While Oceanus, Polaris had fake breakouts identified, I found another stock that exudes the same behavior!
http://stockmarketmindgames.blogspot.sg/2013/06/polaris-devious-fake-breakouts.html
http://stockmarketmindgames.blogspot.sg/2013/06/oceanus-fake-breakouts.html
Nam Cheong had 3 fake breakouts identified over the past 6 months! Each time a fake breakouts was identified, the results were pretty detrimental and disappointing. It caused malaise and dismay to traders/investors if he/she has emotional barrier of cutting losses. It's even worse when the stock finally broke down further as it's harder to get detach from it to take a bigger loss. I was many times caught in a fake breakout especially when I was hopeful and greedy, however I am also quick to realize that and take small losses.
http://stockmarketmindgames.blogspot.sg/2013/06/polaris-profits-turned-to-losses.html
http://stockmarketmindgames.blogspot.sg/2013/03/yhm-small-loss.html
http://stockmarketmindgames.blogspot.sg/2013/06/midas-fake-volume.html
http://stockmarketmindgames.blogspot.sg/2013/05/innopac-chasing-at-breakouts.html
http://stockmarketmindgames.blogspot.sg/2013/04/we-holdings-crazy-or-fake-buying.html
The only time when my emotion got the best of me was when I lost 18k in Oceanus last year. I subconsciously allowed that fake breakout to degenerate and deplete my funds partially. My cut loss is usually pretty tight between 2-4 pips but this one trade my cut loss was 9 pips down!
http://stockmarketmindgames.blogspot.sg/2012/11/geo-energy-oceanus-losses-for-month.html
After all these losses, I learnt something very valuable. Fake Breakouts are actually pretty easily to identify, there is no need to see the opening and closing of the bar. Time, Speed and Activity are the truth and intangible key elements towards identifying a fake breakout. It's easy to spot fake breakouts however it's difficult to control one's temptation not to chase it because it's so alluring and appealing and the fear of losing out on a breakout is something that galvanize with your ever elusive, impalpable emotion.
In my Stock Operation Course, one of the chapter was to understand and learning how to identify fake breakouts and breakdowns. After all these painful yet valuable experience, I believe I am able to concisely demonstrate the mechanics behind it and impart this powerful knowledge to the students.
http://stockmarketmindgames.blogspot.sg/p/stock-operation-course-outline.html
Ronald K - Market Psychologist - The Big Speculator
