My winning trades always have a better taste to them when the entry and the exit of that trade is in line with my set rules. It all sounds so easy to follow rules in trading but those who have ventured into trading from beginners through to professionals understand that it is not the case.
Today's only trade of the day was on the FTSE. Not a high value win but I really liked the result from a non monetary perspective. Allow me to walk through the entry and exit.
The FTSE on the daily chart had retreated quite significantly from its previous highs and at the time I was looking at the chart the price action was going through what looked like a sideways consolidation.
I was monitoring the charts using Heikin Ashi candles, which I sometimes use to spot reversals in price. In this case I was open for price to reverse to the upside. After market opened price action printed a trade set up that I am required to take if all my parameters are met. In essence if an indecisive candle is printed, followed by two further green bars with no lower wick I am to enter. That is exactly what I did.
I have in this case showed below the price action fully subsequent to trading.
Subsequent to entry the price went into a fantastic uptrend and it was very strong. Price then started to fall violently back to the previous support area, as shown. On its attempt to journey back to the upside it failed and ultimately broke the support area, which triggered me to exit the trade and take 2R profits.
In other situations maybe the price would have shot back to the upside but due to the aggression of the sell off after the high I took the probability play and exited. If I had remained in the trade you can see what would have happened to my unrealised profits. They would have painfully resulted in a break even trade because I had already moved my stop loss to break even after price action had moved to excess of 3R of my original risk.
The results of my trade are shown below. It does pay to not torture yourself and take profits when technical breakdowns occur. There will always be other trades.
Trade Clearly!
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