In a sign that investors are shifting funds back to safe-havens, the 10-year German Bund yield fell to an eight-month low, while Slovenia's government bond yields have jumped over 100 basis points since last week.

Slovenia is seen as a potential candidate for a future euro zone bailout due to the bad loans hampering its banking sector, according to a Reuters' poll.
"The euro appears to be stabilising just for now, but European bond markets are clearly showing a rather different picture," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
The dollar lost 0.2 percent against a basket of currencies to 83.029, also hurt by a rise in U.S. jobless claims and a pullback in the pace of Midwest business activity. The greenback hit an eight-month high of 83.302 on Wednesday.
The Aussie moved a smidgen higher, adding 0.1 percent to 1.0427 after dropping 1 percent between a two-month high of 1.0497 struck on Tuesday and Thursday's low after a slide in Chinese shares.
"We have a lot of clients who are eagerly watching the Aussie and who want to buy it on this pullback," said Asada of Trust & Custody Services.
GUTSY EASING?
The greenback slipped 0.1 percent against the yen to 94.030 as the last trickle of repatriation flows from Japanese exporters tussled with yen bears hoping for an explosive change in monetary policy next week.
Expectations of gutsy easing from the Bank of Japan at its monetary policy review on April 3-4 have left the dollar poised to record an 8.4 percent quarterly gain against the yen, which would mark its first gain for two straight quarters since 2009.
With so much focus on the BOJ's policy meeting on April 3-4, the first one under new Governor Haruhiko Kuroda, the yen showed a muted response to a barrage of Japanese data out on Friday, including disappointing industrial output.
Market players expect Kuroda to scale up the BOJ's bond buying and to extend the maturities of the bonds it purchases. But speculation on the scale and content of that easing has ramped up the risk of disappointment, analysts say.
"I expect the yen to gain after the BOJ meeting next week. So much has been said about aggressive easing already and I can't expect anything new," said Sumitomo Bank's Uno.
The U.S. currency has strong support at 93.78, the kijun line from its daily Ichimoku chart. It has not closed below this line since mid-November, when investors started to bet Japan would pursue aggressive monetary easing.

Martin S. Schwartz, known in the stock trade as Buzzy, is a formidable day trader who serves as example to virtually all aspiring stock traders. His first year as an independent stock trader netted him $600,000; he doubled this figure in the following year. Schwartz is quoted as revealing that he used to make about $70,000 per day trading, and on one day he actually netted several million dollars. As his frenetic trading consumed his life, a health related wakeup call forced him to slow down, and he has lived in a self imposed semi retirement and only participates in scaled backed trading from his Florida home. Martin Schwartz began his career with an education from Amherst College and later on Columbia University.

After a stint in the United States Marine Corps, he went to work as a financial analyst for E.F. Hutton. Once he saved up $100,000, he quit and used the money to buy himself into the American Stock Exchange as an active but independent trader. Schwartz became a formidable trader who worked with options, futures as well as stocks. After 12 months of trading independently, he reported earnings of $600,000; a year later, it was twice that. Fellow traders soon began to notice the frenzied pace with which he changed positions and that he never held on long to any financial instrument. This earned him the moniker of "day trader." Not shy about his fiscal prowess, Martin Schwartz participated in the U.S. Trading Championship that was organized by Stanford University and which consisted of nine matches.

Held in 1984 - at the onset of the day trading craze - he made a spectacular showing and beat out the other participants by earning more money than his competitors did together. This led to the adoption of the day trading model not only by a good many independent traders, but also by do it yourself dabblers at home. It is noteworthy that in a 1998 interview Schwartz alluded to the fact that the market --which was at an all-time high - was likely to have reached a cusp and thus was due for a market correction. Before long this highly successful businessman found himself addicted to the heady thrill of buying and selling at lighting speed, and nearly sacrificed his health and life in the process. Martin Schwartz detailed his accomplishments and also his failures in the book entitled "Pit Bull: Lessons from Wall Street's Champion Day Trader." At this point he lives in self imposed semi retirement and trades in a limited capacity from his Florida home.

In 1975, Stanley Druckenmiller graduated from Bowdoin College where he studied English and Economics, with the desire to eventually to become a professor of those subjects. He began to work on a Ph.D. at the University of Michigan, but left the program to work at Pittsburgh National Bank as a stock analyst in 1977.
After only one year, he became head of the bank's equity research group. He was only 28 years old when he founded Duquesne Capital Management in 1981 with only one million dollars.
Then, in 1985, he accepted a position as a consultant to Dreyfus, compelling him to commute to New York for two days each week. By 1986, he became the head of Dreyfus Fund, with the agreement that he would continue managing Duquesne. In 1988, he accepted George Soros' offer of a position within Quantum Funds, replacing Victor Niederhoffer. Together, the pair "broke the Bank of England" by shorting the British pound, resulting in one billion dollars of profit in a single day.

After 12 years with Quantum Funds, Stanley Druckenmiller left the company to focus on developing Duquesne Capital Management, which has become quite successful. Forbes has Stanley Druckenmiller listed as the 91st richest person in America.

Track Record

In addition to the single day's one billion dollar profit take in 1992, Mr. Druckenmiller has been able to sustain outstanding results over long periods of time. He typically has achieved annual rates of return exceeding twenty-five percent over a 10 year period.
His sense of timing is one of the keys to his success. It has been said that he has an ability to get in and out of positions at just the right time. While Stanley Druckenmiller knew how to bet big, he also knew when it was time to back off.

Helping Others and Enjoying Life

While Mr. Druckenmiller has worked hard at managing multiple funds, he has clearly enjoyed some of the rewards of being the best forex trader in the world. With a 2008 net worth of 3.5 billion dollars, it is no extreme effort for him to maintain a fleet of over 12 different vehicles that are kept at his home at Southhampton. At the Teterboro airport one can find his multi-million dollar business jet, a Bombardier Global Express BD-700.

In addition to enjoying his "toys," Stanley Druckenmiller continues to provide millions of dollars each year to various philanthropic organizations. In 2009, he gave more money to charities than any other American. He also is chairman of the board of Harlem Children's Zone, a community-based, non-profit organization which was founded by a college friend of Druckenmiller's, Geoffrey Canada.

Insights From the World's Best

It's almost impossible to deny that Stanley Druckenmiller's is probably the best forex trader alive. His main focus has been on capital preservation and "home runs." If you stay away from negative return years while achieving some one hundred percent years, your long-term returns will be outstanding.
Druckenmiller also proves that success is not a matter of luck. His consistent returns demonstrate a sound underlying strategy along with the willingness to take occasional risks. His is a trading strategy that worked, and his success offers good insights for all forex traders.

Lawrence D. Hite is a trailblazing investor who actively shaped the upcoming landscape of system trading as early as the 1980s. During his tenure with Mint Investment Management Company, he helped propel the commodity trading advisor to become the very first business in its discipline to report in excess of $1 billion in assets.

