Both my winning trades came from the FTSE Indices. I managed to exercise strong patience in maximising my profits from these trades.
My winning trades consisted of 2 entries, both shortly after the market opened on 30 May.
Trade 1 was an entry at around the close of the first 2 minute candle. Price had shown immense strength and although you don't see it on this image, to the left, this giant bullish elephant bar had invalidated a significant number of candles to the left. This was looking like the start of a reversal from what had been a few bearish days within an overall uptrend. The stop loss at entry had been placed below the beginning of the candle as shown.
Trade 2 was more like my 3 bar play strategy. The position size of this trade was larger because I had a tighter stop loss than the first trade, where the stop was placed under the large opening bar. The candle by candle price action was as follows:
Candle 1 was acted upon, a potential reversal signal
Candle 2 was an indecisive doji candle, waited for further information
Candle 3 was a hammer candle, continued sign of bullish sentiment confirmation
Candle 4 was almost an identical candle to candle 3, the trigger to enter an additional trade
Candle 4 for me was just too strong to ignore and although I already had a trade on, seeing 2 hammer candles as strong as that in a row was screaming high probability that there was going to be more upside momentum and I entered a position. Normally my rules are not to add to my positions unless trade 1 is locked in at break even or in profit.
Trade management
The subsequent price action is shown in the image. There is more upside action than I was able to show, but the theme is clear, this was turning into a strong trend. In line with my personal style of trading I did not move my stop loss until I had at least hit my profit target of 5 times my risk.
Upon my trades hitting my desired profit levels I took 50% of the profits off the table and moved my stop losses to the points indicated with the dotted red line. I had locked in significant profits compared to my risk and I kept myself in the trade should the price continue to the upside, provided no whipsaw like bearish candles that hit my stop loss.
Price did continue to rise and I took a further 40% of the remaining position profit. Now I had a free carry of a $10,000 position carried overnight into the following trading day. On the 1 June I closed out the remaining trade as the price moved higher. I didn't want to carry the trade over the weekend. The end result on both trades was as follows:
Trade 1 - profit of 4.2 times my original risk
Trade 2 - profit of 6.3 times my original risk
It is undeniably more difficult to run with a trade compared to just hitting a modest 2 times your risk and exiting. However, when they work out you do get rewarded.
Trade Clearly!
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