This trade was a , and I decided to try to take a long on a break of the falling .
To properly manage risk, I try to make sure I'm aligned with the trend, and then I decide where the trade is likely to be wrong. The higher degree trend is an uptrend, and the in this case is likely to be a countertrend move. I placed the stop at the low of the original breakout bar, about 2% away from the entry. I waited to enter until the the stock broke back above the breakout bar's high. It's possible this was what I call a shakeout, and it goes back up but I didnt stick around to find out. Better to take a small loss and get back in if it turns around than to stay wrong while the loss gets bigger, making it increasingly harder to get out. In that case, I can re-enter at a new break of the recent high .