In an interview with author Jack D. Schwager for the book Market Wizards, Hite reminisces how he got started in commodities trading. He reveals that his college professor referred to commodities traders as crazy enough to trade on just 5% margins. A sudden realization struck him: it made sense!
While in college, Hite was a rock music promoter and managed musicians’ performances rather than their money. A sometime actor and screenwriter, he eventually got serious about staying with the music business. However, after several incidents caused him to question his career path, he decided to enter the world of investments as a stockbroker in 1968.

It was then that a chance comment made during a job interview set Hite on his path to successful commodities trading: Approach the business as a gambler playing the odds to win, rather than a stock market analyst who stays one step behind the market.

Larry Hite has built a reputation for taking hedge fund management to the next level. He is considered legendary in that he consistently managed to get clients actively involved in the trading method, leading to increased investor commitment to the entire trading process. A 1986 Business Week article jokingly sets him apart from what is termed a stereotypical “wild-eyed” trader in commodities.
The trading philosophy he embraces is as down to earth as it is practical: Larry Hite wants to know what you can afford to lose, rather than what your investment can net him. This differentiates his trading viewpoint from the more aggressive traders who in recent decades managed to reap great profits but also suffer great downward spirals.

Larry Hite cofounded Mint Investment Management Company and carefully grew it into the biggest and most influential commodity trading advisor firm of 1991. Of course, what would a reputation be without the facts to back it up? The Mint Guaranteed Fund – a Series A fund – proved to become a steadily leading frontrunner among 76 other publicly traded commodity funds. Hite also proved that cunning investment strategy, coupled with investor commitment, could benefit more than one fund. The Mint Limited Fund managed to rise 20% in 1986, which also is a rather respectable showing.
Not surprisingly, Hite has been frequently asked to divulge his secrets for success, and one thing that he stresses consistently is the need for diversification and cutting edge technology. Diversification is a means for reducing the risk inherent to trading. Technology, in the form of computerization, largely eliminates the human error component when analyzing data.

Even as far back as 1986 he strongly relied on computer modeling to gain an insight on futures trading in national as well as international markets. Over the course of time, he built a system that placed the investment behaviors of people as a constant, while making the commodities the variables. This simple process ensured not only a clear means of predicting future performances, but also provided him a fairly significant edge when it came to unloading commodities just before they lost substantial percentages of their values.
Hite never diverged from this strategy, and as computers and programs became more commonplace, he upgraded his software to remain on the cutting edge of the business. Back then – just as he does now – he advocated volatility tracking of at least 10 to up to 100 days in order to make an educated investment decision.

In 1994, Larry Hite retired as the hands-on fund manager at Mint. Since his retirement, he has held the position of managing director of Hite Capital LLC.

The Standard & Poor’s GSCI gauge of 24 commodities gained 0.4 percent to 657.35 by 5:24 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was up 0.4 percent at 1,551.608.

CRUDE OIL

West Texas Intermediate oil fluctuated after a government report showed that U.S. crude inventories surged to a nine-month high as fuel supplies dropped more than analysts forecast.
Crude oil for May delivery decreased 1 cent to $96.33 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 15 percent below the 100-day average.
Brent oil for May settlement rose 30 cents, or 0.3 percent, to $109.66 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 24 percent above the 100-day average. The European benchmark was at a $13.33 premium to WTI after ending yesterday at $13.02, the narrowest settlement spread since July.
Oil markets: NI OILMARKET

SOFT COMMODITIES

Orange juice dropped the most in a week after rain in the citrus belt of Florida, the world’s second-largest grower, eased the stress of recent dry weather. Cotton was little changed and coffee fell, while sugar and cocoa gained.
Orange juice for delivery in May slumped 1.4 percent to $1.37 a pound on ICE Futures U.S. in New York and earlier fell as much as 1.7 percent to $1.3655 a pound. Prices through yesterday were up 18 percent this year.
Also in New York, cotton futures for May delivery were little changed at 81.10 cents a pound. Arabica-coffee futures for delivery in May slipped 0.5 percent to $1.3695 a pound on ICE, the first loss in six sessions.
Cocoa futures for May delivery closed up 0.2 percent at $2,149 a metric ton, while raw-sugar futures for May delivery advanced 0.6 percent to 17.89 cents a pound.
Soft commodities markets: NI SOMKTS

BASE METALS

Tin and lead fell in London, leading declines by industrial metals, as a bailout for Cyprus and political deadlock in Italy stoked concern that the euro-area debt crisis threatens to curb demand.
Tin for delivery in three months dropped 0.6 percent to $23,000 a metric ton at on the LME. Lead fell as much as 1.7 percent to $2,095 a ton, the lowest since Nov. 5. Copper slid 0.1 percent to $7,615 a ton in London.
On the Comex in New York, copper futures for delivery in May were unchanged at $3.443 a pound.
Base metals markets: NI BMMKTS

LIVESTOCK

Hog futures fell, halting the longest rally in nine months, on speculation that U.S. meatpacker purchases are slowing before the holiday weekend. Cattle rose.
Hog futures for June settlement declined 0.9 percent to 90.275 cents a pound on the Chicago Mercantile Exchange. The price rose in the previous five sessions, the longest rally since June.
Cattle futures for June delivery climbed 1 percent to $1.224 a pound in Chicago.
Feeder-cattle futures for May settlement advanced 1 percent to $1.419 a pound on the CME.
Livestock markets: NI LVMKTS

GRAINS, OILSEEDS

Wheat alternated between gains and losses in Chicago, heading for a quarterly decline, before a U.S. government report tomorrow that may show stocks of the grain fell less than those of corn and soybeans.
Wheat for delivery in May rose 0.9 percent to $7.3825 a bushel on the Chicago Board of Trade after adding as much as 1 percent and retreating as much as 0.5 percent. Milling wheat for delivery in May traded on NYSE Liffe in Paris rose 0.5 percent to 246.25 euros ($314) a metric ton.
Corn for delivery in May rose 0.4 percent to $7.3325 a bushel in Chicago. The grain is up 5 percent this quarter. Soybeans for delivery in the same month, set for a 2.8 percent quarterly gain, added less than 0.1 percent to $14.485 a bushel.
Grains markets: NI GRMKTS

PRECIOUS METALS

Gold futures fell for the third straight session after the Cyprus bailout curbed demand for the metal as a haven.
Gold futures for June delivery dropped 0.4 percent to $1,600.50 an ounce at 10:50 a.m. on the Comex in New York. Volume was double the average in the past 100 days for this time. The metal headed for the second straight quarterly loss, the longest slump since 2001.
Silver futures for May delivery dropped 0.4 percent to $28.705 an ounce on the Comex.
Precious metal markets: NI PCMKTS

