Performing well in trading requires an enormous amount of determination. Even when you win you can make mistakes. The winning trade I had on Meta poses quite a lot of questions around profit taking. Check out the trade.
The issue about this trade is whether I did the right thing when it came to profit taking. However, before we move to discuss the profit taking let us look at the entry in more detail. See the zoomed in version of this 3 bar play trading strategy.
The price action on each candle was as follows:
The opening candle on open was bullish but it did leave a wick at the top to suggest caution was required for entry.
The second bar attempted a move down but was quickly bought up creating a hammer candle.
Candle number 3 closed higher than candle 2 but only after a move down, which again was bought up, even earlier than the buyers in candle 2, leaving an another bullish hammer candle
At this point my strategy was that if the opening close was taken out on candle number 4 I would immediately enter and that is exactly what I did. I am very comfortable with the actual entry of this trade.
Part of me thinks I exited the trade too early and the other part of me thinks that, based on the bearish price action I did the right thing. However, had I looked at the higher time frame to get better context I would have left the trade and caught the bullish move up towards the end of the session.
The next trade was on NASDAQ, again a torturous trade when it comes to profit taking.
The entry was when for a third time there was a serious rejection on the price attempting to go lower. A green bullish bar was printed and I entered accordingly in line with my rules.
I left the trade, but when the market closed and price started to seriously look bullish I closed the market in post market trading. I was fearful that there would be a quick reversal. I show on the chart all the lost profits I missed out on from fear. Yet again, another classic example of not following my rules on profit taking.
Managing winning trades is essential in order to be a profitable trader overall and to maximise those gains when trades do go your way. Clearly I am having serious problems at the moment with this. I am pleased to say that in subsequent days I did manage to get this under control again.
The pathetic profits from these trades are shown below on the basis that these profits should have been multiples of what I realised.
Trade Clearly!
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