Following our trading guidelines, we’ll walk through two recent trades from the Compounding Growth Mastery, our closed UNG trade and a trade we opened in the S&P 500 (SPX) Friday morning.
As for the UNG trade, we got long at the daily 21 exponential moving average (EMA). Our profit target was a move up to 2+ average true ranges (ATR). We knew that we wanted to cut the trade loose once UNG traded below the daily 21 EMA. These are the types of factors we must take into consideration BEFORE entering any setup.
The reason for taking this trade was we had:
- Support above the daily 21 EMA
- Lower time frame buy signals (Big 3 Indicator)
- Bullish 4-hour squeeze
This is my go-to trade setup.
After the flush Friday morning, the Big 3 Buy signals went away, UNG was hit, and we exited the trade for a loss. Maybe you’ve thought to yourself, “What if it bounces back or what if I’m just getting shaken out?”
This is the discipline we must have as traders. That is why having a trading plan is vital for success. If you’ve felt like you’ve been chasing the market and experiencing FOMO, bookmark this video as we all need reminders daily to stick to the checklist and exit when our rules are broken.
In the video above, we’ll break down the UNG and SPX trades and review what would happen if I hadn’t excited the trade once my rules were broken.
Stay Focused!