OIL PRODUCTS

Heating oil futures rose as inventories of distillates slid last week the most since November 2011 and demand increased. Crack spreads widened.
Heating oil for April delivery rose 1.81 cents, or 0.6 percent, to $2.8994 a gallon on the New York Mercantile Exchange.
Heating oil crack spreads widened as crude supplies rose to the highest level in nine months. May heating oil traded at a $30.75-a-barrel premium to West Texas Intermediate crude, up from $29.61 yesterday. The spread over Brent crude on ICE Futures Europe increased 89 cents to $17.48 a barrel. below a year ago.
Gasoline for April delivery declined 0.76 cent to $3.103 a gallon. Trading volume was 6.4 percent below the 100-day average for the time of day. Gasoline has gained 6.5 percent in March and 10 percent since December. The more actively traded May contract slipped 0.77 cent to $3.0948. barrel. The spread versus Brent narrowed 21 cents to $20.74.
Gasoline at the pump, averaged nationwide, fell 0.8 cent to $3.65 a gallon, AAA said today on its website. Prices have dropped for the past seven days and are 24.8 cents below a year ago.
Oil Products Europe: NI OPEMKT Gasoline: NI GASOLINE Heating oil: NI HEATOIL

NATURAL GAS

Natural gas futures advanced to an 18-month high in New York on forecasts of colder-than-normal April weather that would increase heating-fuel demand, widening a year-on-year inventory deficit. where we started.’’
Natural gas for May delivery rose 5.8 cents, or 1.5 percent, to $4.049 per million British thermal units on the New York Mercantile Exchange.
U.K. natural gas: NI NUKMKT Gas market: NI GASMARKET Americas natural gas: NI AGASMARKET European natural gas: NI EGASMARKET

Jesse Lauriston Livermore was an active trader during the famous stock market crashes of 1907 and 1929. He amassed a personal fortune totaling more than $100 million in 1929, and just a few short years later lost it all. In the course of his career he lost millions of dollars just as quickly as he earned them. Yet even decades after his suicide, his legacy is much sought after and although some disregard him as merely a stock trader dealing in hype and cashing in at the top, there are others who refer to him as an intuitive and gifted stock market genius.

At the tender age of 14, Jesse Livermore saw the inside of Paine Weber & Company for the first time. As a lowly clerk in 1891, his job consisted in transcribing stock prices from ticker tape to an actual board. Guessing on various trades’ profitability on intuition, he began betting on actual stock trades, and at the age of 15 he earned his first $1,000.

Jesse Livermore eventually left Paine Weber but continued to bet on stocks. By age 20 he managed to earn $10,000. When at the age of 21 he joined the New York Stock Exchange, however, he was not nearly as profitable trading stocks as he was betting on them. By the age of 22 he lost all of his money and had to request a loan to continue trading. At the age of 23 he started trading with $50,000 and at the end lost it all. Livermore blames the slow speed of the ticker for his fiscal demise.

Over the course of the year, Jesse Livermore learned to rely more on his hunches than the ticker tape, and through a shrewd short sale in 1907 he makes $1 million. By 1908 he is once again broke. After a bankruptcy in 1914, Livermore returns to trading and in 1916 amasses $3 million. He continues trading and in 1929 once again anticipates the market and sells short, making a huge profit of $100 million, yet in 1934 he is bankrupt for a second time. Six years later, Jesse Lauriston Livermore dies by his own hand.
Today’s stock traders look to Livermore as the quintessential, indomitable do it yourself millionaire who did not invest in costly courses or college educations, but instead learned stock trading on the job. As odd as his frequent wins and losses may sound, modern stock traders embrace the fact that hard work, intuition, and also a labor intensive study of the market can give virtually anyone the chance to realize a profit.

Of special interest are his innate abilities to profit during the 1907 and then also 1929 crashes. This skill, if stock traders could apply it today, would have preserved many a trader’s portfolio. Another important aspect of Livermore’s trading philosophy was the lesson to not look to insider tips as a surefire means of reading the market. Jesse Livermore attempted to do so – to his detriment – a number of times, and as such the lessons of his life are a powerful teaching tool for new traders.

Some have gone so far as to distill the lessons Jesse Lauriston Livermore taught them, and perhaps the most famous line is the one which encourages would-be traders to be in touch with their strengths but much more so with their weaknesses. Livermore’s legacy is one that counsels those who come after him to learn from their mistakes and realize that these mistakes are the opportunities for real learning. Successes, such as his multi million dollar trading profits, do not provide for real learning opportunities.

Jack D. Schwager first entered the market in 1971. Since then, he has become a highly respected director of futures research and also a well known profiler of investment greats – many of whom he met while trading for Commodities Corporation. As a profiler, he has penned a number of successful books, such as “Market Wizards” – a term that spawned a whole Wall Street Wizard series – and also “Getting Started in Technical Analysis.” He has since made his mark in the hedge fund industry where he applies many of the lessons learned from his interviews and successfully manages the Fortune Group's Market Wizards Funds.

In 1971, Jack D. Schwager joined Reynolds Securities for a period of two years. With his MA in economics firmly in hand, he initially worked as a research analyst in a position that allowed him to delve deeply into the movements of the stock market. From 1973 until 1979, he worked as a director in charge of researching futures with the firm of Loeb Rhoades Hornblower. From there it was only a short leap to the position of director of research at Smith Barney, a position that Schwager filled from 1979 until 1983. This position served as a springboard to the famed Commodities Corporation for one year, then in 1984 he joined Paine Webber, and in 1988 Prudential Securities; he remained with this company in a number of positions until 1999.

Jack Schwager and Commodities Corporation are virtually synonymous. Not only did he work for this financial services corporation, but during his tenure he rubbed elbows with a number of investment and trading greats. He familiarized himself with the methods of Ed Seykota, Bruce Kovner, Louis Bacon and also Michael Marcus. After researching their methods and systems, Schwager came to the realization that trading profitably is not random success or the luck of the draw. While compiling his works on Wall Street trading and stock investing – the famous Market Wizards series comprised of “Market Wizards,” “New Market Wizards,” and “Stock Market Wizards” –

Schwager soon noted that savvy trading requires an intimate knowledge of human psychology. Moreover, methodical investing far surpasses kneejerk reactions to market ups and downs when trading.
In a 2003 interview, Jack Schwager revealed that successful stock traders must be disciplined and experienced money managers with an eye on controlling risk; they also must employ methodologies that are in tune with their individual personalities. This seasoned stock trader and author has come to learn that simply applying another investor’s systems or trading methods will not yield similar results, especially if this system does not fit the individual trader’s unique mental and intuitive approach to the stock market.
Jack Schwager opines on his takes on investment strategies and cautions readers not to get caught up in the details of other traders’ successes but instead maintain a steady eye on the underlying current that appears to be synonymous. As such, he cites that virtually all of the successful traders with whom he had a chance to speak would have a well defined ceiling for their position size when it came to the short side. This served as a failsafe and would not allow their portfolios to become unbalanced with a short position that went over a predetermined percentage.

