My winning trades - 9 Jan 2025

The only trade I took today was a winning trade. No earth shattering return but what was more important was the fact that I executed and managed the exit of the trade well.

I came to the chart late but that didn't stop me seeing a very good set up, my bull elephant off the 200 simple moving average ('200 SMA'). Price had gradually dropped down, without too much aggression back into the 200 SMA after a strong move up. The reason for entry is shown in the zoomed in chart below.

The hammer candle itslef would arguably qualify for me to take this trade but because I came late I looked at both the hammer candle and the bullish elephant bar immediately after this candle as one candle. Reason being is that there is little or no wick on the follow through.

Price action did steadily move to the upside and at one point I was at 2R. However, my trading style is to ride trades and exit out only if there has been a technical invalidation.

After a steady climb in price seen on the left side of the chart price pulls back to the 200 SMA before moving up and then forming an M pattern, which is typically bearish. As I seen this pattern forming I committed to myself that should the M pattern break out I would exit the trade. A break of the M pattern would also be a break of the 200 SMA which would be further bearish information.

This was effectively me closing the trade at a profit based on probabilities of what would likely happen next based on the current price action. Price did actually continue to the downside. If I had taken profits and moved my stop loss to break even I would have been stopped out later.

To be successful you have to make the right decisions based on the data you have. This is never easy, we can only work on the information we have and follow a set of rules. Interestingly enough if I had just done nothing and left the original stop loss in play this trade would still be open with significant unrealised profits.

Isn't profit-taking such a hard part of trading?

Trade Clearly!