Live Trade Number 7 – ANALYSIS and RESULT

Filed under: Live Trades |

Well, our live trade on the XAG/USD (silver) pair the other day, which I gave to you in a “trade alert”, came off very nicely to the upside – and I would like to talk you through why I entered that trade right now.

 

Figure 1.

If you take a look at Figure 1, you will see the entry for this trade. This is the 1-hour chart for the XAG/USD pair. As you can see, price had entered a green zone, which I have marked in to remind myself that it is a significant area of support/resistance. Once price entered this green zone, I was on the lookout for any price-action signals on the daily, 4-hour, and 1-hour charts. As you can see, a nice bullish engulfing pattern emerged on this 1-hour chart, which told me that the probability of a market turn had increased. I put an order in here at a 50% retracement of the engulfing candle, with a stop loss set just a few pips below the low of the move and a target of two times my risk (which is a risk-reward scenario of 1:2).

 

Figure 2.

If you now look at Figure 2, you will see that our order was filled and price moved up quite nicely before hitting our target level and locking in a 2% rise on our bank. Our bank, for the purpose of this live test, is a bank of 10,000 GBP, and I am risking 1% of the bank on each trade – so that is a risk of 100 GBP per trade. Here are the official results so far:

 

Trade 1: Cancelled

Trade 2: -100.48

Trade 3: Cancelled

Trade 4: 199.59

Trade 5: 200.01

Trade 6: -99.46

Trade 7: 204.56

 

Total Profit/Loss = +404.22 GBP

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