Good evening, folks. This is a trade review on $SOHU. $SOHU was a huge runner Friday morning off its initial gap down, which was 5-6%. This is one of my favorite setups for catching knives. It’s the washout setup that I’ve used for years. After initial gap down to the $47 level at the open, $SOHU had a huge short squeeze, shooting up to $53.65. That’s a 10% reversal in a matter of an hour.
The only issue on this trade was that instead of celebrating a huge victory we took a $1.00 loss on it; I was in a rush to get my trading going and kept my stop in the wrong place. If I had focused more on the intraday chart, I would have realized that 50 cents lower would have been the true stop and kept us in the trade for a huge gain.
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