You cannot always just gloat about the good trades and setups and leave out the absolutely horrifying embarrassing mistakes out or that would not be fair. This is by far one of my worst trades EVER. It was a good setup which I screwed up.
Do not get wrong, some trades are bad because the money just was not there, there was nothing to get. Some are bad because an external event or news changes the direction of the trend for an instrument or an entire market. This was a good setup and the money was there but I screwed it up.
Here is the plan. Mid-September, I notice AKS is setting up for a pullback play. The price pulled back to prior 38.00 support and is not climbing back up towards the 41.90 resistance level. I do not want to be in before 41.90, I want to be in after, for the breakout. So I watch the price action for a while and on 9/19, it breaks right through so I hop in. That day, I am very busy on other things, my intraday quotes are not working and I am just NOT paying attention. I quickly get in at 43.86. Looking at the bar for that day, we quickly notice what a stupid entry level that was. Of course, because I am in so high, my risk management rules force me to set a stop right around 41.69, otherwise my exposure it too great. On September 25th, the price falls right through my stop and I sell, with a whopping -2.27 per share loss. To complete the insult, the following day the price bounces right back and the uptrend resumes.
Had I gotten in at a more reasonable level for the day, say around 42.10, my stop level would have been much lower (around 40.25) allowing the little 2 day shake out and keeping in to capture the uptrend action. Even trailing my stop, I would probably still be in right now and I would have 2.50/share gain to show for instead of this nightmare inducing loss.
Live and learn as they say. Happy trading!
