Shared by
SonoFusion
This wasn't a smart trade, it was a FOMO trade. The stock had been moving up and I hadn't even been watching it very long. I had been following other stocks which hadn't given me an opportunity and I just desperately wanted to make a profitable trade. I was up for the day and thought to myself, if I could just double down and get a little more of a move on this stock... I would be great for the day. (Never take a trade when that is your thought process)
The stock had multiple indecision candles, was tired from a big run up and was due for a pullback. Granted the stock started going sideways for a bit here, even if it hadn't I probably would have been stopped out on the pullback.
Psychology:
I was gambling, I wasn't trading. I wanted a win vs saw an opportunity.
Learning Point:
I need to do a better job of entering trades on a buy / sell signal and using firm / real levels of support / resistance for the stop loss. I am finding myself too often taking a trade based on an X risk amount I am wiling to give vs based on a solid thesis. To Trade A Plan, You Need A Plan....
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2022-11-22 10:37:38 | BABA | buy | $76.680 | long |
| 2022-11-22 10:38:09 | BABA | sell | $76.470 | 0 |
Comments
SonoFusion
@elltrades
Thank you for the comments, I don't mind the input at all! That is how we all learn is by sharing input and advice, it is much appreciated!
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Nice analysis and critiquing yourself there!
Another couple of points I would add to this if you don't mind me commenting:
- You're buying LONGs into a potential double top from open which is always a high-risk trade.
- Extended away from VWAP.
- I don't like the RSI but its overbought on the 1 min.
- The volume came in on the candle before your entry but failed to close above the previous candles. This can often be a sign of 'ending bar volume'. [Learnt from a guy called LiveTraders on Youtube].