Favorite Links

Friday, September 13, 2019

Andrea Unger - Intraday or overnight?

Hi guys, hi from Andrea Unger.

Intraday or overnight?

Well many traders claim that intraday trading is better because you can go to sleep with no problems, you don’t have any fear of what your open positions would look like in the morning after if they are still in place.
Intraday trading: the psychological aspect

Actually there are two different points of view, one is depending on psychology, it’s subjective, there are traders who are not capable of keeping open positions because they really have a bad feeling, they are afraid of keeping these positions opened during the night and in this case they are compelled, if they want to trade, to find an intraday model to follow.
Intraday trading: the objective aspect

Objective means, it depends on the market.

There are markets which are not the right place to be to trade intraday.

All those markets with a limited dollar move during the day are not good enough, because in the average results you will have, you are not covering your operational costs, which are commissions and slippage.

Just an example, back to the psychological.

Another problem is that many people try to face the two horizons with the same model, with the same approach.

So they build strategies for intraday based on the same approach they would do on a longer-term, which is not necessarily wrong, but sometimes it does not deliver the right result.
Intraday or overnight: what does Larry Williams think about it?

One of the best traders in the world, Larry Williams, is not a fan of intraday trading.

He claims that profits are made overnight and he made a lot of profits.

The point is, I saw some of his strategies, that might not represent an important model on what he does, but the material I saw was based on an approach with some indicators as some specific properties in some moments of the day, which were very similar to a long-term horizon approach and in intraday they were not as effective as they were on longer term.

Obviously, that was disappointing and led him and everybody who was following the same approach to thinking that overnight was better.

Now the point is, I’m a fan of diversification, so I prefer to have every kind of strategy.

I have fortunately no problems in going to sleep with opened positions, I’m not happy if I lose of course but I can sleep, and so I try to put everything together.

I try to put together for every single strategy or model what works for that specific model.
Intraday trading: when to choose it

If you are really not capable of going to sleep with opened positions, you are obviously compelled to choose an intraday approach, in this case, you have to choose the right markets.

Let’s take the most important market, the miniS&P500.

This is not a good market for intraday strategies, because on average, it does not offer the proper moves to make money intraday, on average, generally speaking.

Now you might claim here in the comments that you have the best intraday strategy of the world on miniS&P500, it’s fine, I’m happy for you, but I’m talking about general people, common mortals as me.

In this case, I don’t suggest that market to focus on if you want to trade intraday.

There are markets offering a wider dollar range as Crude Oil futures, gold futures, gasoline, all these markets offer a higher level of opportunities to find a proper intraday approach and they are obviously there to lead to some more satisfactory results.

If you choose intraday instead of the reason of being afraid of going to bed with opened positions, just because you want to take home quick profits, then, in my opinion, you are doing the wrong choice.

If you look for a hit and run and fast and furious approach to take the money and run, I fear that you are one of those who might cut profits and let the losses run, which is obviously a disaster for every trader.

In that case, there is a wrong mindset to the choice of the time horizon of your trades, in this case, I would say that intraday is the wrong choice because you are facing the matter from the wrong point of view.

As said, if the problem is keeping positions opened, then what are you looking for?

You are looking for intraday trades, moments of the day where the market is moving in a certain direction, because, again, if you look for ping pong, you are probably looking for a hit and run, take the money and run, all these things which lead you to the wrong mindset, this is my personal opinion.
Intraday trading: some markets and setups

So markets which move?

Fine, perfect!

I mentioned some of them, but as they move, as they are volatile, they also require your position to breath and to do so you need a proper stop-loss, not a very tight stop loss.

Needing a proper stop-loss, you are exposed to a higher risk, because when you lose, and you will lose, of course, everybody loses, you take a heavy loss, you must be ready for that loss.

On Crude oil, in intraday, I suggest $1500 as a stop loss, 1,5 point, the same level more or less on gold future.

On Dax future 1500 euro might not be enough, I think that you have to go a bit more as €1750, even €2000 are a more proper stop-loss for the Dax in intraday.

You could try the miniDax, which is fine also in terms of volume, mini Crude Oil is not the best choice, but it’s there, on Gold the microGold is better than miniGold in terms of volumes, just to find some alternatives to those markets.

You must be ready for that, you must know that you have to face these issues, aware of what you are going to do, this is important.
Intraday or overnight: my personal opinion

So there is not a better choice between intraday or overnight, it depends what your mindset is, your job Psychologie and you must know what you are facing when you face it, that means you have to be ready to justify your choices.

The ForEx might be a choice because you can scale down as small as you need, but sincerely speaking, I have a feeling that in the last years, most of the Forex pairs don’t show enough volatility to allow a decent intraday trading.

This means that to discover the very best trades you need extra skills, extra luck, and it might be very difficult to find something that works properly.

That’s why for intraday unfortunately I believe that a wider level of stop-loss is still the thing that you need, which you would not like, but it has to be there.

It’s up to you, it’s not good or bad.

Is it good for you?

Bad for you?

Be ready to make the right choice depending on all the consequences that this choice is leading to.

That’s it guys, see you next week, ciao from Andrea Unger.

No comments:

Post a Comment