Bad luck after the GAP ? or was my mistake?

Hi guys i traded OSTK in nasdaq for the past month and yesterday I had a big LOst over a bearish Gap putting me almost at the break-even point and not knowing whether to sell or wait for a bounce over the gap. Overstock was downgraded by ML but i dont think that shouldn't have gapped down OSTK, but it did. I traded the bullish pennant and after that i was in again while the next bullish pennant formed, which was a mistake, i should have waited for the break out. CAn you guys check out the stock and tell me in your opinion if i had bad luck or i did something bad like not paying attention to the news.

I attach a 60 min. chart

dsalas, I wouldn't beat yourself up about this too much. Everyone makes losing trades all the time. How quickly did you stop out or are you annoyed because you didn't get out quickly enough?

Failed trades are always going to happen - don't worry about it.

You saw a pennant I see (with the benefit of hind sight) a possible double top. One of the problems with these types of patterns is that they can be subjective. Someone wrote once, and I tend to agree, that the market does repeat certain price patterns. But the out come and magnitude of the resulting moves is random. So as long as you limited your loss that's about the best you could have done once your in a position.

dsalas said:

Hi guys i traded OSTK in nasdaq for the past month and yesterday I had a big LOst over a bearish Gap putting me almost at the break-even point and not knowing whether to sell or wait for a bounce over the gap. Overstock was downgraded by ML but i dont think that shouldn't have gapped down OSTK, but it did. I traded the bullish pennant and after that i was in again while the next bullish pennant formed, which was a mistake, i should have waited for the break out. CAn you guys check out the stock and tell me in your opinion if i had bad luck or i did something bad like not paying attention to the news.

I attach a 60 min. chart

Click to expand...

it's easy to be wise after the event, but with the MACD in such obvious divergence from price, it might have paid to wait for a breakout to confirm trend momentum.
Never mind, live to fight another day, don't stress over it....

but just to rub it in, there did look like a double top forming, MACD was screaming it - it may have been worthwhile putting in a resting Sell Stop below the recent Low at 26.50 ? as well as a Buy Stop above the highs to catch a breakout.
I love Stop orders for Entries especially for obvious period of consolidation like your "pennant". If you don't know for sure which way price will break out, consider using above and below Stop Entries .....

rathcoole_exile said:

it's easy to be wise after the event, but with the MACD in such obvious divergence from price, it might have paid to wait for a breakout to confirm trend momentum.
Never mind, live to fight another day, don't stress over it....

but just to rub it in, there did look like a double top forming, MACD was screaming it - it may have been worthwhile putting in a resting Sell Stop below the recent Low at 26.50 ? as well as a Buy Stop above the highs to catch a breakout.
I love Stop orders for Entries

Click to expand...

sorry, image didn't load properly

Thanks guys, I sold at 25.30 trying to catch the resistance, let's see what it does tomorrow, many lower shadows on the dojis, apparently pushing up, but after the gap don't know for sure

any other opinions welcome.

dsalas said:

...but after the gap don't know for sure

Click to expand...

Nobody does...

Looks like a sell below 23.5 - that's right on the 50% retracement. (Just my opinion, nothing more).