Holding overnight positions

[brownsfan019 17]

Outside of the risks associated with holding overnight and margins, is there anyone here who does/has hold overnight positions simply b/c there's no reason to exit your trade at 4:15pm EST?

 

What I mean is - outside of the 4:15pm 'deadline' for trades remaining as daytrades vs. overnight trades - has anyone held a position overnight b/c there was no systematic reason to exit?

 

Reason I ask is that with the VBC's, the charts are very clean and while it can take HOURS to print a candle, that's ok if the trade remains in your direction. As a matter of fact, I think we've seen bigger moves occurring during the overnight session some days vs. what we get during the day. The VBC quickly and easily cleans up the charts (I'll post an example or two later) and if I just looked at my charts there would be no reason to exit ignoring the time scale.

 

Just wondering if anyone has held a position into overnight and how you managed it b/c the 4:15pm deadline was not enough to force you out of a trade. I've mainly viewed the 4:15pm deadline as just that - a deadline to exit your trades, regardless if you would normally exit or not outside of the time deadline.

[Reaver 10]

I have wondered this myself a few times....do day traders always exit no matter what at market close, or do they hold the position if there is a good reason to?

[brownsfan019 17]

Up to this point Reav, I've been one of the 'exit everything by 4:15pm'.

 

Thoughts are being considered to hold positions overnight if warranted however.

[Reaver 10]

Cool, on one hand I see why you'd do that, and then on the other hand I see why you'd consider holding longer...

 

I'm anxious to see how this thread turns out!

[OcoMoc 10]

If I have a huge profit and I expect follow through the next day then I may hold a position overnight but I will not sleep much. Rule number 3 (or so) is to never let a winning trade turn into a loser. There is nothing worse than waking up to a huge adverse price move and having to race to your desk to get out.

 

During normal hours you can expect normal things. When you hold overnight anything can and will happen. Position trading is one thing, but if you are trying to turn a day trade into a position trade then you are asking for trouble.

[MrPaul 10]

I have never held an overnight position in an index future. Stocks are just fine, grains are just fine, perhaps even Gold. But for me, holding my normal day trading size overnight is just too much for my risk appetite.

 

I do know traders who will hold overnight expecting a gap continuation in their favor but they are miles more capitalized than I am.

 

 

[notouch 10]

I frequently hold overnight positions. I agree with Dalton when he says you're putting yourself at an immediate disadvantage if you must exit the trade at the end of each day. There are some circumstances where it is so highly probable that a continuation will occur in the overnight session that you're just throwing away money if you don't leave the position open. I would regard today as one such day where if you have a short position open and you decide to close it for no other reason than that it happens to be 1615 then you're just throwing away profits.

[Trvlwanderer 10]

Personally, my journal contains at least half a dozen highlighted entries for overnight day trades. A couple turned out ok and gave me a mental comfort level. More than half ended up massive losses because of overnight downgrades or bad news. I allowed that to happen because of previous successes and an "it will turn around soon". That was a big lesson learned long ago.

 

To me, it's not worth the risk or lost sleep so everything closed by EOD.

[notouch 10]

If you're talking about equities then yes holding a day trade overnight is a bad idea because of gaps. For 24 hour futures markets you can leave your stops in place to protect your profits.

[BlowFish 10]

Only by mistake! Once not that long ago it was a weekend hold in the Russel. You go through phases of the strong moves happening in the European AM. Why not trade something that's got an out of hours session?

[brownsfan019 17]

Why not trade something that's got an out of hours session?

 

Since futures trade round the clock, it does make holding positions overnight easier, but I prefer to get a little sleep now and again.

[smwinc 20]

I do yes, but I think my situation is slightly different because of my timezone. I'm in Australia, so I can monitor the trade throughout my day (US session night). This helps with the emotional side of things.

[notouch 10]

If you're going to actively trade during the Australian and Asian sessions why not trade Australian and Asian stock index futures?

[The Bear 10]

If you're talking about equities then yes holding a day trade overnight is a bad idea because of gaps. For 24 hour futures markets you can leave your stops in place to protect your profits.

 

Or your stop could get blown away from a big gap in these 24 hr futures markets if it was set too close to the market. It depends on the market, some gap more than others...even if they are '24 hr' markets, there is a short period when they close then open again. Between this short period of time, gaps do occur in alot of markets.

[erierambler 10]

Just wondering if anyone has held a position into overnight and how you managed it b/c the 4:15pm deadline was not enough to force you out of a trade. I've mainly viewed the 4:15pm deadline as just that - a deadline to exit your trades, regardless if you would normally exit or not outside of the time deadline.

 

Some people have two accounts, one for short term and one long term. Naturally the long term would hold overnite and would be a swing trade. I have no reservation holding overnight.

erie