Since then I've been working away at my intraday trading and this week I began limiting it to the period from the open until lunchtime so that I'm out of all intraday positions by about 12.30 to 1pm if at all possible. This has been working quite well in some respects. It's only a short period and I've already noticed that I'm more patient with my overnight trading positions because I'm not trying to will something to happen, but this week has been unprofitable with respect to the intraday stuff.
My initial approach, which worked reasonably well, was to look for clear breaks, keep wide stops and run the positions for as long as possible. However, this then required me to trade the 5 minute time frame all day which was counterproductive elsewhere and also got quite intense as you need to concentrate closely for a long period.
This week I'd been trying to modify this approach for the shorter time period and found, unsurprisingly really, that the days when you can stay long or short all day pay for a lot of choppy losses so that when you reduce the holding period the returns reduce. It has also been a choppy, tight ranging week.
Every evening I've been going over my day trades and diarising where they went right or wrong as well as what I could have done differently.
One thing I've noticed is that on this scale it's possible that reversal trades are more effective than trend breaks. Again, this is not me reinventing the wheel, floor traders have done this for decades ie fading momentum.
Bhp is a case in point this morning. There was a choppy opening and then the stock started started to rise and pushed through the opening high and the previous close. I considered buying since there'd been a small pause before the range break and I thought that could act as support. In the end, I left the trade alone because the set up was too loose and the only sensible support was going to be 20 cents away at 4280. Shortly after this the move peaked and congested for a few bars. I seriously considered going short at this point as I would have a tight stop (just above the top of the range) but chose to observe this sort of trade. It turned out well and it would have been a fairly simple short for a quick 20 cent down move to support where there was another congestion. My costs for the round trip are about 3 cents a share which was another reason I didn't take the trade, I thought it quite possible that if the pullback eventuated, it might stop around 4290 or 4295 and this would be too marginal.
It's not a bad example though and I've seen plenty of these patterns where the range is wider and you could more easily take the trade as the upside is better.
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