We start by taking a look at TRIP on the 2 minute chart and analyze how trends can change. This leads us to our interview with fellow trader Nate Wilson. His initial short trade was almost at the top of the move and provided a fast pullback into profit for him. Even giving it some wiggle room due to the spread on the name, he was still stopped out relatively fast. It isn’t until he starts to set up his second trade (to the long side). Shortly after his entry, we see a huge red candle going against his position. He did not have a hard stop in and begins to average down. As he begins adding in, you can hear him trying to rationalize why it is okay to add at certain spots. After finally setting a hard stop loss, the stock approaches it quite closely and he adds one last time. He then goes down the hall to converse with a coworker and comes back to the surprise of the stock rallying and reducing his loss by about 1,000 dollars (from the +3,000 he was down). Now he starts to manage the trade in a good fashion. He started trailing up that hard stop and proceeded to walk away again. Every time he came back to the computer he moved the stop up again and helped reduce the loss he was expecting to take. He came back to find he actually was near his average and started to scale out and considered himself LUCKY! Let this be a lesson as to why you should always follow your initial plan.

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