December 16th, 2020

Today we have to take the good with the bad. We were triggered into a trade, but as I looked at it I realised I had made a mistake.

It happens. There have been at least two so far this year.

Let’s take a look at the missed opportunity.


On the right hand side you can see that in the clever yellow box we cleared resistance (a candle CLOSED above the resistance level). A stop-buy was put in just above that level at $35.53. We were then triggered in as the price touched that level. We then put in a trailing stop at $30.05. $5.48 below the trade price.

The details of the trade are as follows:

$14,000 (10% of the portfolio)/ $35.53 = 394.03, rounded to 400 shares.

Risk = $5.48 X 400 shares = $2192 (<$2,800 (2% of the portfolio))

Therefore based on our process we are in the trade and wishing it well.

The mistake: the look back period for resistance is usually 60 days. I have placed black vertical lines 60 days apart. The level of resistance we could have used was $30.26.

This means based on our process we could have gotten in $2.20 cheaper than we did.

We could be half way to breakeven by now.

These things happen. All we can do is emulate Taylor Swift and “Shake it off”.

Any questions, drop me a line:

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