how is it going?
I’ve been watching your blogs very frequently and using your strategies, they’ve been working well for me but I think I made a stupid mistake and got fozzled with a share called “Woodside Petroleum”. It’s an Australian share so i’ll link you to some charts.
http://img134.imageshack.us/img134/1530/wpl12zq.jpg – 3 month, Daily (captions are where I shorted it)
http://img134.imageshack.us/img134/1259/wpl26ha.jpg – 1 year, Weekly
I shorted the share at $45.70 when it kept failing the resistance of $46.10 on a diminishing volume (hoping it was a bear trap). It shot up the next day and I didn’t want to take that big of a loss, so I shorted it again at $46.40, and its hit $47.10 today D:!!
But then this middle-east tension started flaring and sent oil up.. although like you say watching the price action is the bottom line. So yeah if you could lend me your perspective it’d be great!
The first problem here is the stock is an an uptrend, above all the rising moving averages. We only know what resistance is AFTER the fact, once the stock has turned lower from that level. If you identified 4610 as resistance, your stop should have been 4615-4620 and you should have entered the stop order and let the market take you out. Now you have compounded the problem by adding to a losing positions, your personal psychology prevented you from admitting a loss early on and now you’ve got a larger issue on your hands. First thing you need to do is to take care of this problem, I cannot tell you how to trade. If it were me, I would just buy the stock back, print the chart out, make notes about how dumb I was and hang it on the wall in front of me as a reminder of the mistakes made here (shorting an uptrending stock, not honoring a stop and adding to a losing position). Leave it on that wall for a week or two so it sinks in and then try not to repeat the mistakes on future trades. Good luck.