Stocks Trading Journal for Long on WRD
This stocks trading journal is a review of a recently closed Long Swing Trade on WRD. On the 2nd February 2018 we posted a video in our Signals membership for a potential Long Swing Trade for $WRD on the Daily time frame. The video had a quick analysis, entry price, Stop Loss and Target price for this potential 5th wave move Long on the Daily timeframe. The original video can be viewed >>>HERE<<< . There was some adjustment needed as the profit taking pullback found it’s ultimate support level, but we finally got an entry at $18.04 on the 23 February.
Our wave5trade strategy involves trading the 5th Wave of the Elliott Wave sequence as it is the highest probability move in a “with trend” trade. The Wave 4 in this case pulled back and found initial support in the Amber Pullback zone, which indicates an 80% probability that the 5th Wave will go on and make a new high in this current Bullish trend. Final Support was found in the Red zone which represents a 75% probability of a new wave 5 High. The Pullback zones are part of our Elliott Wave Indicator Suite. The original chart shown below shows the setup before the support level was finally formed, but illustrates how this strategy evolves until the price has a good move away from Support. Once support was found we had a Long entry price of $18.04 with Stop below the Wave 4 low at $15.20. Our automated 5th Wave Target level in Blue was around the $23 level for this Long trade, giving a 1:2 Risk to Reward.
Below this chart is how the trade went and chart showing exit when price went through our automated target zone.
WRD Stocks Trading Journal – What Happened Next
Tip-Toe entry into this Long after a strong move away from the Wave 4 low and out of the 6/4 MA High (Green MA on Chart Below) on 23 Feb 2018. We were close to earnings so price action was muted. On the 8th March the price made a big move down as a reaction to earnings, but did not take the Stop loss out. When Swing Trading off the Daily time frame like this we must remain disciplined and have confidence of stop loss positions below Wave 4 major support levels.
It took just over a week to recover from the earnings reaction and get back above our original entry price of $18.04. Another week of range bound movement above the entry ws endured during what was an extremely volatile period in the markets. This consolidation gives more confidence that a 5th wave move is highly likely. Then on the 10 april the price finally broke out of the range and moved quickly to the Target Zone. As this was a parabolic move and likely to go through the target zone a sensible trailing stop trade management strategy was used. Proft was finally taken on 19 April with a 2.3% profit on the trading account balance
The chart below shows trailing stop position and exit for this typical 5th wave swing trade over 3 days using our Elliott Wave indicatot suite. (Click on the image t enlarge in another window)