Short term trading is all about momenum. The trader has limited time at his disposal. He requires an almost immediate move in his favor. Since this will not happen all the time, trades are protected with stop losses. Also, trades are entered in the direction of momentum. Either it works quickly or you get out.
For most of last week, the direction was down. On Friday, a sense of at least a short term low has come about. The Nifty is now much healthier having seen a 400 point correction - almost 50% of the rally. Then, buying should be considered if momentum is favorable. "Favorable' momentum can be defined in many ways.
1. Prices move above the initial intra day range set up in the first half hour. If there is a big gap open, then this idea may not be valid.
2. A big gap open sets the tone for the day's direction. Trade entry is done after a period of consolidation or on a dip.
3. During the course of the day, momentum indicators like the RSI or Stochastics reach the lower support levels, giving an opportunity for low risk buying. While this happens, prices maintain some strength, remain above the open, or the previous day's close.
This is not all. You can work out a number of ideas which will define strength / intra day dips in an envionment of strength.
Trading with momentum enables the trader to ride these short term waves. As usual, the waves may be false, hence all trades should be protected with stops.