Tuesday, May 25, 2010

Anatomy Of A Trade - IAG

IAG was one of those rare trades that seemed like a layup. After a clear 3 wave decline, IAG formed a base that lasted about 10 weeks with a handle. My expectation was for a test of the previous high. Gold was heading for a retest of its previous high as well, so overall the trade appeared to be a high probability setup. My plan was to buy a breakout above the high of the handle, to exit 2/3 on the first signs of exhaustion and the rest near the previous high. In retrospect I could have probably held on for one more day, but everything is clear in retrospect. Overall, this was a respectable trade and I would definitely take another similar setup if I see it.

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