Profits and Perils of the Overnight Session

Discussion in 'Strategy Development' started by aeliodon, Oct 2, 2007.

  1. Right now I don't do overnights - but sometimes I think that's really silly because when you have a position on the right side of a super strong trending market it seems silly to sell it out of an irrational fear of holding overnight. The overnight session itself can often produce moves to extreme levels as market overreacts to news after market close or to what Asian markets are doing and the lack of liquidity can produce some extreme moves.


    Profits:

    + Can enter positions at overnight overeaction extreme levels.
    + Can exit profitable positions at overnight extreme levels.


    Perils:
    - Can get stopped overnight extreme levels can easily stop you out of your positions if you use GTC stop orders.
    - The extreme levels hit in the overnight session can scare you out of a good position.


    I think a GTC stop market order stopping you out of an otherwise good position is the worst thing - but then it can work in your favor as well if you take profits at those extreme levels.
     
  2. you right.I tested my sistem with close the position when the market close. It"s has shown a bad result. You don"t cut your profit from their own awe.
     
  3. there is interesting question. what the largest breakup was on DJ?