Why does this trade I took, which yielded a nice profit make me disappointed? I shouldn't have taken this trade is the reason. I wasn't mentally prepared for trading and the result of that was entering a trade that I shouldn't have. My winning trade was a trade that shouldn't have even been entered.
There were some positives that came out of this trade and I will get into the details.
If you see the entry point I entered the trade when the green candle took out the red candle while in an uptrend. This was deemed to be a continuation trend.
My continuation rules are that if there is a bullish elephant bar taking out a red candle in an uptrend and not far from the 20 period moving average (green line) I should enter. However, the entry candle wasn't an elephant bar and as per my trading rules I shouldn't have entered.
I could have just exited the trade after kicking myself that I entered the trade. Since the price action was continuing to be bullish I told myself that I will get some further trading practice out of this by managing the trade in a way that I had entered it correctly and that's what I did.
After price surged to the upside and the total unrealised profits of the trade exceeded 5R I took 25% of my position off the table to give me the profit as shown below.
My second profit taking was after price consolidated in a tight range and when it tried to pierce the previous high it was rejected. I decided to take approximately 50% of the remaining position off the table to give me the profit as shown.
The third tranche of profit was to close the position completely. It doesn't show on the chart but subsequently the price action started accelerating to the downside and I exited the remaining unrealised gain.
Profit taking is a difficult part of trading and at least I managed to do this correctly. This was a good result but believe it or not I don't want to be in this position again.
Trade Clearly!
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