How a failed trade worked out in the end

A classic example of how we go wrong in trades is mentioned here for a trade we attempted on Friday. Like it happens in bad luck it was shorted pretty late. A short at 146.5 was done and started going well but suddenly it turned up and never seemed to stop. We took another short at logical 150 with a pre-placed order. At this point the price was simply shooting up at terrific pace. Once the price over shot the day high another order was placed at 153.5 with a hope that this would not reach. It in fact got triggered but like usual fast rises, came off did a lower top where we found a little hope in squaring the trade in small loss. The price at the end of the day did some wonders by coming below the second shorting price which was our average and we did exit at some profit.

It may be worth noting that this was a freak trade that went right. Try never to attempt this as a rule. We had made that cardinal mistake of chasing a price which had receded a lot. The trade had been taken pretty late. Had it been earlier, perhaps this situation would not have come. Another trick here is not to take the full blow in quantity terms in the first trade itself. This will help you pyramid into a better position even if it is a losing one. Most would disagree with this but that is up to your style of trading. Any stock that is liable to see-saw is worth doing this type of gamble.