Oil Trade didn’t work out
You remember the trade that I put on the other day. The disappointing thing is that the support which we had identified didn’t hold and the price action crashed through it and took out my stop for 140 points.
Disappointing, of course, but in trading you have to expect these losses. As a trader so long as each maximum loss is your defined percentage loss (in my case 2%), it doesn’t matter. I was able to stick through my plan and it didn’t come off. I was talking to some other trader friends of mine and they said that in hindsight, perhaps I should have heeded more attention to the daily bars after my entry.
The chart below is the same daily chart, just more zoomed in…
At the candle numbered 1 was where I took my long position. Support underneath was evident as the candlestick’s tail shows. However, in candles 2 and 3, you can see the reverse… tails forming at the top of these two candles showing selling pressure. I had literally placed my long order at candle 1 and left it with a stop and take profit. If I had paid more attention to the following candles, perhaps I would have been able to get out with a smaller loss or even had and entry to short and take a few hundred points. Still, everything is easy in hindsight so I’m just going to have to take the loss on the chin and move on for more opportunities of which there are every day!