It is Schwager’s take on the reason for so many fiscal losses – especially in recent months and years – that have elevated his books to cult status: with the help of copious interviews and meticulous comparison of facts and data, he suggests that loss prevention is equivalent to disciplined risk control. As such, he cautions traders to not just manage risk, but instead control it from the get go. Schwager urges traders to stay away from staying in a position past the point of reason and overtrading.
He believes that an attempt of regaining losses rather than cutting them leads to a lack of discipline when it comes to risk control, and as such losing investors and traders fail to see market conditions and declines which are obvious to others. Jack Schwager has taken all of the lessons learned from his interviewees and is now applying them to hedge fund management, which he considers to be a viable and profitable alternative to standard investing. Not surprisingly, today he manages the Fortune Group's Market Wizards Funds.

Copper Falls; Rubber; Palm Oil Climbs: Commodities at Close

The Standard & Poor’s GSCI gauge of 24 commodities fell 0.2 percent to 653.57 at 5:09 p.m. Singapore time. The UBS Bloomberg CMCI index of 26 raw materials dropped 0.1 percent to 1,544.742.

CRUDE OIL

West Texas Intermediate traded near a five-week high after U.S. economic data signaled growth in the world’s biggest crude consumer. The nation’s stockpiles of the commodity rose, an industry report showed.
WTI for May delivery was at $95.92 a barrel, down 43 cents, in electronic trading on the New York Mercantile Exchange at 8:23 a.m. London time. The volume of all futures traded was 45 percent below the 100-day average. The contract climbed $1.53 to $96.34 yesterday, the biggest increase since Dec. 26 and the highest close since Feb. 19.
Brent for May settlement slid 34 cents to $109.02 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 19 percent less than the 100-day average. The European benchmark grade was at a premium of $13.16 to WTI futures after closing yesterday at $13.02, the narrowest since July.

OIL PRODUCTS

Asian gasoil is trading below European swaps for a third day. The fuel oil viscosity spread is at the widest in a month.
• Middle Distillates • Gasoil’s premium to Dubai crude rises $1.19 to $15.67 a barrel at 11:43 a.m. Singapore time, according to data compiled by Bloomberg • April gasoil swaps up $1 at $122.08/bbl • April gasoil swap trades 27 cents/bbl below May contract. Market now in contango for a fifth day • April East-West gasoil spread at minus $1.25/mt. Asia prices are below European prices for a third day • Jet fuel regrade at minus 48 cents/bbl • April kerosene swap trades 37 cents/bbl below May contract
• Fuel Oil • Fuel oil’s discount to Dubai crude narrows 7 cents to $6.25/bbl • April 180-cst fuel oil swaps down 39 cents at $636.34/mt • April fuel oil swap trades 42 cents/mt above May contract • Viscosity spread narrows 6 cents to $5.25/mt. The gap is the narrowest since Feb. 28 • April East-West fuel oil spread narrows 13 cents to $28.66/mt
• Light Distillates • Singapore naphtha’s discount to London Brent crude narrows 3 cents to $9.13/bbl • April Japan naphtha swaps down 57 cents at $899.88/mt • April East-West naphtha spread at $13/mt, widest in a week

BASE METALS

Copper for delivery in three months declined 0.3% to $7,600/ton on London Metal Exchange, after rising 0.4%. • Zinc drops 0.4% to $1,898/ton, after rising 0.8% • Lead falls 0.8% to $2,112.50/ton

PRECIOUS METALS

Gold declined for a fourth day, extending the first back- to-back quarterly losses since 2001, as signs that the U.S. economy is recovering cut demand for the metal as a store of wealth. Silver tumbled.
Gold for immediate delivery fell as much as 0.5 percent to $1,592.74 an ounce and was at $1,594.86 at 3:24 p.m. in Singapore. Prices have lost 4.8 percent this quarter as holdings in exchange-traded products contracted 6.8 percent, the most on record. Bullion for June delivery lost 0.2 percent to $1,594.60 an ounce on the Comex in New York.
Silver for immediate delivery slumped as much as 1.8 percent to $28.245 an ounce, the lowest since March 1, and was at $28.315. Prices are set to drop for a second quarter. Spot platinum traded little changed at $1,573.25 an ounce, while palladium lost 0.5 percent to $759.50 an ounce.

GRAINS, OILSEEDS, SOFT COMMODITIES

Wheat, little changed, was set for a second quarterly loss on speculation investors were closing bets on price gains before a U.S. government report that may show stockpiles fell the least, compared with corn and soybeans.
Wheat for delivery in May traded at $7.3175 a bushel on the Chicago Board of Trade by 2:44 p.m. in Singapore, from $7.315 yesterday. The volume was 75 percent below the 100-day average for that time of day. Futures headed for a 5.9 percent loss this quarter, after a 14 percent drop in the previous three months.
Corn for May delivery was little changed at $7.295 a bushel, while soybeans for delivery in the same month fell 0.2 percent to $14.45 a bushel.
Rubber climbed as data in the U.S. yesterday showed companies in the world’s largest economy were expanding capacity, potentially boosting demand for the commodity used in tires.
The contract for delivery in September, the most-active by volume, rose 1.2 percent to close at 282.7 yen a kilogram ($2,983 a metric ton) on the Tokyo Commodity Exchange.
Palm oil advanced for the first time in three days, rebounding from a one-week low, on optimism that demand in China will increase as inventories decline.
The contract for delivery in June gained as much as 1.2 percent to 2,467 ringgit ($796) a metric ton on the Malaysia Derivatives Exchange before trading at 2,451 ringgit at 4:47 p.m. in Kuala Lumpur. Most-active prices touched 2,426 ringgit yesterday, the lowest level since March 20.

Alexander Elder, M.D. is a native Russian who defected to the United States at the tender age of 23. He has since worked as a New York City psychiatrist, Columbia University professor, and expert stock trader. Drawing heavily on his psychiatry background, Dr. Elder was so successful that he is the author of a number of stock trading insider books, and also a much lauded speaker and trainer. It is a little known fact that he began his stock trading experience by buying one stock: KinderCare.
Alexander Elder is an enigma in the world of stock traders; he not only understands the details of the transactions, but also the mindset of the traders before, during and after the business deal. More importantly, he has successfully transferred this knowledge to common market behavior, making him the trader with an edge that those attending Dr. Elder’s seminars eagerly seek to imitate.
According to Alexander Elder, there are three stages to trading:

1. The trader who is technically well versed but devoid of an understanding with respect to the human component.
2. The trader who realizes that in spite of technical knowledge there is no guarantee to success. As such, he will attempt to recreate the mindset and decisions he made during successful stock trades, and avoid those that he made during unsuccessful ventures. Dr. Elder calls this the awakening of a psychological understanding with respect to stock trades.
3. This trader understands that successful stock trading requires control and money management. Rather than letting stats and positions move him, it is the management of the money and the control thereof that causes him to anticipate future positions.

