I think one of the things that served Jim Cramer very well while he was a hedge fund manager was his mental flexibility. He could blog at 8:00AM how he loved VZ, but by the next day he could talk about how it was a piece of garbage.  Many people thought he was crazy for changing his mind so quickly on different names.  But as a trader he knew that if he was too rigid in his thinking that he would get crushed by the market.  As traders if something changes then we must adjust the trade.

The market until recently had been a fairly steady uptrend.  Many of the younger traders we trained had solid months in February and were looking forward to building on their success in March.  But a couple of speed bumps have cropped up in the past few days requiring adjustments if they hope to perform at a higher level for March.  The volatility in the market as a whole has expanded.  What adjustments as an intraday trader will you make because of this change?

If you are mainly focused on Stocks In Play then your adjustments will most likely be minor in nature.  You will still try to identify the most important inflection points and develop trading plays based off of those levels.  But what if you are more focused on purely technical plays?  Stocks that are breaking above/below recent support/ressitance or are trending strongly intraday.  Perhaps you will hold these stocks for larger moves?  Also, with the increased volatility perhaps you need to be mindful of larger shakeouts and should wait longer to build into a position?

Three of the past four days we saw what is referred to in market structure as “trend days”.  This is very unusual.  If you look back over the past six months there were only a handful of such days.  I have found in the five years since SMB began that most young traders severely underperform on trend days, especially if the trend is up.  I should point out that although Friday was a downtrend day in the final 30 minutes a massive buy program came in and erased a good portion of the market’s down move.  Perhaps many are still fearful of being short going into the weekend because of “takeover Monday”?

My advice to the younger traders on our desk is to continue to focus on the names with fresh news that show good volume premarket.  To not be rigid with your initial bias in such names.  To make sure you pay CLOSE attention to the SMB Radar after the Open.  And to maintain your patience on both entries and exits.  In a more volatile market stocks will get to the prices you want more often.  Be the liquidity provider at those prices not at some silly level in between.