My winning trades consist of a trade on Alibaba of 140 shares on the 2 minute chart. My risk was $29, the maximum risk when I am trading the 2 minute chart. See the initial entry below:
There was a relatively tight consolidation period where there was clear resistance. The large bullish elephant candle smashed through all resistance and although not clear on this chart it was smashed through with volume.
Instead of jumping into the trade in this bull elephant candle I waited to see if there was a pull back to give me a chance of getting a better risk/reward entry, rather than having a stop loss under the large candle.
After there was a pull back candle followed by the next green candle I waited to see if the red candle would be taken out and if so I would enter and put a stop loss under the small green candle, evidenced by the dotted orange line.
The next chart below shows how the price action played out during the course of the trading session and I have outlined where I sold half my position.
I took half my profits at the point shown because there had been just so many bullish candles. In order to control my greed I took half my position off the table but didn't move my stop loss. If I had moved my stop loss to break even, you can see from the entry point I would have actually got stopped out on my remaining 70 shares.
I deliberately left my stop loss as is so that I allowed myself to still be in the trade and have the opportunity to collect more profits should the price rip back to the upside past the price where I had taken profits.
On such small time frame trading I take the view that if the price runs you have to take some profits. When I checked the trade later I moved my stop loss up to above break even and this allowed me to capture further profits. I could have made more profit by exiting the entire 140 shares when I took profits. However, my strategy is to keep myself in the game.
My final position on my only trade of the day are captured below. Total return was £56, a return of 2.5R.
Trade Clearly!
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