SUNE Trade on Jun 17, 2014 13:45 from pstark89: Tradervue User Stock Trades.

First, the good things - this is potentially a big opportunity, because it already broke the long-term price level @22.0, and if it breaks up, there's nothing but air above. Keep it on your watch list, as it may very well break up in 1-2 days.

But that said, there are a couple of things that would have made me hesitate to get into this one (at least on this day).

First, in this case, the 22.5 level was not the highest resistance level - the highest resistance was at 22.6 (the high of day was at 22.6, not 22.5). So even if it broke 22.5, there's a decent chance it would have stopped or pulled back from 22.6. This means that the reward:risk ratio probably wasn't too good, unless you set a really tight stop at just 5 cents (which in your case would have put your stop at about 22.45, rather than 22.3).

Second, although it was tapping the 22.5 level, it wasn't coiling up beneath that level. It just tapped it a few times, and each time it tapped that level, it came right back down. The supply usually doesn't get used up unless the price stays near the breakout level for a long time, or does a lot of taps (usually it takes more than a few taps if it's not coiled up beneath).

Now look at it from the opposite perspective - where would you have shorted it? In fact, this is a play where I would probably have shorted it where you first entered it for the long. I would have expected a pullback from 22.5 (which is what happened).

Final Note: Consider getting out as soon as it doesn't behave the way you expect it to.

For your 2nd entry, you had the right idea to anticipate the entry to try and get a better price - no fault there. But when it went sideways at 22.4 instead of re-testing the 22.5 level right away, I personally would have probably gotten out. Not because I would have expected it to drop, but just because it didn't behave the way I expected when I first entered the trade.

One of the things I've learned to do - acting with an abundance of caution - is to decide when I enter a trade what I want/expect the stock to do. If it doesn't do what I expect it to do, I usually get out - even if there's no other reason to get out. At the very least, I re-evaluate it, asking myself the question "if I wasn't already in this stock, would I get into it now?" If the answer is no, then I definitely get out. If the answer is yes, then I'll probably stay in - but based on where the stock is now, not where it was when I actually entered.

One thing I've heard time and time again from successful traders, including the BoWS team, is to think more about how much you can lose than about how much you can gain. If you'd set a stop on your first entry based on your reward:risk ratio, you would still have lost on the trade, but you would have lost 1/3 as much - or you might have decided not to enter the trade at all. Your 2nd entry had a much better R:R ratio, it just went sideways, and it looks like maybe you just held it too long instead of getting out quickly when it didn't go the way you expected it to.