Novice approaching DAX and S&P500 micro futures

June 23rd, 2023, 01:05 AM

Nihilist

I have another question, maybe someone can help me: how "dangerous" it is to keep a position open overnight / over the weekend, even with a stop loss? Is there a way / good practise to manage / prepare them?

I mean, I would be interested in swing trading too... but I always have the fear that the stop loss may not protect me.

Have a nice weekend!

Hi @Nihilist,

The most risk you can incur is holding over the weekend. I have seen over the course of 20+ years trading massive gaps down from Friday close to Sunday open. Some of which would wipe out trading trading accounts.

If you have a smaller account a suggestive approach would be to sell on Friday before close and re-open on Sunday night. This would avoid the weekend news events which could cause a massive drop. For the most part the market opens close to where it closed on Fridays. You�re going to miss the occasional jump but more importantly you�re going to miss the massive drops.

Robert

June 24th, 2023, 12:39 PM

Just piling on to the stay away on weekends.

Governments and Corporations prefer to sort of push bad news under the radar and late on Friday after the reporters are gone. If something big happens, like what may be going down in Russia this weekend, it is the Asian desks for the big banks that are trying to figure it out. Well Goldman etc don't have their major brain trust working in Hong Kong, or in New York on Sunday night, you know the decision makers are in the Hamptons. Typically big emotional reaction to the news then later on Monday after morning meeting the big boys wade in.

If you trade futures there is no tax penalty for getting out and getting back in. You need good sleep over the weekend. Trading is a mind game, you need the weekend without the subconscious stress of holding a position when you are powerless to do anything about it.

Those who run money for others use a lot of hedges. Just look at the size of JP Morgan's quarterly S&P collar. Small time futures traders don't need collars, they just get out.

Good Luck!

June 25th, 2023, 05:29 AM

Another reason to be careful holding overnight, remember Chinese and Aussie data comes out around 2.30am (UK time).
Eurex opens at 7.00am, sometimes directional, sometimes not so. London and other stock markets open at 8.00 UK time, with good volume which decays over the next couple of hours.
Dax... like oil or gold but on steriods... be very wary unless you are used to it. Very thin... Much better volumes and movement in the FESX and FGBL if you want to trade in Euro hours. I actually trade ES for the pre/post London Cash Open. I'm used to it, the liquidity, the moves. You'll not get the 50pt swings as in RTH, but it suits me...

Novice approaching DAX and S&P500 micro futures

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Novice approaching DAX and S&P500 micro futures