And there lies the problem with overnight trades. Not only is your leverage reduced, but you have to consider the additional cost of buying insurance which cuts more into your profit potential.
GAPS happen all the time. RAMPS happen too often b/w 2:00am and 8:00am ET. Just when your sleeping.. V shape ramps! and all too often on wrong side of the leg! THEY know when you are sleeping!
The lower time frames are all about timing. Markets are ultra-good in the absence of news at staying essentially risk-neutral efficient. Since a curved surface can be approximated in the limit (over short time frames) as a Euclidean surface, models here can be linear and therefore accurate. The higher time frames may not be so efficient, on the other hand the quantitative models there are sparse and not well understood. And to make matters worse, the curvature of the surface can no longer be approximated with linear methods, and therefore exponentially more complex. "Go west young man" is definitely the higher time frames. But you are basically mining for gold with a shovel. FWIW
Thank you...Professor Nitro...this is why I like the lower time frames. I bet your're one of those people that never sleeps...too many textbooks to read.
%% Tricky year for YHOO[JNPR also- it hit $244/+LOL]; JAN,1999 UP huge %%. after your downtrends- it rockets up to DEC,1999 then a QQQ bear for 2000, 2001, 2002.OCT 2002 again is a bear killer- 4th quarter strong seasonals....