Day Trading with a View

I take day trades on most trading days. Every day, I approach the Markets with a view on the trend. This means, before the Market opens, I usually decide on the direction in which I wish to trade. Till Monday (yesterday, April 6) I was taking only long positions, since the short term trend was up and momentum was strongly on side of the bulls. If my intra day charts suggested weakness, then I closed my long positions and stepped aside. Tomorrow, Wednesday, I may have a bearish view, assuming the US markets close weak, and, Asia is weak. My bearish view is supported by Nifty charts where Monday made a long upper shadow, a potentially bearish pattern when it comes after a long up move.

When the trader has a clear view, trading becomes easy. If the view is bullish, you know you should be taking breakouts / buying on dips. On a bearish view, you can sell on rallies or on a breakdown. This allows you to trade in more than one instrument, since your focus is on only one side of the trade.

Your view does not assure a profitable day. Markets can and will go against you. If this happens, then your trades are likely to suffer losses. But, these losses will be controlled by proper money management. Also, there will be days when the markets will go in your direction. Even in choppy markets, by taking only one side, you may sometimes catch small but profitable moves.