It is interesting to note that – unlike so many other traders turned author – Alexander Elder freely acknowledges that while trading for a living is most certainly a workable lifestyle, it requires an extensive amount of discipline and a significant bit of work before the first trade is even made. This makes it an unsuitable goal for a good many stock traders who are attempting to go it alone. As a matter of fact, when Dr. Elder teaches a seminar, he freely acknowledges that the majority of participants are likely to fail.
He sees his role as a mentor to those stock traders who have the right personality to keep trading. Dr. Elder recalls his epiphany with respect to trading in his book entitled “Trading for a Living.” He remembers that after reading “How to Buy Stocks” there was the definitive moment in time when he realized that there was an entire world of money making out there, of which he was thus far unaware. What is more, Alexander Elder remembers that even though he knew nothing about stock trading, he started out slow, with a stock in KinderCare.
Over time he studies the ups and downs of the market, learned about the intricacies of stock trading, and finally shifted his career focus to trading stocks as well as options. Dr. Elder finally settled on trading futures as the vehicle that is netting him the most income. He decided to practice psychiatry part time, usually after the markets have closed for the day. Alexander Elder is noteworthy for plainly advocating that there is no secret to success when it comes to trading.

Rogue trading makes headlines. In late 2011 an unauthorized trader lost $2 billion for the Swiss-based bank, USB. The idea of a single person losing millions and occasionally billions of dollars is always interesting, but it is even more so when that person is losing other people's money.
In this article we will look at six of the rogue traders (in no particular order) who became famous for their very public losses.

Nick and the Nikkei - $1.3 BillionNick Leeson is probably the most famous rogue trader in the world. He even wrote a book on the subject, which was aptly titled "Rogue Trader" (1996). In 1992, he was the stereotypical rising star and his magic touch allowed him to become the head of Barings operations on the Singapore International Monetary Exchange - all at the tender age of 28.

But, he soon lost his trading touch and started to rack up a number of large losses. He used his position as both the head trader and the one responsible for settling trades in the office to hide his losses in a secret account, which was numbered 88888.

At the beginning of 1995, his trading losses were already significant when he had the enormous misfortune of placing a short straddle on the Nikkei, which was a bet that the market wouldn't make a large move overnight. However, the next day there was an earthquake in Kobe, which sent the Nikkei lower and led to a massive loss In an attempt to recoup these losses, Leeson made large risky bets that the Nikkei would recover quickly form the quake, which it didn't, leading to further losses. (For related reading, see Are Derivatives Financial "Weapons Of Mass Destruction"? and Hedge Fund Failures Illuminate Leverage Pitfalls.)

In the end, Leeson lost an estimated $1.3billion for the bank, which resulted in the bankruptcy of Barings, a bank that had survived for more than two centuries in the industry. Leeson received a six-and-a-half year sentence but was released early for good behavior after being diagnosed with cancer.

John Rusnak and the Yen - $691 MillionJohn Rusnak of Allfirst Financial found failure in the Japanese yen. Initially, from when he was hired in 1993 and up until 1995, when the Asian markets were doing well, so did Rusnak. But, Rusnak started gambling and losing progressively larger amounts as the previously friendly markets turned against him in 1996. By 1997, Rusnak had lost $29.1 million. By 2001, he had lost $300 million. And, in a stroke of incredibly bad luck, he sold over $300,000 in options which brought his total losses to $691 million.

Like Leeson, it was Rusnak's ability to work the regulatory system to conceal his losses that allowed him to do much more damage than should have been possible. In the end, Rusnak received a jail sentence of seven-and-a-half years and is on the hook for paying back the $691 million.

Mr. Copper - $2.5 BillionYasuo Hamanaka, better known as Mr. Copper, was a trader for Sumitomo Corporation. Hamanaka specialized in, of course, copper. He is said to have controlled 5% of the world copper market, but failed in an attempt to corner the market. In 1996, Sumitomo Corp. disclosed $2.6 billion loss on copper trades.

The range of his activities and the time period in which they occurred (a full decade ending with a 1996 conviction and eight-year prison sentence) have raised questions about whether he was a rogue trader or simply a member of a price-fixing conspiracy. His conviction centered on his having forged his supervisor's signature in a letter, but the extent to which he went rogue is still in question.Liu Qibing - $200 Million - $1 Billion (unconfirmed)An even more mysterious 2005 copper caper occurred when Liu Qibing, a man who may or may not have been a metals trader for the Chinese government, took a huge bet (around 200,000 tons) that copper prices were going to fall. However, copper prices rose substantially over the life of the trade as global demand for copper increased, which led to massive losses on the trade.

As the paper trail led back to the Chinese State Reserve Bureau, other traders realized China would have to fill the amount shorted. This drove copper prices up. The Chinese government tried to depress prices by claiming copper reserves five-times larger than previously estimated and, in a bizarre twist, denied that a Liu Qibing had even existed to place a short. The extent of the losses are up for debate, as are the current whereabouts of the ephemeral Liu Qibing.

Brian Hunter and Amaranth - $6.5 BillionHedge fund traders get an easy ride when it comes to rogue trading because they are expected to take big risks, but Brian Hunter of Amaranth should be considered a textbook case.

His gambles in natural gas futures were initially successful, particularly so when Hurricane Katrina wreaked havoc on the infrastructure and pushed prices up while Hunter happened to hold a long position. The huge profits attracted more and more investors to Amaranth, providing Hunter with more capital to gamble with.
Sadly, Hunter's ability to predict the weather turned out to be no more consistent than the TV forecasters' and the natural gas futures turned on him. In one day, on September 14, 2006, Hunter and his colleagues lost $560 million alone. In total, he ended up losing around $6.5 billion, which led to closure of Amaranth. (For more on this, read Losing The Amaranth Gamble.)

Jerome Kerviel - $7.1 BillionSurpassing even Hunter's losses, Jerome Kerviel has set the bar improbably high for future rogue traders. His losses from speculation in European futures cost his employer, Société Générale, more than $7 billion.

As with Leeson and Rusnak, Kerviel was able to manipulate the system using knowledge he gained while working in the office that monitored traders prior to being promoted to a trading position. He made no personal profit from his rogue trading. The 2007 mortgage meltdown probably hastened his fall from grace, but the highly leveraged and unapproved trades were bound to have disastrous consequences.

Conclusion This is a far from complete list. It's missing Robert Criton, the scourge of OrangeCounty, Peter Young and his propensity to wear women's clothes at trials, and many other equally compelling tales. At the heart of all of these, however, is the old tale of hubris. When a trader begins to feel that he or she has a special gift for sniffing out money-making positions, it can be a dangerous situation. Unfortunately, luck is a fickle friend. When these formerly magical traders start losing, they often look for ways to magnifying their bets and win back their losses.

