I made a big mistake today getting into this trade. I Missed my entry around 37.70's. All I knew is that the stock already broke through its 52week low on Friday and does about 70000 avg volume, the 52week low was around 39.00 and in the last 5 days was trading around 45. I knew I got a bad entry when I was getting more shares than I wanted. The stock has a 8-10 cent spread. I'm just not understanding my risk and reward if I'm short @ 37.28 how much should I risk if the trade goes against me? Would this be a gamble trade if I held it just a bit longer? If I missed my entry should I wait for a better setup? what do you usually do when you get in on a bad entry? Do you usually just wait for a pull back?
(1) If you're trading in the direction of the primary trend, it can be "safer" to hold on longer if that trend resumes. (2) Instead of initiating positions AFTER a breakdown has occured, it's better to anticipate where the breakdown is likely/supposed to occur. (3) You can also have an expectation that the stock you're trading will re-test the previous breakdown level before resuming its primary trend. (4) Trade stocks that have higher average daily volume in order to reduce slippage on your trades.
If you miss something like that it's missed, jumping in late is not good if your plan does not include it. I guess what you really did was to stray from the plan.. once you stray from the plan it is good to get back with the plan.