A Textbook Trade needs Patience

As I always say, trading requires the patience of a saint and the discipline of a soldier. This trade on silver (XAGUSD) is a great example of that.

It's not often that you see a textbook-perfect setup, but they can be found. When you spot such a high probability trade, it's easy to believe that it will play out smooth and fast - the way charts always look in the books and blogs. The truth is, the trades like this will test your patience far more than any other!

Remember, if you can see this clean, clear setup, other retailers can too. More importantly, so can the institutions. So, there is a high likelihood that they will attempt to shake you out of the trade before they move price in that direction. Let's look at this Bullish Divergence on Silver that we spotted on 14th Jan as an example.

Bullish divergence trade on Silver - a textbook trade.

1. Spotted the bullish divergence on the 4hr chart. It formed at a precise 61.8 Fibonacci support level, thus increasing the odds.

Bullish Divergence on Silver - Setup

2. We set the trade parameters for Entry, Stop & Target as per the Fibonacci ratios, & placed the Buy order.

Bullish Divergence on Silver - Entry, Stop, Target levels

3. Trade executed successfully. It took almost 2 weeks to reach the target level, longer than expected.

At various points during the trade, as you can see from the above chart image, price consolidated, retraced, and at one point even came extremely close to the target level and dropped again. It is during these times when a trader's patience and confidence in his/her own analysis is tested. It is vital to practice keeping your expectation and emotion out of your analysis, and patiently allowing your trade to play out for the right setups.

Always remember - when the odds are in the favour of the trade, its worth hanging on -;))