One of the things my buddy Jon Schrager and I have really been focusing on is the trend of the stock. Its pretty easy looking at both the daily chart of the SPYs and these 2 stocks, NFLX and FB that they are in an uptrend. Lets think about the psychology of this. Take FB for instance. There are 2 scenarios we have been discussing. The first- You are short over night, it gaps down and near support. What are you likely to do, probably take your gains. Second scenario-You missed the previous run. You see its back at the break out area, now you see an opportunity to get long the stock. Us day traders want to take advantage of this emotion of the market.
You might see a break of the previous days low and think its a short. No it is not. There is support under it and day 3 of pullback in a UP-TRENDING stock. So you need to have a bias of a long here.
My charts froze so I missed that pivot long but hit the pull back entry. Easy flag after it went green. Now I just sold into resistance. Since it continued to build over levels another entry presented itself on the pullback to the 20ema. Its all about the bigger picture.
Once it held the levels from previous day and flagged, I knew there was a high probability of it going. Took a long at 103.20 and sold at 103.17.
Focusing on the bigger picture and trend is what makes these plays trade-able and profitable. The morning, although can be wild and confusing, but once you have a plan stocks move clean and right to areas of resistance/support. I used to hate the morning because I didn't have a plan. Now I do and it seems easy to me. Just can't get too cocky or the market will humble me.
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