This is about our trade in $P. This is one of my favorite types of setups – the bottom bounce. Everything had lined up perfectly. I was a day early on the trade, but I knew I was a day early, so I went in with that as my plan. The setup and the risk/reward ratio looked good.
Every trade has 3 parts: entry, exit, and the management of the trade. We had the right idea on the entry and exit, but totally mismanaged the trade. I let the excitement that was happening in the general indices scare me out of my position (this can happen). I also removed my stop and the exact spot I probably should have been buying as I sold right into a demand zone. Lo and behold, literally minutes after I sold the stock started spiking as it rightly should have. Even then, I still sat there all day watching the stock all annoyed that I sold it!
I give myself a D- on the trade. The only reason I don’t give myself an F is because the loss was small — $200 — and I’m still trying to make myself feel better!
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Good review. I remember on Friday when you bought this I couldn’t figure out why you were buying at $8.77 as it was tough to see that level on the daily and also even the 5 min since it didn’t go back far enough. Perfect example of why I should be making it a point to also check the 30 min timeframe.
A question about where you set your stop: When I set mine, I typically hover over the candles and find the low of the zone and set my stop there. Is that what you do also? Or do you just pick a general area (in this case $8.50) and then adjust it as the trade moves one way or another to compensate? I know you use mental stops but for someone using hard stops like me is finding the low of the zone a good way to handle it?
Thanks!
excellent setup though!
I like to pick a support are and put it under there. very rarely will i use an indicivual candle as im loooking to put my stop under a spot where demand should flow if it gets close to it