Each week, our Editor runs scans within the Trading Edge Platform and identifies charts of interest for members. From the scan results he selects trading opportunities for members and identifies potential prices for Entries, Stops and Profit targets using TED’s unique Bull and Bear Alert triggers combined with support and resistance levels.

APA Group (APA) was identified as a trading opportunity on the 5th March after a recent Flex term alert.  Prior to this price had broken up through a resistance level at the $8.20 area and in February had come back to re-test the level.  A second retest on the 27th February was met with strong buying, a sound reversal signal, especially when it appears above a support/resistance level.

A bullish Flex term alert occurred on the 2nd March and we flagged an entry zone below the price action of the 3rd March in anticipation of a small pullback to make the risk:reward ratio of the trade worth while.  The proposed entry zone was between $8.50 and $8.65 and our position was filled on the 6th March at $8.64.  The stop for the trade was $8.18 – just below the twice tested support/resistance line.  A potential profit target of  just under previous highs at $9.75  was also flagged.

After entry prices continued to trend strongly with only a few small pullbacks.

On the 1st June there was a wide ranging bullish day which saw prices push up and slightly through our profit target at $9.75 and our trade was closed.  This strong bullish day was followed by a day of indecision (the small doji* day on the 2nd June) and then 3 bearish candles the following week. The stock was held for 85 days for a 12.5% return.

If you were using some sort of trailing stop to manage this trade there would have certainly been some profits ‘given back’ before an exit was triggered but of course price action could easily just have gone sideways here at the new resistance level.  The decision to use either a profit target exit or a trailing type stop is a personal one and it is a decision that should be documented in your trade plan for every trade.  We like to take profits where offered for our Editors Select Trade Setups and look for other trading opportunities that offer good risk:reward ratios.

If you would like to learn more about the Trading Edge Dynamics platform and take advantage of our Editors Select Trade Setups, sign up for a free 14 day free trial.

* A doji is a Japanese term for a type of candlestick where the open and close are very close – it is usually a sign of indecision.