Case Study: A Successful Trade on Apple Inc. (AAPL)

As a seasoned stock trader, I’d like to share with you a real-life example of a successful trade I made on Apple Inc. (AAPL) in 2020. This trade demonstrates a combination of technical analysis, risk management, and patience.

Trade Setup

In early August 2020, I noticed that AAPL was forming a bullish ascending triangle pattern on its daily chart. The stock had been consolidating for several weeks, and I believed it was poised for a breakout.

Entry

On August 10, 2020, AAPL broke out above the resistance level of $456.50, which was the upper trend line of the ascending triangle. I entered a long position at $458.50, with a stop-loss at $446.50, just below the previous support level.

Trade Management

As the trade progressed, I adjusted my stop-loss to lock in profits. On August 17, 2020, AAPL reached a new high of $474.50, and I raised my stop-loss to $463.50. This ensured that I would at least break even if the stock pulled back.

Exit

On August 31, 2020, AAPL reached a new all-time high of $499.23. I decided to take profits and closed my long position at $496.50.

Results

This trade resulted in a profit of $38.00 per share, or a 8.3% return on investment (ROI). The trade duration was approximately 21 days, which is relatively short-term.

Key Takeaways

1. Technical analysis: The ascending triangle pattern provided a clear indication of a potential breakout.
2. Risk management: Setting a stop-loss at the beginning of the trade and adjusting it as the trade progressed helped minimize potential losses.
3. Patience: Allowing the trade to unfold and not getting impatient or greedy helped me maximize profits.