It’s been a while since I put my pen to paper. It’s 2.17 am, I sit at my desk at home, my eyes fixated on my pen. We have this bond, one that is bound by honor and service. And tonight, it’s my turn to pay for the bargain. That sounds like too much of an affair between me and my pen right? Well, only we know. Let’s engage. Let’s indulge today’s topic, Shall we?  

I love thinking differently. I question most, if not all societal norms. In trading they say, ‘the path of the masses often leads to misery.’ Let’s take the unexplored route. The world has already preached too much about success and achieving one’s goals, which is fine, essentially. But today I invite you to take a ‘not so much explored path,’ that of facing and managing losses in life and in trading. So let’s take a short trip to my mind.

Until you’re bold enough to face your fears of failure, and the manifestation of failure in its realest form, you’ll never be ready for meaningful success in life. Even if success comes early, you might not possess the resilience to see it fly high without getting lost in the hardships encountered therein. This is the quality of possessing the right mindset and discipline. It is the same reason why most athletes and lottery players win millions of dollars only to end up broke in a few years.

Beware to cultivate a space that allows for acceptance and moving on from your losses, both in life and in trading, but not conforming and settling with what’s gone. See the difference? Quit complaining about the things you have no control over. In trading especially, you cannot control the price movements, or the trading volumes/volatility. It adds no value to being too attached to your trades, or trying to ‘predict’ the next trend or price rejection. Our job as traders is to master how patterns form (price action), and to trade them off when they do appear on the charts; but never to trade in their anticipation. One thing that is ultimately in your power is your risk exposure. Every day you get to choose how much you risk on every trade. The masterly of proper risk management is the ultimate power of successful traders. This of course makes sense for those who approach, or looking to approach Forex as a business in all its disciplines.

Most often than not, we don’t give failure and loss so much thought when we set out for a project, career, business or the onset of a new relationship. In most cases, we presume for the best outcome, (total optimism) and fend out the thoughts of any chance of failure and losses whenever they creep into our minds. Don’t get me wrong, it’s unhealthy to entertain the idea of failure when pursuing our life missions, whether it’s in business or relationships. This ideal of course presumes that you took time to evaluate your goals and compatibility. But it’s a different sphere of mental strength to be aware of its possibility, and do everything in your ability to improve yourself and to minimize the chances of failure and losses actually occurring. This is how we define intelligence.

Unfortunately for traders, losses are PART OF OUR DAILY BUSINESS. Losses in trading are our ‘cost of doing business.’ Usually, this is the toughest ideal that most people venturing into the world of trading don’t recognize, accept, and work on their management rather than avoidance. Not so different with life and business, right?  Additionally, it is the very reason why most people don’t stick around to make consistent returns in trading, and criticize how much trading is similar to ‘gambling.’ 

The biggest hedge funds of the world today and the greatest trading legends encounter losses in trading, the same way with any business out there. They don’t run on profits every other week. Paul Tudor Jones, founder of Tudor Investments Corporation, who also adds as one of the world’s greatest traders of our times says it right, “At the end of the day, the most important thing is how good are you at risk control.” What sets him and other successful traders apart is their ability to recognize and the accept losses as an integral part of their trading careers. This is how they have endeavored to reach the peak of their game. Most of the mastery of learning and trading the markets successfully has a lot to do with cultivating the right psychology and expectations.


Therefore, as traders we must accept and channel our energy and focus towards ‘MANAGING LOSSES’ as opposed to ‘AVOIDING LOSSES’ to ensure we keep our losses minimal, and our profits optimal. This is our only chance of achieving a sustainable career out of trading. The best part is that there are parameters available for traders to manage and limit their losses. What’s more exciting is that you don’t need to stay on your screens all day monitoring and ‘controlling’ your losses, everything is set up for you to input the level and the little amount of capital that you are willing to risk in every trade, and leave everything to the markets to work, i.e. after doing your due diligence and analysis. As you walk away after setting up your trades, it’s usually clear on your mind exactly how much dollars you stand to lose should your trade go against your analysis/direction, and how much you stand to gain if it’s a win. In any case, the market does what it wants, and no one trader in the world can control its actions. We call it ‘over-the-counter’ business transactions.

