Silver has been in a bullish structure for a while on the daily chart. It had been forming, what resembled an inverse head and shoulders pattern.
I was waiting for an opportunity to enter a long position that was in adherence to one of my trading strategy entries. The result was that I found an entry and it resulted in my winning trade.
In this 4 hour chart, after the pull back, price started to climb consistently. Even when in prior days there had been a gap down in the price, which is noticeable on the chart, the bulls immediately entered to push the price back up. A day later price revisited the low of that gap down start to the day and the bulls entered to reject the bears. This is what also really gave me confidence that I wanted to enter a long.
My entry was on a closed candle where the price was above the immediately attempted high immediately to the left. Key reasons for entry were:
green candle had taken out a red candle in an uptrend
volume, although not shown on the chart had increased
price action was not extended away from the 20 period moving average
Price action then subsequently exploded as is evident in the image.
The biggest challenge was profit taking, which was executed in 2 stages. In stage 1 price had reached 5 times my original risk on the trade and accordingly I took 20% of my position off the table.
After taking profits I moved my stop loss to just under the 50 period moving average. My rationale for that is that if the price action is to continue its upward momentum, I would then expect such a key moving average to provide some support. Price action started to subsequently show weakness and I was ultimately stopped out of my trade, yielding a total return of 4.8R.
Trade Clearly!
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