Chasing price

Chasing price means buying because price is rising, or selling because it is falling, rather than because your plan said to. The decision is made by the movement itself and by the feeling of missing out, not by a level or a signal you identified in advance.

The cost is structural, not emotional. Entering late means your stop loss has to sit much further away — behind the level the move started from — while the remaining distance to a sensible target has shrunk. The risk grows and the reward shrinks at exactly the same time.

It is also the point at which the traders who entered early are looking to take profit, so a chased entry often coincides with the first pullback.

Chasing is the most common way a good analysis turns into a losing trade. The view was right; the entry made the risk unworkable.

• Decide your entry area before the move begins, and let the trade go if price never returns to it.
• If the stop would have to sit further away than planned, the entry has already passed.
• A missed trade costs nothing; a chased trade costs money.
• Waiting for a pullback to a level converts a chase into a plan.

Educational guidance only — never a trading signal or recommendation.