Aside from the financial damages that rogue traders inflict upon the market, they do serve one very important function; they remind us that seeking exceptional returns means taking on equally exceptional risk. There is no magic trick that can change this fact, so an investor has to know how much risk he or she can safely handle as well as when to quit.

here is the bigest Loser List : http://en.wikipedia.org/wiki/List_of_trading_losses 

http://en.wikipedia.org/wiki/Rogue_trader 

There was a quiet start for the current week, with most of the action expected to come towards the end of the week. Yesterday evening we had the Fed’s FOMC interest rate decision and GDP figures from the US. We are still waiting for some major impact data, namely we have payrolls data expected tomorrow. Before I move on to have a look at this week’s major happenings, as we close this first month of 2013, let’s look into the major trends that have so far marked the currency markets this year.
Among the major currencies the JPY tops the list of the biggest loser so far this year. According to the Bloomberg Correlation-Weighted Currency Index, the JPY sheds around -4.40 per cent across a basket of major currencies. A change in government in Japan and some important policy changes coming from the BoJ have contributed to the JPY’s weakness – a weakness welcomed by Japanese export-led businesses.
The JPY was not the only trendsetter however. EUR/CHF had finally distanced itself significantly from the 1.20 floor, as it breached (and so far maintained) 1.24 levels. The Swiss franc in fact loses - 0.76 per cent YTD; on January 18, the EUR/CHF peaked to highs of 1.2569, levels last seen in May 2011.
Yet in reality after the JPY’s hefty losses so far this year, it is Sterling that attracts the largest sell-offs. On the Bloomberg Correlation-Weighted Currency Index it sheds -3.36 per cent across a basket of major currencies.
After gaining around +2.74 per cent against the euro throughout 2012, the GBP has already shed -5.20 per cent ahead of month’s end in this first month alone. Sterling starts to lose its shine as the risks of a eurozone breakdown start to fade away, and the feeling that the worse might be over prevails. While risks were elevated for the eurozone the GBP enjoyed some support on the back of safety flows, as the United Kingdom stood out as a compact fiscal entity when compared to the group of troubled eurozone nations. As these eurozone concerns continue to fade away the game changes for the GBP.
Now that the ECB managed to eradicate the gloomiest outcomes (at least from investors’ minds), the GBP is losing out on these eurozone-motivated safety flows. But other concerns also weigh on the UK’s outlook.
The UK economy contracted by -0.3 per cent and -0.5 per cent respectively in the first two quarters of 2012.
The third quarter’s stronger than expected +1 per cent was well received, but another -0.1 per cent reading for the advanced reading of the fourth quarter starts to raise concerns that the UK’s economic growth may be heading south again. The EUR/USD started the week trading within a relatively tight range, throughout Monday’s session the currency pair only managed a 50 pip range, but the pair nonetheless embraced fresh highs on Tuesday when it hit session highs of 1.3490. Price moves higher are capped at this 50 per cent retracement of the move lower seen from May 2011 to July 2012.
The EUR/USD has traded in the range of 1.3414–1.3490 in the former part of this week. Expect 1.3538–1.3615 to cap upside moves while 1.3323-1.3187 should support price moves lower.
Last Tuesday US consumer confidence for January disappointed expectations of 64.0 when it came out at 58.6.
Early into the Tuesday session, we had some better than expected data from Australia and New Zealand. The Australian Business Confidence Index for December rose to +3 from the previous -9, a significant swing in confidence that also marked the best improvement since the end of 2001. Even in the neighbouring New Zealand we had stronger than expected trade balance where the trade deficit swung into positive for December.
The data helped the AUD/USD recover the losses made throughout the Friday and Monday session. At the time of writing, the Aussie regained the lead and pushed to session highs of 1.04650.

 We all Know if everything is not for every ones, My wife is mine is not yours..:) can You imagine if all the people become a doctor, or an enginer, teacher and so on, Forex also i do believe it is not for every ones, this is a nature law, a person has his/her own job.

The good thing with forex is that you don’t have to be worried about competition. Unlike all other businesses that competition makes tougher conditions for everybody, the more people work on forex the more money everybody will make because it will make more volatility and movements in the market and volatility and price fluctuation is what we make money through it.
So forex is a good business but is it a suitable business for everybody?
To become a forex trader, first you have to learn it. It is not very hard to learn forex. There are enough free information over the internet. You just need to spend a few months to learn everything. But the more important part is the experience. You have to learn how to use your knowledge to trade and make money.
Forex is like driving. You can sit at home and read a lot of books about driving and know about it more than a driver who has a 30 years experience. But as long as you don’t practice and don’t drive, you will not become a driver. To be a good driver you also need to have a healthy body and mind otherwise you will make problems for yourself and the others. This is true about forex too. Not everybody who knows the techniques theoretically can be a good forex trader.
You have to have three things to become a good and successful forex trader:
1. Knowledge
2. Experience
3. Suitable mental and psychological condition
If you lose more than what you make in forex, you don’t have at least one of the above essentials.
As explained above, the knowledge can be gained easily and for free through the internet.
The experience can be gained through practicing with the demo account. Any of the forex broker companies offer free demo accounts that enable you to practice and learn to use your knowledge practically.
But what about the last factor? Suitable mental and psychological condition!
You can lose money in forex even when you have enough knowledge and experience. Why?
What kind of people, with what kind of personality, lose more in forex even when they have enough knowledge and experience?
1. Impatient people:
If you don’t have enough patience when you work or when you wait, you will have problems in forex. Forex needs a lot of patience. Sometimes you have to sit at the computer and watch the charts for several hours. Those who don’t have enough patience, get tired very soon and start entering to the trades while there is no clear and suitable signal and it is not the time to get in a trade. Then they will have to close a wrong position while they have already lost a lot of money.
2. Greedy people:
Those who are greedy are big forex losers. Greed cause you rush to enter to a trade when it is not the time because you think that the others are making money and you have to do it too. So you don’t wait for a clear signal and you just dive to a trade with this hope that you will make money whereas in most cases you will choose the wrong direction.
On the other hand, greedy people stay in trade for a long time and don’t end it when it is time to end. They keep the position to make more money but the market will change the direction suddenly and all the profit they had in their hand will be lost.
3. Fearful people:
Fear is the biggest problems in forex trading and generally fear is the biggest problem and obstacle in all the businesses. Fear keeps people from taking risks and those who have a lot of fear can not use the opportunities because they are always afraid of losing. They wait and wait and wait and lose the opportunities one by one and then get tired and try to overcome their fear and so they enter to the wrong direction before proper market analyzing and finding good signals. What will happen then? They lose money.
4. Emotional people:
If you are a person who makes his decisions emotionally and not wisely, logically, analytically, then forex is not for you because you will lose a lot. Forex is a technical and scientific business. It works according to the scientific rules and analysis. Forex traders use special indicators and signals to decide to buy or sell. They act only when they see proper signals and not when they feel that the price will go up or down.
Something you feel can be wrong and so if you trade according to what you feel, you lose.
Emotions are good but not in business, forex or stock trading. If you are an emotional person, you should not try forex trading unless you learn to control your emotions and use your knowledge.
How can you control your hastiness, Greed, Fear and Emotions in Forex trading?
This question can not be answered in just one article and I will write more articles about any of the above problems but here is some tips:
If you are a hasty person and this has made problems for you both in your life and forex, you have to practice Yoga, meditation or maybe hypnotism to become able to control your hastiness.
In case your hastiness can not be controlled at all, you may have to see a doctor and check your endocrine hormones like Thyroid, Adrenaline and Noradrenalin.
To control your greed, you have to make a strict discipline for yourself and try to be stuck to it. For example do not make more than a limited number of pips everyday or in each single trade. Tell yourself that you are not allowed to make more than - for example - 20 pips everyday or 5 pips in each trade and as soon as you reach the limit, turn off your computer or close your trade even if the market is still hot and you can make more or your trade is doing well and going to your favorite direction.
To control your fear, you have to spend enough time on learning and practicing with the demo account. You have fear because you don’t have enough confidence about your trading skills. You have to make hundreds of trades on the demo account to make sure that you have learnt the methods completely. Then you need to start with the real account and trading with your money but with a very small amount.
You have to keep on trading with a very small amount of money for several months and when you see that you can make profit and the number of your successful trades is more than your bad trades, you can increase the amount of the money little by little.
Keep in your mind that Forex and stock trading are all the matter of taking risk. The only thing that you have control on is the amount of the money you put in every trade and also the amount of the money that you let be lost. The rest is not in your hand.
Ok
- What do you think about yourself?
- Is Forex a suitable business for you or not?
- What are your weak-points?
- Are you greedy or you have a lot of fear that don’t let you trade properly?
- What is the reason of your fear? Is it because you think you have not learnt the techniques properly or it is because you have made a lot of bad trades and so you have lost your confidence?
Think about the above questions before you make your next trade and please make me happy and thankful with your comments.