Beware of anyone out there who purports that they don’t make any losses, that their language is that of ‘enormous profits’ as a total scam that you should keep off.

At Fourthstreet Consultants, we are driven by a common approach as we continuously train and mentor traders to achieve consistent returns by trading their own capital, as others add to their resume in securing trading and Financial market consultants job positions in the fast-growing money market industry.


Our Forex Course further takes you through live recorded trading sessions whereby you experience first-hand how to take losses trading real money on live markets. At the end of the day, with all trades and all small losses factored in, we make considerable profits, which is the nature and essence of any legitimate business. Everything is well laid out and demonstrated for you throughout the four Modules of the course. From well-articulated notes that have filtered the ‘noise’ from the internet, to trading videos with rich content demonstrating the various trading strategies, and how to apply them on live markets. Those looking to add another stream of income can sign up for our Trading Course Here to learn and earn from trading the Forex markets.

As I wind up, let us all strive to be people of value. We live in a society that is ‘result-oriented’. It cares less about your journey, or your struggles and failures along the way, but only for the end results. Embrace your own journey, pat yourself at the back with a ‘well done’ for those small achievements along the way because in most cases, No one will.

A. C. Bension said it right, “The Worst Sorrows in Life are not in its Losses and Misfortunes, but its Fears.”

EURAUD

This week we’re going to follow up on a pair which we looked at last week. At the time of the analysis, price had formed the doji with a small real body as shown in the chart. Our course of action was to wait for price action to guide us, since we were at a minor resistance level. A breakout occurred, one that did not have a pullback because they also don’t happen all the time.

SUMMARY.

Bulls are dominant as they’re rallying the price. An inside bar formed signaling a continuation and price did continue bullish. It looks like if they (bulls) maintain the momentum, we might be headed for the major level.

USDCAD

The Dollar vs the Loonie has been on an uptrend since the beginning of the year on the daily timeframe. Currently price is consolidating within an ascending triangle. Where the upper boundary is acting as a resistance zone as shown.

SUMMARY.

At this moment, we are waiting for a break out. Usually an ascending triangle breaks out on the upside, but it is not guaranteed, nothing in the forex market is. Our bias will shift to bullish if there is a break and close above. Otherwise we will monitor the pair and talk bearish if it breaks and closes below the trend line. 

EURAUD

EURAUD will be our choice of weekly analysis this week on the daily timeframe. Price has been slightly choppy with a minor uptrend that just reached our near term resistance level as our latest trend. At the level, the previous candlestick has a long upper shadow which did not close above. As well as the current candle which is a doji with a minute real body.

SUMMARY.

From the recent price behavior, bulls are facing resistance pushing price to higher levels. Indecision is what is depicted. A possibility of a reversal is quite high but we have to wait for confirmation to affirm this speculation.

GBPJPY

We are going to follow up on this pair, from analysis done 3 weeks ago. Price was trading within a descending triangle. At the time of the former analysis, we had reached the lower boundary depicted by the yellow eclipse. A bounce occurred off the support zone and rallied up. Later the upper trend line acted as resistance and the market slid off back to the support zone and broke out.

SUMMARY.

With the occurrence of the break and close below our bias shifts bearish. We had our confirmation candle following the breakout. The most recent candlestick is an inside bar. Monitoring of this pair continues to see whether the bear power will persist.

GBPUSD

This week’s analysis will be a follow up on the pair of the Pound against the Dollar based on the analysis we did on the pair two weeks ago. True to our previous analysis, we have seen a breakout from the descending triangle and prices actually move bearish like we anticipated. The bear move was not very strong as it reversed after about 100 pips. The candlestick formation signaled that the bear power is diminishing, and the bulls have taken control of the pair, and are already pushing the price upwards.

SUMMARY.

Following the bullish pressure witnessed towards close of last week, this week we will be keen to follow if the bulls have enough muscles to continue pushing prices up. The next possible target level is the near-term resistance zone at price 1.33471.

