Solid Gold

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I did not come to the markets today to try to trade and make money. I just came to browse. I was looking at charts of gappers, and saw Barrick Gold Corporation (USA) (NYSE: ABX) looking like this:

I liked the lower volume doji at the OR high. I liked that 40 was the 52 week high. The 5-ema was fairly close, but not as close as I’d like. I put a buy stop above the doji at 40.02, and planned the sell stop under the doji at 39.78. I picked a half-size position (0.5% of my equity) so that the $ would be even less of an impact on things. And then I took my hands off the wheel and let the market do the driving. Here’s the result:

I almost pulled the plug when we were close to my stop at 39.81, but I had decided to stick with the plan completely, so I held. Well, I got a lucky bounce there, and up we went. Took a partial when we stalled just under the 138% fib target at 40.42, moved the stop to 40.20 for the rest (119% fib) and went to lunch. Came back, and ABX had run without me and retraced all the way to my stop. Somehow missed getting stopped out (we ticked 40.20 at least once) and then it fought back to my earlier exit. I sold the rest at 40.41, seeing it as a gift. Had I been watching the trade earlier at the 40.70 point, I would have sold the rest at 40.60-ish I think. Still, I was glad to get back to my partial point. It turns out that ABX went on to make even higher highs than before, but even if I had held longer, I would have taken the rest at my 40.47 target, so I never would have captured that move. Trading well and following my plan got me +1.75R :)

I’m glad I traded well, and traded according to my system rules for this setup. I got lucky a bit, but there’s always a chance that anything can happen in a trade, either in your favor or against you. I have to work hard not to kick myself for missing the extra profit I could have had. I’m trying to be satisfied with what I got and accept my trading insofar as I do the best I can with the info I had at the time. That’s all part of Step 1 of my Seven Step Plan. This trade is a perfect test for that, as I watch ABX go higher and higher (and higher!), and I practice accepting it. :) I also have to fight the euphoria of winning and being right and making money, and focus on the fact that I traded well and executed my plan. That is true success in trading! A good plan, properly followed, can’t help but make money. Focus on the money too much, and you’ll lose it all.

I’m not pushing to make any more trades today. I want to put my efforts into myself, and I plan on trading lightly, if at all, as I continue to follow my plan.

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com