San Domingo by Marguerite Henry

Peter Lundy has two joys in life: the rugged western plains where he has grown up and San Domingo, a Medicine Hat Stallion. The Indians believe such a horse is sacred -- that neither bullet nor arrow can harm its rider. As they explore the prairie together, a bond forms between Peter and San Domingo that can never be broken. But Peter's father, Jethro Lundy, knows only one love: bargaining. He trades San Domingo for a thoroughbred. How can Peter ever forgive his father? His only choice is to leave home forever!
 
- Goodreads Summary