Focusing on the basics, the details and your time frames is no less important while observing a trade then actually trading it.
A chart of PPDI that was noted on stocktwits by alphatrends had a great triangle setting up at the daily time frame which I have a tendency to like to trade.
Though I wasn’t going to trade this breakout, I wanted to observe its trading action. I had seen a lot of triangles fail at first then reverse on other charts recently.
First error- I already was not observing objectively. I had it in my mind that the triangle would fail.
Thursday 14th came up and I’m zoomed in close to PPDI waiting for the chart to show me something- failure. It melts off the trend line and breaks lower hard.
Just as I had suspected, right? (question to self) I thought a perfect triangle was going to the bears.
As I continued to watch PPDI throughout the day my skepticism grew as the “end around” play was in effect.
My second premonition was also now coming true. The breakdown then reversal. Could I be right again? (question to self)
I was anticipating these moves as I watched the 5 min time frame. This chart below shows what I was watching into the open on 4/15/11.
The point is nothing that I thought would happen and saw happen actually did. I was wrong twice, not right. There was no failed breakout and reversal- at least at the daily time frame.
A step back was needed.
Here is what happened in PPDI at the daily time frame where the initial triangle had been flagged.
My trading time frame was too small to incorporate the large sell off on 4/14/11, my conscious was too invested in what I thought would happen rather than what was relative to the time frame the pattern resided in.
Even though I would not have bought after viewing the breakdown at the 5 min. time frame I also would not have bought after the very precise test of the daily time frame trend line I had become oblivious to.
Realizing this after the fact is one thing and that part sucks. But being able to learn from it and being more aware of it for future setups is another and that is still exciting.