Revenge Trade in AEM

It was like trading in a ghost town to begin the day. Thin spreads seemed to haunt most of the securities I was watching. I sure didn’t want to churn commisions for my broker, so traded light. As usual, the next two days will slow down as traders wait for the FOMC decision on Wednesday. For a relatively tight trading range most of the day, there were a few good trading setups.

The gold stock AEM has been in a freefall for seven days and was due for a bounce after almost touching it’s 200 day moving average.

Since gold stocks were acting strong I looked for an intraday entry, instead of waiting for a higher-high to trigger on the daily chart. The 15-minute chart provided a bullish pattern for entry.

The risk, R on this trade after entry was equal to .18. The target was set for 1 point, and a stop set below the low. As the trade evolved, 1/2 was set as a trailing stop using the bottom of each candlestick. 1/2 the shares were stopped at the 12:30 big red bar down. nfortunately, AEM snapped right back up. That’s what stops are for though, and you always take them. The rest of the shares hit the target for a successful trade of 4.1 R.

The trade in MZZ is still alive. A stop will be placed below today’s low and the ETF monitored intraday.