Imagine someone called Xiao Han, who fries youtiao at a breakfast shop in the east of town. He gets up before dawn to knead the dough, and in the morning customers come one after another, so he rarely watches the market.
On November 6, $HMSTR closed at 0.0001298. Before closing up, he took a look, bought some at that closing price, and placed a sell order at 0.0001500. That selling price was 15.56% above his cost of 0.0001298.
On November 7, it opened at 0.0001298, exactly where it had closed on the 6th. The high that day reached 0.0001500, right at his sell price, and his order was filled.
The low that day was 0.0001275, 1.77% below his cost of 0.0001298. It closed at 0.0001327, 2.23% above the opening price of 0.0001298. From the high of 0.0001500, it fell back to the closing price of 0.0001327, a drop of 11.53%. His selling price was 0.0000173 above that day's closing price, or 13.04% higher.
Later, Xiao Han told the guys working the stall with him: “I bought at 0.0001298 on the 6th and placed a sell order at 0.0001500. On the 7th, the high hit exactly 0.0001500, and my order was filled—15.56% above my cost. It closed at 0.0001327, just 2.23% above my cost. From the high down to the close, it dropped 11.53%.”
If you had placed a sell order at a round-number price in advance, and the high that day happened to hit that price and fill your order, but the price closed back down to just 2.23% above your cost, would you feel you’d sold at the right time, or that it was just luck?
On November 6, $HMSTR closed at 0.0001298. Before closing up, he took a look, bought some at that closing price, and placed a sell order at 0.0001500. That selling price was 15.56% above his cost of 0.0001298.
On November 7, it opened at 0.0001298, exactly where it had closed on the 6th. The high that day reached 0.0001500, right at his sell price, and his order was filled.
The low that day was 0.0001275, 1.77% below his cost of 0.0001298. It closed at 0.0001327, 2.23% above the opening price of 0.0001298. From the high of 0.0001500, it fell back to the closing price of 0.0001327, a drop of 11.53%. His selling price was 0.0000173 above that day's closing price, or 13.04% higher.
Later, Xiao Han told the guys working the stall with him: “I bought at 0.0001298 on the 6th and placed a sell order at 0.0001500. On the 7th, the high hit exactly 0.0001500, and my order was filled—15.56% above my cost. It closed at 0.0001327, just 2.23% above my cost. From the high down to the close, it dropped 11.53%.”
If you had placed a sell order at a round-number price in advance, and the high that day happened to hit that price and fill your order, but the price closed back down to just 2.23% above your cost, would you feel you’d sold at the right time, or that it was just luck?