You might think trading is just a game of chance and luck… but that’s not true…

And while there is so much we can’t control like— a tweet from a politician, a remark from a central banker, or even, an attack on a Saudi oil field.  

Reality is crazier than fiction sometimes.

But instead of trying to forecast the unpredictable… your time is better spent by focusing on what you can control— your risk in the market.

Today, I’m going to run down a monster trade I recently closed out in Encana, a natural gas company whose stock price took off yesterday—as geopolitical tensions rise following the aftermath of a Saudi oil field attack on Saturday.

How to Take Advantage of Luck in the Market

Last week in my post on support and resistance breakout points… we looked at a chart for Encana Corp (ECA).

I labeled a support and resistance area on the chart of ECA… and showed the breakout point…

Here’s a quick recap…

Using support and resistance

There are a number of ways to use these levels in trading. One of my favorite uses is as a breakout point.

What I mean by that is when a stock breaks a major support or resistance level, it tends to break out and build momentum… thus continuing in that direction.

So I am looking to buy once it breaks above resistance or sell below support…

Take a look at the chart for ECA again.

I was watching this stock as it formed the range between the support and resistance lines I drew.

I wanted to see the price stall out from the downtrend and create a support level and base… as it did…

Next, I wanted to see the stock round out and begin a move up with moving average confirming this… After that, I used the break above resistance to confirm a buy signal in the stock.

In the chart below, you can see all of these factors lined up and lead into the break above resistance.

I actually took this trade on the Canadian exchange for ECA… ticker ECA.TO.

One of my favorite chart patterns setup in ECA.TO… the Rounded Bottom Breakout (RBB)…

You can learn the details of the setup by joining Petra Picks…

But you can see once the breakout point triggered my buy, I entered Sept 9, at $6.23.

What happened next?

Well… A Little Bit of Luck

Yesterday ECA.TO gapped up due to the surge in oil prices from the attacks on key Saudia Arabian oil facilities… knocking out half of the country’s oil capacity…

Wow… I must just be a lucky trader, right?

Well, yes and no…

You see, the setup for this trade is a favorite of mine… one that has consistently made me money throughout my career…

Did I know the attack would happen and it would gap up so nicely?

Of course not… so was it just luck?

Of course not… I was in the trade for a reason… a consistently profitable setup…

So a little bit of luck on the outcome… sure…

…but you see, I made my own luck by being prepared and sticking to setups that work for me… Stick to the setups and trading plans that make you money… and a little luck will follow…

Now, look at ARX.TO… I took this trade as well… but not on some whim or idea that oil was about to spike off some unforeseen circumstances…

This stock formed an RBB pattern and breakout… again, one of my favorites…

And what happened?

My consistently profitable setup benefited from a little luck this time…

So you don’t need to forecast the news, react after the fact, use some magic eight ball, or be lucky to make money…

You make your own luck by taking the right setups and let the rest work itself out.

I love being on the right side of a lucky move… but sometimes you are on the wrong side as well…

So it’s important not to blame the market and continue to trust your setups…

If you are ready to learn setups that will make you consistently profitable… and want my help on developing a trading plan, exercising discipline, along with a live-stream feed of my portfolio, as well as real-time trade alerts… then click below to join me and let’s start trading together.

 

JOIN NOW