Stocks to futures, long timeframes to short

‘Most trading is difficult,’ says Coenraad, ‘ but intraday is excessively so for most.’

Before he discovered Wyckoff VSA, Coenraad traded E-mini futures. He then moved to stocks to learn the methodology, before returning to futures. He spent 2 months paper trading 5 days a week to become consistent, adjusting to the faster moving timescales with intraday trading. Attracted to the E-mini because it is the highest traded market in the world, he started with the Micro E-mini and then switched back to the E-mini once he was happy with his performance.

End of day is part time, intraday is full time

‘End of day trading is not as time intensive as intraday trading for sure,’ says Coenraad. ‘Depending on your eod trategy strategy, you probably analyze the markets over the weekend putting in 5 or 6 hours into deciding your trades and your positions. You put your trades in on say Monday or Tuesday, and then let them run the whole week or longer. You’ll log in once a day to monitor them.’

This means you’re maybe clocking up 4 hours Monday-Friday. With intraday trading you’ll be looking at the screen for 6 or 7 hours a go, and when you are running a trade ‘you are fully focused on taking that trade’, says Coenraad.

‘If you don’t have time to learn and execute intraday trading, then work towards learning end of day and end of week trading first, using the VSA indicator service to select trades on larger timeframes.’

Once you’ve learnt your craft, it doesn’t have to be either/or as many traders take longer positions and mix end of day or end of week with their intraday trading in between. But Coenraad reports that learning intraday trading will improve your selection of entries or exits on larger timeframes where there is more time to make decisions because you’ll have got really good at making quicker decisions.

Trade execution on faster timeframes

Moving to intraday pummels the brain initially as it’s about making the right decisions quickly. ‘The market moves a lot faster than with end of day trading. It’s pretty emotional,’ says Coenraad.

So he developed a framework to help him enter and exit trades based on probability not emotion -  one of his key tips for intraday trading. He looks at what he calls the apples and strawberries on the chart before he decides what to do.

For example, in this chart, the bright red dotted lines are strawberries or short positions (the market is short on all timeframes above this) and the bright green arrow or apple is in between a bunch of strawberries so it is a lower probability trade. 

If there are four timeframes aligned to the upside, it’s green (or apples) and they are longs. If there are four timeframes aligned to the downside it’s red (or strawberries) and it is shorts.

This spreadsheet shows the apples (green cells) and strawberries (red cells), the apples being in a strawberry market. It shows Coenraad’s positions when trading the MES (Micro E-mini), and the probability of the trades taken based on the multiple timeframes.

Make the software work for you so you can listen to the market

Coenraad uses a combination of Smart Center Pro, VSA Lite and his own ‘OXO’ technical analysis overlay. Smart Center Pro identifies the key VSA signals like Signs of Strength and Signs of Weakness, VSA Lite identifies the automatic trigger bars and shows if demand and supply is out of balance. His OXO overlay is a technical analysis tool distilling his previous strategies bearing in mind his trading style and risk appetite.

He also uses the audible alerts, for example when the market is doing nothing, so he can take a break from being at his screen, stretch his legs and rest his eyes but still pick up profits trading the lower timeframes.

As ‘I do not trade with a target in mind when placing the trade on, the entry is important for me,’ says Coenraad. ‘It’s not always clear where to enter and exit.’

‘The OXO also helps me to stay the right length of time in the trade. When the market moves against the traded direction and the VSA indicators confirm I should close the trade out and might consider going to the opposite side. This would depend on the market activity and volume profile based on VSA principles and knowing it`s a lower probability trade than in the overall traded direction.’

‘It all depends on how the market is forming. I don`t ask why a market does what it does, rather I let the market tell me what position to take.’

A final piece of advice

In the process of transitioning from end of day trading to intraday, Coenraad came to the following realization: ‘The secret is to understand you are just doing business with the market. You’re going to win some and lose some,’ he says.

‘Some traders can’t stand a losing trade. While they are beating themselves up over it they will miss the largest move of the day in the opposite direction. You have to be flexible and let the market tell you what to do.’

‘A lot of traders struggle with this. They anticipate what the market is doing instead of listening to what it is telling them,’ explains Coenraad. `When you try to take a trade before the direction is confirmed` (where Coenraad would be looking for his 4 apples or strawberries) `you will end up losing to the market. You are out of sync,` he says.

‘When you’re in tune, everything slows down, you make great trading decisions and enter and exit the market at the right time,’ says Coenraad. He thinks being and staying in tune with the market is the most difficult part of trading, adding that we all get out of sync from time to time but it’s about realizing it as soon as possible and returning to listening mode.

All the more important when you`re making decisions as quickly as is required with intraday or real-time trading.

Sources

Five Differences Between Intra Day and End of Day Trading Strategies (quantshare.com)