Should you or should you not chase?

[smallAxe]

I ain't talking about whether price will or will nConsider it this way.

1) There is already a STRONG trend in progress.

2) You plan to get in at the pullback, so you place your bid a few ticks above the support.

3) Price does retrace, but it stops just a few ticks above your entry and reverses (so you miss the trade).

4) Once it reverses, it reverses hard. It instantly rips higher by at least a few points (for example, 5 points for ES or $1 or more for stocks).

5) You intuitively know that it's not coming back down.

6) knowing that, SHOULD YOU CHASE IT OR NOT?

Sorry, I don't think I will be able to make trading decisions with that. Try this:

My universe has only 3 stocks: A, B, and C. And for a year:

- A +15% and closed at 200.
- B +5% and closed at 100.
- C -10% and closed at 50.

Which stock am I chase?

I will chase and buy A, no matter what the price. Why?

Because as a momentum trader with a holding period of several weeks to months or even years, basically my decisions are based on the premise: what goes up (down), will keep going up (down). And the stock A, as measured by the percentage, has gained more than its peers.

This means that stock A is said to have momentum. It doesn't matter if it's a pullback or support or reversal or breakout or whatever, I'll still buy stock A no matter what the price

Then... "Bet your faith!", the old pamphlet said. I think the point is how much am I allowed to bet on stock A?

But, I think that's another matter.

 

[tomkat22]

I've never believed in chasing but I swear to God stocks like HKD today make me think about re-considering my attitude. This stupid thing is gonna single-handedly bring back meme stocks.

 

[easymon1]

I've never believed in chasing but I swear to God stocks like HKD today make me think about re-considering my attitude. This stupid thing is gonna single-handedly bring back meme stocks.

Great example. What timeframe HKD chart are you looking at?
Depending on when you noticed this rocketship, and your chops, there are ways.
Those who undertake this type of thing, maybe consider downshifting your timeframe to look for a safe way in...
In the context of a 1minute chart there's no chase, it's just a product with action that can be traded in a responsible fashion.

 

[tomkat22]

What it did back in august spooked me so bad I've been afraid to touch it. But congrats to the guys who had big enough balls to play.

 

[easymon1]

What it did back in august spooked me so bad I've been afraid to touch it. But congrats to the guys who had big enough balls to play.

How do guys find these things?
Yeah if a guy is trading daily charts or 60m charts, see what you mean but...
What looks dangerous about that 1m chart, TK?
...compared to this 'back in august' Daily. Back indeed, loll.

 

[tomkat22]

I'm primarily a swing trader and do a lot of shorting so incidents like what happened in august are kinda spooky. Lots of shorts got their faces ripped off on that deal. Possibly an account-ending event for a few of them,margin calls aplenty. Way too volatile for my taste.

 

[TheDawn]

I've never believed in chasing but I swear to God stocks like HKD today make me think about re-considering my attitude. This stupid thing is gonna single-handedly bring back meme stocks.

It all depends on what it can do in the future. If the stock can potentially go much higher/lower, chasing is just trying to get on the ride.

 

[schizo]

It all depends on what it can do in the future. If the stock can potentially go much higher/lower, chasing is just trying to get on the ride.

That's exactly what you should have done on Friday. I betcha missed the move.

 

[TheDawn]

That's exactly what you should have done on Friday. I betcha missed the move.

Yes I did. I thought it was way too expensive and it's not the first time that something that's hyped up so much turned out to be a dud. Didn't want to start the new year with a loss. LOL Ah well, the year is still young. I have a whole year to make up for the lost opportunity.

 

[USDJPY]

On the E-mini for example, assuming everyone has the same signal, does any one have any idea after a buy signal occurs how many points higher is it ok to chase?