I hope you realize now after drop, that not only letting small loser turn into a big loser was wrong, but it is no longer "the perfect stock to me for trading" ..... currently. At least not for a long trade. Making a new low (past 6 months anyway) in a strong uptrending market (again past 6 months) should be a complete disqualifier to think long again. Bottom and top picking for a inexperienced trader is a sure way to blow a lot of trade equity fast.
No idea what stock this it, but looking at the lower highs and lower lows it has been making for some time now i probably would have waited until it made a new low before buying. But then i again i probably wouldn't even buy a stock that has been trending down like this in the first place. Anyway, almost all beginners make these mistakes, taking profits too early and letting losing trades run too long in the hopes it turn around. It probably won't be your last time either, unless you are a very fast learner .
That’s the thing…there was nothing! So my initial thought process was that since there is nothing, it WILL come back…which it did…right after I got out of it. But somewhere along the way when it went way under its norm that thought converted to “there might be some new aspect of trading going on that you haven’t come across…this could be bad” (being manipulated?). I let it go much farther than I normally would and then bailed. Then it stopped and reversed. For me and the future with this stock, because of that new low it’s done what I call “reset its norm”. I won’t play it for a while now until I see what it’s new norm is.
My view of it has certainly been reset. The only relevance that 6 months of this stock has for me is that’s a super consistent up down pattern. When I look at that chart I see no less than 6 beautiful money-makers (more actually). In fact I’ve played this stock a few times and made money. As of today I have about 30 stocks I watch with a similar pattern. I get out of the ones that just hit their peak and while they are heading back down, I’m riding some others on their way up. This is the first one I’ve had reset it’s norm but I'm sure it won’t be the last. What will be interesting for me is watching what this one does next.
I admit that I've had trades when my paranoia was in full swing in instances like you describe. Entering to see a drop then panic selling and watching it reverse multiple times in a row as if my trades were being tracked to reverse everything I was doing. . That's when you stop and do something else for the rest of the day.
Patterns makes sense - when we win, patterns don't make sense - when we lose. Or that is the thought that I used to allow to creep into my mind. That and manipulation. Better to think anything can and will happen but we each are responsible, not the market, as to what the eventual outcome will be. BTW what stock symbol was this?
Can you define what you pattern you were looking for and what you meant by resetting it's norm? All i see is a stock trending down with lower highs and lower lows that just made a new low, exactly like it has been doing for the entire timeframe that you showed in the chart, i really can't see anything out of the ordinary on that chart. It wasn't just up and down as you said, it was trending down so it was bound to make a new low sooner or later. The only comment i could make is that the new low came very rapid and maybe went a little bit lower then i would have expected. But then seeing how fast it got rejected it seems like just above the previous low could have been an interesting entry point on the long side. However without knowing what stock this is and without knowing more about the stock it's impossible to say.
Oh sorry this is $TME. When I look at that chart I see a constant swing from about $7 to about $8.50 over and over. That’s what I call 150 point playing field. For this stock I like to enter around $7 or so. On all the ones I play if I can pull off a 50-75 point upward run, I’m good. With a typical 150 point spread, and a pretty consistent pattern of this spread, I know I’m going to make money. And have. I had two flaws in my execution on this one. I went in at $7.16. It had traded sideways when I went in and since it was close to its normal bottom, and I was on a roll with some others, I went in saying “well maybe I won’t make as much but it will go up and making something is better than nothing plus I’m on a roll right now”. It was an emotional mistake in doing that. Normally I would not have gone in until under 7. That was first mistake and bigger was not getting out soon enough once I realized I missed. Once it got to “what the bell is going on here?” all things changed.
If you look at events surrounding this one, the only real negative I saw on it was they did have one of their executives leave a few weeks back but the reason he left didn’t appear to be anything significant so while I considered it, I didn’t consider it something that would drive it to a new low. In fact I'm still not sure what drove this to a new low. I did have some recent interaction with a stock that was clearly being manipulated so thought maybe someone was playing with this one too. Just don’t know. Still learning many things.
OMG, that is a classic pattern. Nothing new here: It will test the low, not the absolute low but the channel low. Then it will break that low as a stop run. Also often to a prelude to a good run up because the seller are done. If the volume is low and it moves up that is one thing to watch, if the volume is high, that is another. It has not really broken until it does the above, bounces, and then breaks through to a newer low. Notice the channel test and then the bounce. Then the break where the stop occurred. The channel test and the bounce is not the place to panic nor is the new low. These are standard "pain" points for the channel traders and the longs. So this is more a failure of chart reading and experience. On a channel trade, you can do 1/2 of the allocation at the channel low, then 1/2 at the break after the bounce. If you want to panic then you should be close to BE. Best entry is after the test-bounce-break and it looks like doom for the Longs, but slows moving down. Reasonable exit is on the way up BEFORE (the recent high - 10%). Then move onto another setup, don't look back. Notes: FOMO often cause an early entry on these trades. Long channels like this OFTEN break after a few tests.