Day trading is only as hard as you make it. Keep it simple.
$MSFT, fueled by AI news, rips from the open near $500 to highs around $517–518, tagging the same level it has rejected for roughly 46 days. With an ATR of about $11.50, that’s nearly a $20 move from the open, or close to a 2ATR extension in the first 25–30 minutes.
Given the magnitude of the move, I flagged a potential short scalp for a mean-reversion pullback toward VWAP. As
@TheOneLanceB says, wait for the right side of the V. Either take the 5-minute bar-low breakdown with risk above HOD, or do what I did: grab a "small" position on the front side, trim to stop shitting yourself, and keep the core size for the actual move back to VWAP.
Yes, catching the long from $500 to $517 would have been more profitable. But as day traders, our attention often gets pulled to a handful of names, and we sometimes miss the biggest movers. The advantage is that when a stock like
$MSFT sets up for mean reversion, we can still extract value from a name we weren’t originally in.
Keep in mind that mean reversion isn’t easy. It’s tougher than simply joining the trend. As Lance puts it, it often means hating yourself and sitting through pain. But these setups tend to be among the highest EV trades. When executed well, they help stack the PnL curve up and to the right.