AUDCAD

This week, we are also going to follow up on this pair that we analyzed last week. Our bias was bearish after the breakout and pullback that occurred on the chart. The bears have momentarily pushed the prices down. Currently we see some indecision candles on a minor level.

SUMMARY.

We will be waiting to see whether there will be a possible reversal or if the bears will continue to push the prices further down. We continue to monitor this pair.

GBPJPY

We are going to look at the Pound Yen which is often referred to as the monster. It’s  notorious for causing many traders financial and emotional turmoil .Price has been rallying since December last year. Soon after we went into a consolidation period in the form of a descending triangle. On seeing this as price action traders, we must be rejoicing because a good trend will come out of this. Most traders don’t like it when price ranges. Yet we all know trends follow after ranging periods in the market.

SUMMARY.

A descending triangle breaks out below 7 times out of 10.This does not mean we should automatically sell the market. Patience is needed to join in, whichever side there is a breakout. Price will guide us whether we shall reverse the previous uptrend or continue with the bulls. Therefore we sit on our hands until we get a signal, following a breakout and confirmation.

AUDCAD

In this week’s analysis we are looking at the Australian dollar vs. the Lonnie. It is clear that since November of last year price was in a downtrend. Around February this year we had a rally within an ascending channel. Price usually consolidates in form of chart patterns. Safe to say the downtrend was our main trend and the uptrend(within the channel) is our minor trend .We had a breakout which closed below and a pullback ensued that was successful.

SUMMARY.

Once we broke out of the channel, our bias of any bullish momentum was nullified. There’s a high probability that we will continue with the bearish major trend. We now start looking for opportunities to short the market after a confirmation. Therefore let’s closely look on this pair to see whether we will continue with the falling prices.

GBPUSD

On this week’s analysis, we’ll be looking at the daily chart of pound dollar. Swiftly we can see price has been on an uptrend since December last year. Early this year, price topped twice at the major resistance level. A consolidation followed thereafter in the form of a descending triangle. Within the triangle it is visible that the line of least resistance is downwards. Therefore it is no surprise that price broke out and closed below the triangle. The most recent candle stick has an upper shadow, which is highly likely a pullback on the lower timeframes.

SUMMARY.

Evidence of a close below and a retest shifts our bias on this setup to be quite bearish. We closely monitor the pair to see how much further  the bear momentum will persist.

AUDCHF

We’re going to look at this analysis from the weekly timeframe. Price has been making a series of lower highs for the last 2 years. At the same time we see a series of higher lows from late last year consequently forming a symmetrical triangle. The triangle is still intact with no breakout in sight. However within it, there’s a double bottom that has broken out and closed above the neckline.

SUMMARY.

In order to trade the triangle, our rules suggest we wait for a breakout on either side of the pattern. The double bottom breakout may give us a reason to believe that a bull market is imminent. Nevertheless a breakout above the triangle will confirm this hunch. We may even see a pullback on the double bottom first before any further action. Hence we remain patient but vigilant for clear signals guided by a breakout to open positions.

AUDJPY

We are going to look at a follow up on this pair which we did during 25th-29th March. During the previous analysis, there was a triple top that was supported at the neckline which is labeled as the support level now. Bulls sustained the rally after the bounce off the support up until we got to the resistance zone. The second last candle stick was an inside bar and we can see what ensued after that. Finally we broke out of the consolidation by a huge bullish candle stick.

SUMMARY

Price has been ranging between these two levels, (call it a rectangle if you like) since the beginning of the year. Eventually a breakout has occurred and our bias becomes mainly bullish. We shall therefore be patient to see whether we shall experience a pullback as well or if bull power will sustain pushing price much higher.

XAUEUR

This week we are going to look at gold vs the Euro. Evidence of a trading confluence has been sited which should keep us on high alert as price action traders. Quickly looking to the left, we can see bulls were having a splendid time as they gradually rallied the price. A consolidation later followed in the form of two price patterns as advertised by the charts. Within a symmetrical triangle illustrated by the yellow trend lines, we see an almost picture perfect head and shoulder pattern. Both chart patterns have broken to the downside denoted by a close below the patterns by the breakout candle stick.

