In fairness to myself, this trade was taken before my introduction to Wyckoff Analytics.  It is an example of the misapplication of two trading axioms 1) buy as a stock breaks out to new highs and 2) buy high relative strength.  I adhered to both of these, and top-ticked the stock – as a BUY!

The weekly chart below gives a history of the stock from its date of issue in early 2016.  The stock is a glamour story; a new approach to health care – gene editing.

After buying the stock at the top of an eleven-month channel, I mostly refused to heed the obvious signs when it abruptly broke down from that channel two weeks after my mistimed buys.  Instead, I read all the hype about gene editing and convinced myself that I had only made a temporary mistake (instead of hearing the message of the market).  I then compounded my error by buying at the top of the weak hands’ rally from that first reaction low.  Fortunately, my sense of self-preservation whispered to me that I was all wrong, and I sold everything out the next day (for a 6.5% net loss on the position and a .4% hit to my account equity).

Next, I want to zoom in on the daily chart and analyze this trade in more detail, and also explore some alternative trades that I can now see.  The notations in blue are my actual trades and the notations in orange are my analysis.

Momentum is clearly powerful in Phase |A| and early Phase |B|.  There is abundant liquidity being provided by excited Weak Hands.  Institutions are using this as an opportunity to SELL.  This establishes the bias of the developing TR as BEARISH and DISTRIBUTIONAL.  A short seller would have had several opportunities to establish profitable swing trades beginning with Phase |C|.

I noted on the chart where I signed up for Roman’s 2018 WTC course, and I believe that I am much better equipped today to recognize the bias, timing and character of this TR as it developed.

One final observation: since the selling capitulation in December, EDIT has been in a consolidation that resembles an apex and bears scrutiny (see the right side of the weekly chart).  There may indeed be a future for gene editing…

I am not afraid of making mistakes.  Everybody does it.  I will take the lessons learned and improve my future trading results.