The moment I saw the MSFT chart this afternoon it was already down over 4% due to earnings but was bouncing nicely and I felt it should retest the horizontal resistance at 25.77. Immediately I placed a market order, recalling every time I hesitated I’d be late to the trend and became the bag holder. Well, amazingly, 10 minutes later I realized I was the bagholder despite the randomness of the timing! I stuck with the trade anyway but mentally felt defeated. The stop was at 25.48, a good margin below the 20 ma on the 5 minute chart that I traded.
I resisted my temptation to average down as MSFT slid down. After I barely escaped the first approach to my stop by 3 cents, followed by a back-to-back hammer/doji above the 20 ma, I finally doubled down, sticking with the original stop and added a limit to sell half at the break-even. This is my “fire-fighting” modus operandi.
I escaped my stop order from getting hit 3 more times before I had my first relief, selling 1/2 position at breakeven. And finally it reached my original target during a closing spike out of no where and closing at 25.99. I left much on the table, but after hours it was immediately back down to 25.83 level so I didn’t feel so bad.