Phillips Carbon - Positional - a mistake I corrected
Sharing a mistake I made and how I corrected it.
On Weekly chart, I saw a nice rounding botton pattern and stock close to ATH with a BO candle of 26 July 2021. I also saw volume expansion on that day as well as expansion since the candle of 18 January 2021.
I went long at approx. 270.
Although RSI was above 60, what I failed to see was RSI High was flat. And price was making a high with flat RSI. That was my first mistake.
The second mistake was my decision was based on upward slope of MA line and entry price was roughly 25% away from 30 Weekly MA.
The third mistake I made was I have a rule where I add 20-25% corpus on BO with Volumes and slowly add the rest on retracement based on price action. In this case, I added 75% at one go. I also didn't see the Daily chart for entry. A lower timeframe is recommended as ideal for entry, so for someone like me who invests positionally basis Weekly charts, I should have taken cognizance of the price action on Daily.
We don't know what will happen in future. Nifty 50 is on steroids and maybe price will go up or it may retrace and form a cup and handle pattern which is a better confirmation in terms of probability.
At my entry price my risk was way too high to add 75% at one go (If I had added only 20-25% this would be a safe trade). And as investors and traders, we have to manage risk and protect capital.
You may wonder why did I do this? It was my mind that was excited and momentarily I saw a prominent site where the stock had made the day's high. I make a conscious effort to not follow the calls given by research agencies or stock news sites. There is a reason behind this- news comes later, charts inform us earlier.
I exited a part at cost and remain invested only 25% of my corpus for this stock. If stock retraces to the area of better Risk Reward zone, I will add more.
Disl: This is not an investment or trading buy / sell advice. The purpose of this is educational- to share knowledge and learn from the community members. Please consult your investment advisor for any investment related advice.
On Weekly chart, I saw a nice rounding botton pattern and stock close to ATH with a BO candle of 26 July 2021. I also saw volume expansion on that day as well as expansion since the candle of 18 January 2021.
I went long at approx. 270.
Although RSI was above 60, what I failed to see was RSI High was flat. And price was making a high with flat RSI. That was my first mistake.
The second mistake was my decision was based on upward slope of MA line and entry price was roughly 25% away from 30 Weekly MA.
The third mistake I made was I have a rule where I add 20-25% corpus on BO with Volumes and slowly add the rest on retracement based on price action. In this case, I added 75% at one go. I also didn't see the Daily chart for entry. A lower timeframe is recommended as ideal for entry, so for someone like me who invests positionally basis Weekly charts, I should have taken cognizance of the price action on Daily.
We don't know what will happen in future. Nifty 50 is on steroids and maybe price will go up or it may retrace and form a cup and handle pattern which is a better confirmation in terms of probability.
At my entry price my risk was way too high to add 75% at one go (If I had added only 20-25% this would be a safe trade). And as investors and traders, we have to manage risk and protect capital.
You may wonder why did I do this? It was my mind that was excited and momentarily I saw a prominent site where the stock had made the day's high. I make a conscious effort to not follow the calls given by research agencies or stock news sites. There is a reason behind this- news comes later, charts inform us earlier.
I exited a part at cost and remain invested only 25% of my corpus for this stock. If stock retraces to the area of better Risk Reward zone, I will add more.
Disl: This is not an investment or trading buy / sell advice. The purpose of this is educational- to share knowledge and learn from the community members. Please consult your investment advisor for any investment related advice.