SUMMARY.

Bears exhibit an intention of taking price for a waterfall; this is evident by the break and close below the patterns. There might be a pullback towards the neckline/trend line to test the boundaries. If the boundaries hold this will give us an ideal and confirmed entry position after the retest. At this moment we wait for two things, a confirmation of the bear dominance by either another bearish candle or a retest. 

NZDUSD

This week we are going to follow up on the NZDUSD pair, mainly based on the weekly analysis we did back in mid-February.  The NZDUSD pair seems to have taken a ranging motion.  It no longer consolidates to form a symmetrical triangle but has been bouncing between the resistance and support level as captured on the chart.

SUMMARY.

Price is currently sitting at the support level and our take as price action traders is to wait for price to guide us, whether the bulls will have their way and take the pair up or will the support level will finally be broken giving way to further bearish momentum?

XAUUSD

From our previous weekly analysis of the Gold vs USD, price had been on a bullish trend which later was resisted on the formation of a pin bar. The bears further took over the market with a strong bearish candlestick. In the following three weeks as shown from the charts, the bulls resisted the bearish momentum and we see some bullish move. However this did not hold grounds for long as last week the bears regained control of the market as indicated by the strong bearish engulfing candle, which engulfed the last three bullish candles.

SUMMARY.

Should this pair break below the ‘test limit’, we will be looking to go short on the pair, with our targets aimed at the ‘Near-term support level. Until we have this confirmation, we hold to our cards and not do a thing.

CADJPY

During this week’s analysis, we have an example of market confluence. It (market confluence) always increases our chances of being profitable as it offers high probability setups. Looking left we see price has been falling steeply but the trend reversed on a sizeable hammer. Bulls took over then the bears resumed with their downtrend in a descending equidistant channel. Within the confines of the channel, we see a morning star which is part of a fakey setup. Traders were faked into going short but then the morning star reversed that momentum and even closed above the mother candle which is a signal to go long.

SUMMARY.

Bulls seem to be very resilient within the channel. We’ll have to wait and see if the force will be enough to breakout above of the channel. While this may be true we got to sit on our hands momentarily to see how price behaves around the upper boundary of the descending channel. Sellers may come in and negate the rally; in any case we are in a descending channel.

XAGUSD

We are going to look at silver vs the dollar in this week’s analysis. Price has been on an uptrend since late last year then fell into a consolidation. The range is in form of two chart patterns. On one hand we see a falling wedge, and on the flip side we see a slanting head and shoulder pattern with a slanting neckline as well. Presently price has bounced off the neckline.

SUMMARY.

Currently, the neckline has held its own, but we don’t know for how long. Two scenarios can play out at this point. Eventually bears could take charge and drive price in a waterfall breaking below the neckline. Once a close and confirmation happens, our bias will be bearish. Conversely the bulls may maintain the momentum and  rally price breaking out of the falling wedge. Therefore we wait, as we all know good things come to those who wait.    

GBPAUD

This week’s analysis is going to happen on the weekly timeframe. Price has been trading within an ascending channel for 5 months. Therefore we’re in an uptrend. The occurrence of the price ceiling validates bullish weakness and bear power at this point. Last week’s candle stick closed as a hanging man. A candlestick which shows a high probability of a reversal or weakness in an uptrend. We can describe this as a trading confluence as well. Combination of a level and a reversal candlestick.

SUMMARY.

Our trading confluence gives us a reason to believe that this price might reverse and push further down. As usual we have to wait for a confirmation to validate bear dominance at this level. Patience is key and also the name of the game.

AUDJPY

Analysis on this pair is going to be on the daily timeframe. Immediately we notice that price has been on a downtrend. The momentum on the downtrend paused momentarily and started consolidating in the form of a triple top. Price has been supported severally by the neckline and hasn’t broken below yet.

SUMMARY.

This set up is quite clear and direct but not any different from any other in terms of how we approach it. Patience  is key for validation of an entry or bias. In order to trade this chart pattern, a close and confirmation below the neckline is needed. Until then, let’s stay put. Since price might rotate bullish and trend upwards like we have seen numerous times before.