I would only do this when I am short, not when long. Very slim chance of catastrophe on the upside whereas the light nighttime volme may take my stop out when I really want to stay short for the next day. Good question--Thanks!
Re: Leaving position open overnight. I'm still not sure thats a good strategy. Some trades tend to take away all the profits even if your view is rock solid. Surprising to see you leaving position unattended overnight. When I'm booking 5-6 points profits .. i'd not leave any position open to a risk of 10 + and much more... mishwar
The issue isn't leaving a position open overnight. However, if we knew what his specific method was than we can determine if overnight holds are part of that trading plan. Besides, in my opinion it was a high probability move on his part especially in current market conditions (bearish since late February) where there's more risk in holding a Long position ovenight in comparison to short positions. Simply, too many bearish price actions in comparison to bullish price actions since late February. I also see Buy1Sell2 managing his risk exposure via position size management via changing their position size from one trade to the next due to the fact that the current price action is different than the prior price action. Only traders I know that do that are well aware of the strengths and weakness of their method. Thus, I thought his overnight hold as a short position was a good trade decision. Yet, the decision not to use a stop is tough to determine the merits of such because we don't know the specifics of the trading plan. However, I don't recommend not using stops unless the position size is so small that even if ES moved 20-50 points against you in the overnight trading session its still doesn't violate your money management scheme... Once again, position size management is key here. Last of all, I find this journal very interesting because he's a long term position trader trying his hand at short term trades. I suspect he's probably more at ease or more experience with these types of trades (overnight holds) via understanding the overnight trading session in comparison to day trading ES. Mark (a.k.a. NihabaAshi) Japanese Candlestick term
When I attended a seminar at a spread betting firm in London 5 years ago, I recall a broker mentioning a story of a client being long on DJIA and going away on a vacation. He got a margin call while being away. He was down somewhere in the region of $500,000. Just proves that things can go wrong if we are not there to keep an eye. I assume that guy could swallow such a loss, though $500,000 is $500,000. There is a great saying: Assumption is a mother of all F... UPS. Assuming/believing that during the night session ES is not going to climb is a definite risk I couldn't tolerate.
This indeed is the case in all 3 instances . Successful trading is about not overleveraging one's portfolio . As far as the plan goes , it can not be automated, rather it is my view of the combination of BB, MACD, RSI, Price and I think somewhat--pivot points. I am looking at the chart for an artist's rendering of a good setup. Sometimes the artist is Rembrandt or Van Gogh, but then sometimes it is William Gaines.
I personally know 2 persons who lost each over 10 million$ ( yes ten million dollars). One in futures S&P, and the other one in Forex. The one in the S&P sold 210 contracts at 250$ a point at 495 in 1995. In 1994 he made more than 1 million profit. When things went wrong he waited till the market retraced. But in 1995 it didn't retrace anymore at all. After lots of margin calls his account got wiped out completely.