Trading in US. All big moves happen overnight

Discussion in 'Trading' started by Rickshaw Man, Dec 2, 2011.

  1. Being flat at the end of the day excludes you from all the major moves. Small account size pretty much keeps you out due to the increased volitility. Just like Wednesday we will gap open the flatline all day.
  2. This is exactly what they want: keep all retail ball-breakers out of their pond.
  3. You’re comparing (I think) only the closing price of the prior day with the opening price of the current day, which forgets that both overnight and regular session also have a range that can be traded (in the case of say ES).
    But anyway, apart from the above, here are some facts for you (for SPY):
    Average difference between Open and Close during regular trading session since 2011/01/01: $0.91
    Average difference between prior day Close and next day Open (the overnight equivalent to the above stat): $0.78
    So, in the way (I think) you are defining it (i.e. ignoring range), there has actually been more movement during the day.
  4. easy solution. hold overnight.
  5. Markets are much slower overnight, what are you talking about? You even have to change strategies when trading ES outside RTH, it's that different and slower. Have a look at some 24hour charts of ES and compare the moves in RTH vs outside. It's just that more time passes and both Asia and Europe can have their say, but it's still nowhere near to what open hours (US) do. I've had a bunch of statistics and studies that quantified it too, but i'm not sure where they are among my millions of files and charts. I can't imagine what would prevent you from trading the full 24 hours if you really wanted to, GLOBEX is right over there...
  6. The average number is pretty meaningless - it's the distribution that matters.

    If you have to do averages, the (somewhat) better comparison is average gain/loss buying MOO and selling MOC versus buying MOC and selling MOO.

    An obvious (and possibly more telling) variation would involve options.
  7. GordonTheGekko

    GordonTheGekko Guest

    Except there is huge uncertainty many times overnight...

    All of the IRA's are out there to rip faces off. And those BAC Branch salesmen who call themselves money managers working 2148 miles away from Wall Street...
  8. Mvector


    Firms can move price with less resistance in the book at night - as they try and clean up market and their funds to make end of year bonuses.
  9. Even better - open a futures account and let your algo watch ES 23.5 / 6
  10. I trade ES intraday and, except for very occasional options trades in oil and the euro, only ES. For a long time I felt that the big overnight gaps meant I was missing opportunities. Over time I came to realize that frequently those gaps create lucrative opening hour opportunities -- RTH works just fine.

    As I continue to learn this incredible game I realize that there are many pieces of the market that are not naturally mine but I can use what those moving parts produce to help me snare what is in my wheelhouse. If you can learn to do almost anything really well in a highly leveraged game -- including use only some of the leverage available to you -- the payoffs are huge.

    But it has to be done very well. Playing the hands pretty well is, at best, a break even proposition and more likely a losing proposition.
    #10     Dec 3, 2011