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<\/p>\n","protected":false},"excerpt":{"rendered":"As an intraday trader I need to make many adjustments during each trading session.\u00a0 I have to determine if a stock is a short, a long, or a no trade.\u00a0 I may also make adjustments in how I am entering and exiting my position.\u00a0 If I don’t keep an open mind it is impossible to make the adjustments necessary to be consistently profitable.<\/p>\n
I was trading RHT and AIG when the market opened today.\u00a0 AIG had a very powerful opening drive above 49.\u00a0 I decided to buy on a pullback as I thought the opening drive was the beginning of a multi point up move.\u00a0 I bought some stock at 48.50 and some more in front of 48.\u00a0 I got flat when the 48 bid dropped. Rip!<\/p>\n
I then had to make a decision whether to continue trading AIG.\u00a0 And if I should be short or long.\u00a0 This was not easy to figure out during the next ten minutes as AIG was bouncnig around between 47.65 and 48.20.\u00a0 One time it dropped the 47.65 bid but the small down move to 47.40 was quickly followed by an up move to 48.\u00a0 It wasn’t until I saw aggressive buying at the 48 level but the offer not lifting that I was convinced to maintain a short bias.\u00a0 I maintained a short position for the next two points.<\/p>\n
The second type of adjustment that I needed to make related to how I was entering and exiting my position in AIG.\u00a0 After the initial rip I took I began selling into weakness and buying into strength.\u00a0 As you look at the intraday chart of AIG below you can see that following many of its down moves it would pop 30 to 50 cents.\u00a0 And then begin a new down leg.\u00a0 This pattern continued to repeat itself from 48 all the way down to the 45.50 area.\u00a0 It made no sense to short AIG into weakness.\u00a0 I had to offer into the short term strength.\u00a0 I also had to cover some of my position into each down move.<\/p>\n
Both of these adjustments allowed me to turn a negative Open into a very positive day.\u00a0 As I was turning my day around in this stock one of the better traders on our desk was cursing how poorly AIG was behaving and that he couldn’t make any money.\u00a0 This trader had the correct bias in the stock but was struggling with his entries and exits.\u00a0 He was continuing to enter short trades into the weakness and was covering into the strength.\u00a0 He finally gave up.\u00a0 This is a trader who is probably in the top10% of professional day traders.\u00a0 His talent and correct bias were not enough for him to conquer AIG today.\u00a0 He needed to make additional adjustments to account for its intraday trading pattern.\u00a0 If he adjusted his entries and exits he would have conquered AIG as well.<\/p>\n
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