This is just an archieves of My Trades, I do believe there is corrections on the smallest TF M1:

It's not an easy thing to Trade on M1, cause everything must be on the same point.."Greed when other people getting fear and fear when other people gonnna be Greedy"

Many new Forex traders think that successful traders have successful deals all the time. Most successful traders, as a matter of fact, trade with success rates about fifty percent and seventy five percent. Because of this it also means that they also fail fifty to twenty five pecent of the time.

If you add up all the losses made by a successful trader (in dollar terms) the losses are often much bigger than the gains or losses made by an unsuccessful trader. Therefore successful Forex traders are not only the bigger winners but also the biggest losers (in dollar terms). Trading activity is sometimes much more important to trying to get a hundred percent record at all times.


There are many reasons for this. Good traders have accepted the fact that losing is part of Forex trading. They therefore process and accept loses in a very constructive way. They are not distracted by failures or become emotionally upset. They view their losses as learning experiences and therefore get great value from loses. They also know that a trader's success rate is merely one of the components to a financially rewarding Forex trading career. They know that to succeed it take a balance between many trading skills and factors. These factors include sound money management, a positive and objective trading psychology, how many gains you make on gains, how much is lost on unsuccessful trades.

Using this constructive attitide allows them to trade more often (Not talking about over trading) as they are not distracted by trading psychology challenges such as depression and paralysis. They are also more confident at increasing the number of lots traded based on their past successes.

Successful traders therefore trade more and use more lots. Not only do they make more (in dollar terms) on their winning trades but at the same instance they lose more on their losing trades because their size of of lots are gradually increased.

Unsuccessful traders don't risk as much on their trading or don't trade as much due to their inability to deal with losses positively. This increases their insecurity and gives them a trading inferiority complex. Most unsuccessful traders are so distracted by their losses that they start their search for the Holy Grail over and over again every week.

You can save so much energy and time processing your losses positively. Almost all trading techniques can be made to be profitable by adding a number filters anyway (or reversing the trading direction on unsuccessful systems) so the trading system is the easy part.

Successful trader have a good money management process and a positive trading psychology.

Good traders lose money because it is part of trading (the market will always do what the market will do) and they don't lose any sleep about these loses. How well do you deal with your trading losses?

The biggest difference between successful traders and unsuccessful traders is the ability to manage losses positively.

Statistics prove that more than 80% of traders are not making money from forex trading. So what can you do to ensure you are part of the rare band of profitable forex players?
Ask any pro trader and they'll cite money management as one of the main, if not the key, factors in separating the winners from the losers. So many of that 80% disregard these crucial techniques it would be laughable if it wasn't so sad.
I have been trading for over 10 years and having coached a large number of traders, I have seen that the ultimate cause of failure is the lack of awareness of the 3M’s of ‘Money, Mind and Method&rsquo.
If we distribute the 3M’s on a scale of 10, then:

• Money – ‘money management’ would constitute five parts.
• Mind – ‘discipline and patience’ would constitute three parts.
• Method – ‘technical analysis’ would constitute two parts.

This tells us that the Method — the technical analysis (or fundamental analysis) is the least important part of trading.
But let’s be fair here. It really is not the trader’s fault, since most of the information available says otherwise.
If you purchase a course or a book, they all talk about technical indicators, chart patterns etc., but rarely will you come across a book or course which tells you to concentrate on the Money and Mind.
Most new traders will purchase a book, open the charts, look at the indicators, and buy/sell based on the crossover of the indicator lines or moving averages etc.
What about money management? What about the discipline and patience to prepare a trade plan and follow it? Zilch! Is it surprising that these traders lose money?
As traders we are all here to make money from the markets. But what should be the first priority of the trader?
The first priority of a trader is to conserve the capital. The trader’s capital is his bloodline. Without it, one cannot trade, so preserving it becomes a matter of utmost importance.
Without implementation of proper loss control techniques, a sudden large drawdown can shrink an account to such an extent that the possibility of attaining profitability becomes remote.
A single loss is not only a loss of capital; it also puts a trader two steps behind in the quest to profitability.
This is because the percent gain needed to recover from a loss increases geometrically with every loss.
Table 1 illustrates the concept, and ultimately the importance of controlling the loss of capital.

Therefore a trader must have a money management policy. A money management policy is nothing more than a set of techniques that help a trader minimise the risk of loss, while still enabling him/ her to participate in major price gains. It is probably the most critical aspect of trading and the most overlooked.
A sound money management policy becomes an absolute must in the forex markets, due to the availability of high leverage.
As the popular saying goes “take care of your losses, and the profits will come by itself”.
I want to put down certain facts and some simple rules of money management which would help the trader achieve the desired success.

1. Expect losing trades

It is only natural that when we take a trade, we tend to focus on potential profits than dwell on possible losses. We are usually so convinced that the trade will be profitable, that we tend to ignore the possible losses that would occur should the trade go wrong. One must accept that losses in trading are inevitable, and a successful trader is one who manages and controls these losses.

2. Placing stops

Trading without stops is akin to walking a tightrope without a safety net. As far as possible, one must have stops in the market since this is the only way to control the losses. While this becomes a ‘double edged sword’ since a trader may get stopped out of a trade for no reason, it is still the best ‘safety net’.

