Live Trade Update – XAG/USD (silver)

Filed under: Live Trades |

 

I talked a little bit yesterday about a trade that I had entered on the XAG/USD chart. I have now exited this trade at breakeven, and I would like to talk you through the process of this trade right now.

 

Figure 1.

Figure 1.

Just to remind you of the setup, take a look at Figure 1, which is the daily chart for the XAG/USD pair. The pair had been trading in a range between two trendlines and was beginning to get squeezed. When a pin bar formed penetrating the upper trend line, I went short with an order at a 50% retracement of the pin bar, with a stop loss just a few pips above the high of the pin bar, and a target of two and a half times the risk. If you look at the chart now, you will see that this order was filled at a 50% retracement of the pin bar, and you might think that I am now in good profits. However, I exited this trade at breakeven, and I will now explain why.

 

Yesterday, I mentioned that if this trade moved into profit, that I might move my stop to breakeven. So, when I was in profit to almost double that of my risk, I did indeed move my stop to breakeven, and I was quite confident that my target would be reached. However, something quite unusual and volatile happened, which you cannot see on the daily chart.

 

Figure 2.

Figure 2.

Take a look at Figure 2, which is the 1-hour chart for the same XAG/USD pair. What you will see here is a kind of earthquake effect. Price plummets down in the space of one hour (which is the point where I moved my stop to breakeven), only for it to bounce back up with the same ferocity, taking out my breakeven stop. It then took a slight breather, before plummeting down once again. This might be due to price being squeezed between those trendlines, with the bulls and bears currently locked in a tug of war. However, I am out on this one, and will now watch on the sidelines to see if moving my stop to breakeven is going to be a mistake… or not.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>