Lesson Learned: The Cost of Chasing Gaps

I had a particularly rough morning a few years back, still vivid in my memory. $BAC opened significantly lower after some unexpected news. My gut, fueled by a prior string of small wins, screamed "oversold, immediate bounce!" I went in heavy, skipping my usual scaling, essentially trying to catch a falling knife on the first candle. Ignored my own rule about waiting for confirmation of a base.

The bounce never materialized with the strength I anticipated. The stock continued to grind lower, slowly at first, then picked up steam. I held on, rationalizing that it 'had' to turn around, even moving my stop down once. Ended up taking a much larger loss than my typical risk tolerance, all because I broke multiple personal rules trying to front-run a move that simply wasn't ready. The biggest takeaway: patience isn't just about waiting for an entry; it's also about letting the market prove itself before committing significant capital, especially after a news-driven gap.