"Going up for a few days" is a sign of strength. Trend followers are looking to join the trend or add to their winning positions. Your bias should be long UNLESS something in the price action tells you the trend is going to take a breather, or possibly reverse. Let the opening 5 minutes give you a hint. The first 5 minutes CLF closes above the previous day's closing price. Sign of more strength. Go long, or if you only want to take a short position, then wait for a reason to short.
Look at that 3-min chart again. You shorted after price moved ABOVE the previous bar's high. That's a continuation move, not a reversal signal. You thought price was too high, but the price action is telling you that buyers think the price is still a good bargain! Let the price action tell you what to do.
You HAVE to honor your stops. The problem is that you got into a trade without a real signal and placed an arbitrary .20 cent stop. You were lucky that price came back to allow you to escape with a profit. DO NOT let that fact influence future trades! You will eventually get killed. "CLF cannot keep advancing" Why not? It advanced through the previous day's close, then through the previous day's high, then through previous resistance of 51.60, then through resistance before that of 52.98. Where is the next resistance level for it to test after 52.98? It's at 55.40. And it actually came pretty close yesterday. What if it broke through 55.40 yesterday? Do you know where the next resistance level is after that? 80.52
A lot of counter-trend traders thought AIG was too high on Aug 26th when it hit 36.00 because it was 13.00 earlier in the month and could not keep advancing. In 2 more days it advanced to almost 56.00 before taking a breather and many accounts took heavy losses on the way up. You don't want to play this game without honoring your stops.
It's good you learned that there's no such thing as too low or too high. That can be your opinion, but as a day trader looking to capture short term moves, you want to follow the opinion of the crowd. It's fine to fade the opinion of the crowd, just make sure you have a real reason such as lower high/higher low.
Learn to get into trades in which the price action actually signals a move in a certain direction. That way, if your stop is hit it's because a REAL SETUP has been invalidated. If you short a lower high and price reverses and moves back above that high, it's no longer a short setup and you're stopped out for a good reason.
Think about this because what you did makes no sense. If your stop was 201.80 (perfect stop placement, too), why would you be willing to accept a larger loss? Previous support was broken at your stop price.
This wasn't a bad trade either because AAPL was in a fairly narrow consolidation range on low volume. The big money would move it one way or the other. You chose the long side, and you also chose an excellent stop, just below the internal double bottom, and this was also a support level from earlier in the day. A break down of this price level would mean a test of the day's low. A breakdown would mean go short right away. In fact, when trading a consolidation range BEFORE the actual breakout occurs, you could place a double-size sell stop at that price, which would close your long position at a limited loss and placed you in the direction of the breakdown which continued to within .04 cents of the day's low.
I don't recommend using a 1-min chart to find setups by the way. Maybe use it to guide your entries, but use a 3-min or 5-min chart to day trade with.
