Hey trader,
Wednesday gave the market its best day in three months after the midterm elections. Thursday took all of it back and then some.
The S&P 500 headed for its worst day since April 2025, down more than 3%. Days like this can wipe out an account, especially if you’re chasing a trade.
You can always choose to sit out. You don’t have to, as long as risk management comes first.
On a wild day, that starts with the price you pay to get in.
Fast markets make it tempting to chase. Chasing a trade means buying after price has already run past your planned entry.
Chasing a trade feels like you’re saving it. A few cents can quietly hurt you in two places at once.
Crude put me to that test Thursday morning. It broke out and hovered just above my order, threatening to leave without me.
Here’s how I handled it, and the check I run before every entry.
Why Chasing A Trade Costs You Twice
Every trade I take has three prices before I click anything. There’s the entry, the stop where I’m wrong, and the target where I get paid.
The chart sets the stop and the target. Neither one moves because you got in late.
Every cent you pay above your entry pushes you farther from your stop. That same cent also shrinks the distance to your target.
Chasing a trade leaves you risking more money for less reward.
Every cent you chase gets added to your risk and taken from your reward.
Fast days make chasing a trade even more expensive. Thursday’s tape had huge swings, and your fill can drift far from your plan in seconds.
That’s why I treat my entry price as part of my risk management on days like Thursday. It matters as much as my stop.
The Crude Trade I Wouldn’t Chase
Crude broke out of a channel Thursday morning. A channel is a pair of parallel lines that contain price as it trends.
The breakout happened at the channel line, 89.92. I wanted my entry right there, on a pullback to the level where the move started.
I placed a limit order at 89.92, which only fills at my price or better. My stop sat at 89.25, with my target at the channel top, 91.80.
I told the room that was 70 cents of risk for a much bigger target. The exact math is 67 cents of risk against $1.88 of reward, or about 2.8 to 1.
I also told the room how I’d handle it. “If it doesn’t come back to the channel, you might have to miss it.”
Crude didn’t come back right away. It sat dead on 90 as volume dried up after a 3,000-contract breakout candle.
That’s the moment chasing a trade gets tempting.
I told the room I didn’t want to chase it. I also admitted it could explode higher without me.
I didn’t want to jump the gun, so I waited. Price came back to my line, and I filled at 89.92.
I never reported an exit on that crude long before the session ended, so I won’t claim a result on it.
What Chasing A Trade Would Have Cost Me
Say I’d paid 90.00 instead, right where crude was sitting. With the same stop and target, my risk grows to 75 cents and my reward shrinks to $1.80.
That trims the trade from about 2.8 to 1 down to 2.4 to 1. Eight cents doesn’t sound like much until you see both numbers move against you.
Now say crude had popped and I’d chased it to 90.30. This one’s hypothetical, but it shows where chasing a trade leads.
My risk would jump to $1.05, and my reward would fall to $1.50. The trade drops to about 1.4 to 1.
That’s half the reward-to-risk I planned for, on the exact same chart. Nothing about the setup changed except my fill.
The loss side hurts the most on a day like Thursday. A stop $1.05 away costs about 57% more than one 67 cents away.
Run This Check Before Your Next Entry
Run this on any chart to stop chasing a trade before it costs you:
- Price the trade before the breakout. Mark your entry, stop and target, then divide the reward by the risk.
- Use a limit order at your line. A market order buys wherever price happens to be, and that’s how chasing happens.
- Rerun the math if price leaves without you. Plug in the price you’d actually pay, and skip the trade if the ratio no longer works.
If price doesn’t come back to my line, I’d rather miss the trade than overpay for it.
Missing a winner stings. Overpaying on a loser after chasing a trade costs more than you planned to lose.
That’s my line, and it doesn’t have to be yours.
On Thursday, the room watched me sit on that 89.92 order while crude hovered above it. They heard my stop and target before the fill and every adjustment after it.
Inside the 10% Club, every trade I call comes with an entry, a stop and a target. You hear why I wait instead of chasing a trade while the market’s still open.
That’s how I stay in the game on days like Thursday.
Set your entry before the breakout, and let price come back to you.
Blake Young
Senior Market Strategist, TheoTRADE
