The Fourth: Another Fakeout

Summary

I should really review my own blog before I trade. I made a mistake purchasing a fakeout even after clear red flags. Shit like this is really going to take me out of the game for good. The only positive to take from this was I had a clear stop and I was patient. Everything else was just reading the chart incorrectly.

Take a look at Breakouts Vs. Fakeouts to see what I mean.

Ticker: GSS

This is the right way to play a swing. Buy early while it is consolidation. Have a clear stop and be patient for the breakout.

Note: Since today was a red day, I should have just set my limit lower and wait for it to get filled. I rushed to buy and bought it a little higher than I should have. 

Note: I think I am more comfortable with these types of stocks because they are nice and steady. When they breakout, they breakout. 

Ticker: TVIX 

I was impatient and bought in because I was reckless. This is not the way to trade. 

Not really a clear breakout, but after the fact. I just wanted to say that it looks like I was chasing here. I should have just told myself that I was chasing and waited for a better entry. $2.02 was a good entry for this stock. Not $2.12.The only way I wouldn't be chasing would be if I was buying on dips and this was really a breakout.

 

So I bought in and ignored the first red flag because I was long biased with this stock. I should have been short because it did hit resistance and it did NOT have a clear breakout. I should have let it test it out further before diving in.

Where did I see this type of move before? Oh right, here. This stock and ZNGA had similar volume and I just fucking ignored it. I must be an idiot for buying in. 

Note: The only positive here was I tested my patience. I should have killed the trader sooner after I recognized the descending triangle. Fuck me though, this was an amateur mistake. Another thing is my risk management got a little better which is good.

Please let me know if you have any comments or opinions. I would like to know if you have spotted any mistakes in my logic.