In simple terms
“I chased the price” means entering after a rapid move and accepting worse conditions than planned, often because the opportunity appears to be disappearing. Entry moves away from the intended level, and the stop may become more expensive in monetary terms.
How to identify it
Compare plan and fill: intended trigger, maximum acceptable price, distance to invalidation, and size. If the level was 100, the operating limit 101, and the purchase occurs at 105 without recalculating risk, the process changed during execution.
Reducing size, waiting for another setup, or skipping the trade are possible responses after a move has left the planned area. The journal should record the decision, not only the outcome.
Limit
A late entry is not always price chasing. A momentum strategy may require a breakout already in progress. It becomes chasing when price, trigger, or risk rules are broken; movement alone does not prove FOMO.
Sources
- CME Group, Trading Strategies in Your Trade Plan — distinguishes setups, trigger points, and exact entry criteria.
- FINRA, What Is Market Timing? — frames the difficulty and risks of trying to capture short-term moves.
- FINRA, Volatility — connects rapid fluctuations, risk, and impulsive decisions.