Trade Review on LF - Does the outcome determine whether it was the right trade?

Going into last week, one of the stocks at the top of my watchlist was LeapFrog (LF). I was particularly drawn to the weekly chart, which showed a 6-week base preceded by a strong uptrend that repeatedly found support at the 10-week moving average (in red). I liked the volume patterns, specifically how the stock had advanced on very heavy volume (see the two consecutive weeks in early February, as well as the last week of April), and pulled back on much lighter volume. See the weekly chart of LF (as of last weekend) below:

I identified the buy point as being above 10.60, which was the high from the week of 5/29 and was also a level where the stock found resistance over the prior three weeks. If buyers could push price above that level on good volume, it would validate to me that the stock was done consolidating and ready to resume its uptrend.

On Thursday morning, I got an e-mail with an alert saying LF had crossed above my 10.60 trigger. I pulled up the chart and noticed volume was coming in at a strong pace, which I viewed as confirmation of the move. I went long LF...only to get stopped out later that afternoon as the stock fell a few percent below the buy point. See the daily chart below:

Clearly, something was wrong, right? I lost money on the trade, and my whole intention of buying the stock was to try and grow my account. Therefore, something I did must have been wrong, since the trade ended up shrinking my account, right?

I would disagree with the two questions I posed above. Yes, the trade lost money. But when I reflect on it, I view my decisions and reactions as being proper. I bought the stock as it was clearing a multi-week base on great volume. I cut the loss quickly so that it damaged my account by less than .7%. Given the same setup and same scenario again, I wouldn't hesitate to buy the stock. In LF's case, maybe the trade failed because the market wasn't ready to support breakouts. But the setup was right.

In most activities, we judge whether a decision was correct or incorrect based on the outcome those decisions produce. If you choose to drive a car without a seat belt, and you get to your destination without an accident, then your decision to not wear a seat belt was correct since you avoided the hassle and discomfort of a seat belt. Of course, just because you got there in one piece, it doesn't mean it's the smart thing to do. A better way to analyze these situations would be as follows: if I were to play this scenario out a million times, is my decision still justified? In the seat belt example, clearly not - just one accident could be fatal. As it relates to LF, I'll continue to take similar setups in the future because, over time, these chart patterns have a strong probability of leading to outsized gains, especially when losses on losing trades are cut short.