Sold 250 HOD.TO @ $10.59, -0.95% Loss

Oil broke above \$75 resistance overnight. So my Horizons BetaPro Crude Oil Bear Plus ETF (HOD.TO) gapped down below my 10.60 mental stop at the open. I watched the U.S. DB Oil Fund (DBO) price actions this morning to time my exit as shown on Figure 1. While the price gapped beyond my stop, the volume was weak this morning (Figure 1). HOD.TO traded below \$10.40 on the gap momentum but I held on because of the low volume. [caption id="" align="aligncenter" width="570" caption="U.S. DB Oil Fund (DBO)"][][][/caption] I waited and waited until DBO traded near 24.50. This is a short term support level as shown in Figure 1. This was also the equivalent of my previous stop loss for HOD.TO at \$10.60. Even though I believe this is a stop hunt for the oil shorts because of the lackluster volume, I am not one to argue with my plan. I pegged my mental stop at 10.60 at the time of entry. HOD.TO broke below my stop price. I had three options:

  1. Ditch it at whatever price I can get.
  2. Exit on retracement to my original stop price.
  3. Exit on break-even.

For the reasons as discussed above, I picked option #2. Here's a calculation of my loss for this trade. (\$10.59 - \$10.92) * 250 shares = -\$82.5 - \$9.90 commission = -\$92.40 = -0.95% loss of account total. In any case, it looks as though my initial low-ball bid at 10.50 was a good entry point. I shouldn't have gotten impatient and entered at a short-term resistance price level.