3. Stop loss levels

The most important rule is that the stops should never be mere ‘dollar value’ stops, but technically correct stops. Which simply means that one cannot decide on the stop level based on his/her personal risk level. A trader cannot say, “I am going to risk only $50 for the trade.”
The market does not care about your comfort levels; it respects the technical levels. Hence a stop must be at a technical level, regardless of how far it is away from the entry. If one does not follow this simple rule, the ‘comfortable’ dollar values stop would probably get stopped out more often, which defeats the very purpose of placing a stop.

4. Trading is a business of probabilities

You are in control only until the moment of the entry. Once you are filled in the trade, the market will dictate where the price will go. You cannot control this, just like you cannot control with 100% certainty, the amount of profit (or loss).
But what you can control is minimising your losses and protecting gains through a well-defined money management strategy.
A sound money management policy is based on two simple concepts: the proper risk-to-reward ratio, and correct position sizing, where the ‘position sizing’ simply means the amount of capital that a trader should risk on any trade. In this article, we will have a detailed look at the first principle.

5. Risk-to-reward ratio

One must always keep the RR ratio at a minimum of (1:2).
Let us use simple mathematics to understand the concept of the RR ratios.
First and foremost, one must accept that losses are a part of trading and one will have losing trades.
Let’s assume that a trader has a win-loss ratio of 60%.This means that out of every 10 trades taken, a trader would get six winning trades and four losing trades.

The only way to achieve gains in the account is by maintaining the required RR ratio.
Hence, if a trader is maintaining an average stop loss level of 25 pips, then the expected profits from the trade must be at least 50 pips.
Scenario 1: The trader has four losing trades @ 25 pips = (-) 100 pips. The trader has six winning trades @ 50 pips = (+) 300 pips. Net result after 10 trades = (+) 200 pips.
Hence a trader can achieve gains in the account, even after getting four losing trades out of 10.
Scenario 2: Now change the RR ratio to (1:1) and the net result comes to (+) 50 pips, which drastically reduces the gains in the account.
Scenario 3: Now reduce the RR ratio to less than (1:1), say (0.50:1) which is what scalpers tend to do – look for a profit of 10 pips and keep a safe stop of 20 pips.
The net result comes to minus-20 pips. To be honest, if I do not get sizable gains in my account after  10 trades, I am simply wasting my time. To achieve a worthwhile increase in the capital (after spending the time and effort) one must maintain the correct RR ratio. Unfortunately this simple fact is ignored by most traders.
Let us have a look at a trade example, which was taken and managed by incorporating the above mentioned aspects. I have taken a trade example of a harmonic pattern, for the simple reason that these patterns give excellent risk-to-reward ratios.
Figure 1 was a live trade taken in our ‘trading room’ of a bearish Gartley pattern on the daily time frame on EUR/USD.
As seen in the chart (Figure 1), once the pattern confirmed with the formation of point D, we determined the precise entry, stop and exit levels.
• Stop was placed above point D.
• Expected price target was the Fibonacci projection ratio 127.2%.
• The entry is a very crucial factor and was decided on a combination of three different factors.
As one can see in the chart, these parameters gave a fantastic RR ratio of (1:4).
Not only does this give a highly profitable trade, it also enables the trader to take profits in between, thus locking in the profits as the trade progresses.
There are two reasons for mentioning this trade: 1. We can draw a simple conclusion that as traders we must look for techniques/strategies which assure the minimum RR ratio. 2. This trade will be used to explain the concept of ‘position sizing’ in the next article.

by Sunil Mangwani

 Sunil Mangwani has been trading and consulting in the forex market for the last 10 years and specialises in trading with price action and Fibonacci ratios. Sunil has contributed to numerous financial publications, spoken at trading conference around the world and conducts specialised workshops on technical analysis. He is also the founder of “London School of Financial Trading”. For more information, visit www.fibforex123.com

Every month CFTC publishes Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) financial data. Amongst other things CFTC also discloses Total Amount of Retail Forex Obligations – which is basically the total equity of retail forex traders that broker holds.
September 2011 report shows that US retail forex traders have lost about $20 million. This figure however is to be viewed cautiously as this report just shows changes in total capital and doesn’t specify reasons for changes. We can assume that the $20 million decrease in total retail forex obligations mostly came from losses due to high volatility experienced in September – but we cannot be 100% sure about all of it. Some brokers like ILQ, Tradestation and FXClub have even shown an increase in clients equity while brokers like Oanda have experienced a decrease of over $13 million.
What’s even more interesting is that while September 2011 retail forex obligations report indicates that many traders lost money in September, the Q3 2011 US forex brokers profitability report shows the opposite – clients’ profitability is actually up.

	8.2011	9.2011	change
ADVANCED MARKETS	1,527,782	1,392,951	(134,831)
ALPARI	10,829,320	10,595,935	(233,385)
FXCM	145,264,186	145,254,197	(9,989)
FXCLUB	3,097,749	4,488,081	1,390,332
FXSOL	17,325,490	17,083,483	(242,007)
FXDD	33,756,982	31,758,420	(1,998,562)
GAIN	97,819,890	98,486,559	666,669
GFT	91,754,561	83,813,305	(7,941,256)
ILQ	5,207,838	7,819,830	2,611,992
IBFX	31,623,759	30,232,166	(1,391,593)
MB	32,828,208	32,593,827	(234,381)
OANDA	161,477,887	148,089,093	(13,388,794)
PFG	33,991,858	33,213,234	(778,624)
TRADESTATION	37,336,604	38,537,987	1,201,383
XPRESSTRADE	578,289	936,685	358,396
Totals	711,381,458	689,675,561	(20,124,650)

Capital Blu Management LLC showed their clients solid monthly returns. It looked like a sound investment. The only real warning sign was that the money wasn't in individual accounts, but in a pooled account.

According to the CFTC, while clients thought they were getting those monthly returns, Capital Blu was really losing over $7 million of the $17 million that has been invested. Millions more are unaccounted for, The owners, Donovan Davis, Jr., Blayne Davis, and Damien Bromfield are charged with running a fraudulent commodity pool. In addition to the charges against those individuals and CapitalBlu, a second company, DD International Holdings, LLC, is also charged. Further, there is an issue of money being illegitimately transferred to Nakano Capital Partners, LP, Nakano Capital Advisors, LLC, and/or Nakano Capital Management, LLC.

Some of the money was also misused for personal use. Things like luxury cars and private jet charters were paid for with client funds. Some of it was misused for very personal use. $40,000 was spent for a two night party at a “gentlemen's” club. We are shocked at these abuses of client funds and saddened that none of us ever get invited to that sort of party.

There were about 100 investors involved. That would make the average investment $170,000. 7 million was lost. That cost each investor an average of $70,000. There are millions more unaccounted for.

We wish to give a very special Thank You to the newest member of the FPA's Review Moderation Team for bringing this to our attention earlier today.

The FPA has blacklisted CapitalBlu. We hope that most of the missing money can be recovered so that investors can get at least some of their money back.