Overnight or Intraday Trading?

by Andrea Unger

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Hi guys, hi from Andrea Unger! Sometimes, people ask me which is better between overnight and intraday trading. So, today I’ll explore this topic focusing on the main aspects of both approaches, as well as on the markets on which intraday systems work better.

The choice to trade intraday or overnight depends on several aspects that can be grouped in two main categories: psychological (subjective) and practical (objective).

Many traders claim that intraday trading is better because you can go to sleep without worrying about open positions. This is true for all those people who can’t stand keeping positions open during the night. They are worried and afraid of losing their profits. So, if they want to trade, these people are obviously compelled to work with intraday models.

As I said, choosing between intraday and overnight trading also involves more practical aspects. These mainly concern the markets we decide to trade. All those markets with a limited dollar move during the day are not good for this approach. On average, the results you get on them are not enough to cover operational costs (commissions and slippage).

Another problem is that many people tend to always use the same approach, whatever the duration of the position. For instance, they can build intraday strategies based on the same approach they use for longer-term operations. This isn’t necessarily wrong but, sometimes, it doesn’t produce the right result.

What Is Larry Williams' Opinion?

Let me show you an example. Larry Williams, one of the best traders in the world, is not a fan of intraday trading. He claims that profits are made overnight – and he made a lot of them. However, I saw some of his intraday strategies (they aren’t representative of what he does) and saw that they are based on an approach that is very similar to a long-term approach (he uses some indicators and specific properties of the markets that are there at certain times of the day). This approach, when used in intraday, may not be as effective as it is on a longer term.

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

As for me, I’m a big fan of diversification, so I prefer to have every kind of strategy in my portfolio. Fortunately, going to sleep with open positions causes me no problems. I’m not happy when I lose, of course, but I can sleep well all the same.

Intraday Trading: When To Choose It

If you really can’t go to sleep with open positions, you are obviously compelled to choose an intraday approach. So, you obviously need to trade the right markets.

Let’s take the most important market, the e-Mini S&P 500. This is not a good market for intraday strategies, because, on average, it does not offer moves that are wide enough to make money intraday. Now, you may have the best intraday strategy in the world on the e-Mini S&P 500; this is possible, however, generally speaking, it is difficult to trade this market intraday.

There are markets that, as they offer a wider dollar range, are certainly more suitable. I’m talking about the Crude Oil future, the Gold future and Gasoline. These markets offer more opportunities to find a proper intraday approach and, so, can obviously lead to some more satisfactory results.

If you choose intraday trading not because you are afraid of going to bed with open positions, but 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, fast-and-furious approach to take the money and run, I’m afraid you might be one of those guys who might cut profits and let the losses run, which is obviously a disaster for every trader. I think this is a wrong mindset that might cause problems to you.

Intraday trading: some markets and setups

If you want to work with intraday models, you need a market that moves in a certain way. Moreover, you need to keep in mind that, as they move and are volatile, they also require your position to breath. This means you need a proper stop-loss that is not too tight.

Using a large enough stop exposes you to a higher level of risk. Indeed, when you lose – and you will lose, because everybody does – you will take a heavy loss. So, you must be ready for that loss.

I suggest that you trade the Crude Oil and the Gold futures in intraday with a $1,500 stop loss (this is 1.5 points of the Crude Oil). On the Dax future €1,500 might not be enough. In this case, I suggest that you use at least a €1,750 stop (€2,000 would be a proper stop for the Dax in intraday).

If you want a less expensive alternative, you can try the MiniDax, which is fine also in terms of volume. On the contrary, the Mini Crude Oil is not the best choice. The MicroGold is better than the MiniGold in terms of volume.

Anyway, you must be ready and know that you have to face these issues. This is very important.

My Opinion

Actually, I don’t’ think one is better than the other. Everything depends on your mindset and psychology. In any case, you need to know what you are facing when you face it, which means you have to be ready to justify your choices.

The Forex might be a choice, as it allows you to scale down as much as you need. However, sincerely speaking, I have a feeling that, over the last few years, most of the Forex pairs haven’t been enough volatile to allow for good intraday trading.

This means that to find something that works properly you need extra skills and extra luck, as it is very difficult. This is the reason why I think that larger stops are necessary in intraday. You may not like it, but it has to be there.

To sum it up, choosing to trade intraday or overnight is up to you. It depends on your psychology and mindset. The most important thing is that you consider every aspect when you make your choice, being aware of all its consequences.

That’s it guys, see you next week!

Ciao from Andrea Unger!

Need More Help? Book Your FREE Strategy Session With Our Team Today!

We’ll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.


Andrea Unger

Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.

I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems. 

In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.

Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.

Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.