Thursday, October 30, 2014

Stopped out of HYGS-- Lessons in narrowly missing a great trade.

Arrgh!  I was absolutely right on this reversal but my stop just got nicked before It took off.

Stopped at 14.89.  -- The absolute low of the day.
The next day +1.91 it would go as high as 17.50 within another 2.

Entry: $16.04
Exit: $14.89  - $1.15 .9R

There are a few ways I can choose to feel about this trade.  At one time I may have felt regret or chose to put a wider stop in taken more risk etc...  I could take pride in that I was right about the reversal.  But pride is not a consolation prize when money is lost.

Here is what I now assess this trade.  I used the wrong setup.  I was thinking that this would behave like the big % movers that  the fishhook set up works so well on.   So I got my fishhook entry signal and took it (causing me to buy high) I didn't put a ton of size so I could enjoy a wide stop.

What I see now is that a big% move out of a down trend is not appropriate for a Fishhook.  Rather it is a trend termination signal. This means I should have waited for the consolidation (i.e. RWLK) and bought the range expansion. Had I done so this would have worked beautiful.  As it turns out, it's a lesson learned.

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