Adithya M.R. writes:
Just curious to know your line of thought this morning when you said we should stay on the long side (for intraday) . The 5500 resistance I thought was a very strong line because thats around the point where the neckline of the H&S broke. Further, 5500 is also the point where the resistance came in - i.e. support became resistance in a way. Of course we know the intermediate trend is down. Why would your bias for the day be long (regardless of what actually happens)?
I try to develop a trading direction for each day, before the market opens. Adithya has attended our day trading seminar so he knows the components that go into developing this direction. His question is: why did you have a long bias for the day?
While I did observe the 5500 resistance, I am more influenced by momentum. The short term momentum appeared to be positive, so my bias for the day was bullish. I did point out that corrections are difficult to trade (they are!), there is no need to take a long position (I did not!) and we should buy September PUT options around 5500 because we are selling into strength (I added to my PUTs).
Day Trading is not the simplest of professions. Our focus should be on (a) having a method (b) being consistent (c) keeping losses small. We should not be concerned about being right or wrong.