After not being in the zone in the previous day my main objective for the day was to only take trades if they met my criteria and also to only commence trading if I was in the zone. I prepared myself properly by being relaxed, at my trading station 45 minutes prior to market open.
I used this time to study the pre market price action and identify a selection of equities where the set up was promising and I just had to establish on the open if the price action would follow through.
I found 3 potential trades on Nvidia, Boeing and Tesla. However, after market open only the Boeing set up looked like a strong probability of success if I entered. See the chart below for details of my winning trades.
This trade fell into my bear engulf strategy. This strategy kicks in when you get a bearish engulfing bar of a prior bullish bar and that has to be within a downtrend. Boeing is bearish on the higher tine frame.
At the market open the price was around both the 20 and 200 period moving averages, both of which were in a decline. As soon as the bearish engulfing candle closed I entered the trade where shown, stuck my stop loss above the high of the bar and let the other market participants to decide if I had directionally got this trade correct.
It's evident that the direction was correct and price action was very bearish, demonstrated by the fact that it remained under the 20 period moving average for a considerable part of the trading session.
My rules are to take profit at 5R but I am to try and close trades before the trading session. In this case, once I started seeing a strong reversal to the bearish price action I exited the trade for a 4R profit. My actual profit is shown in the trading statement below. A doubter would say this could be a sim account trade but I don't need to pretend, I share my losses too! It is amazing that 95% of traders who produce content never seem to lose.
Trade Clearly!
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