After hours emini trading

Bravo SOHO...very informative...I trade the SPY during the U.S trading day and have been considering the e-mini for overseas market trends and macro-economic events....will be watching...please share some more wisdom if you dont mind.

C.
 
I definitely see what Soho is talking about. On those rare times that I've been motiviated to wake up at 4AM to trade, I've been able to catch a few good swings. Another thing to consider is that it seems that if the e-minis & epremium rise too much (without news) then it will eventually drift back down to roughly where the S&P500 closed last.

Call it the "premium gap." If MB Trading had 24 hours trading, one could conceivably "fade" the gap.
 
Thanks for the kind words everyone. I try to follow some of the posts here a couple of times a week and this thread caught my eye. I have been working nights for almost 20 years. It is like a fireman's schedule as I only work 7 days out of 14. This gives me alot of time to trade when I am off. I am used to the night schedule and have lived and worked this way for so long I have forgotten what a real life is like. Yes, I do believe it is taxing, but some of you should be able to make it work. If I had to suggest two times it would be the hour after Globex re-opens and try for 2-3 points. Put a trade on and then enjoy the rest of your evening. Have your target and stoploss orders in, alarms set (with speaker vol up high so you will be notified anywhere in your house) and forget about it. I usually try to get out of this trade just before 11pm. The reason for this is Globex is closed from 11-12am. The second time would be 3:15 to 3:45am. Wake up to see if there is a play now that Europe is open.

Trader3 asked why not trade one of the Eurex products instead. I am starting the DAX and looking at the German bonds, but will always trade the ES. I study all the charts from the day and gather all the news from the US markets on a daily basis. I am more in tune with the ES having traded it both during the day and night. I feel I will have more success with the DAX by watching the events leading up to it's open- mainly the close of the US markets, the Nikkei open and the movement of the ES during Globex. I think both the ES and DAX are great on their own, but they compliment each other and both should be traded. (Much like the NQ and ES do during the day.)

PDcomm- I do find it less taxing on my nerves. I really enjoy the pace at night. Don't believe what everyone tells you that it is illiquid and not worth trading. There are 10 point moves all the time, I don't have slippage on my stops and you don't have all the ridiculous head fakes and jerky moves like during the day. I think trading at night came about as a change in my lifestyle. I used to trade during the day, every day, and I never saw my family and I was so tired and worn out. I worked nights and traded during the day- where's the time for the important things in life like my wife and son, my friends and family? My days are completely free and I really enjoy it. If I do trade during the day it is just an extension of my night trade. For example the night session has been trending down and usually between 6:30 and 8:00 it will pop up to a small higher low. This will be the high for the day and is my stop. I stay in the trade and just see what else I can get. Sometimes I have not been able to trade because of work, but when I get home I will put this play on and short this little pop.

Spreadem makes an excellent point about watching how the big stocks are trading afterhours. I always watch the NQ and YM (mini DOW) during the night. I use these for confirmation of the trend. I really like watching the YM after the market closes at 4pm for 45 minutes as the ES and NQ are closed but the YM is open for trading. This shows in a nutshell if the big stocks are moving up or down like Spreadem suggested. Now when the ES and NQ open I have a clue to direction.
 
Quote from JT47319:

I definitely see what Soho is talking about. On those rare times that I've been motiviated to wake up at 4AM to trade, I've been able to catch a few good swings. Another thing to consider is that it seems that if the e-minis & epremium rise too much (without news) then it will eventually drift back down to roughly where the S&P500 closed last.

Call it the "premium gap." If MB Trading had 24 hours trading, one could conceivably "fade" the gap.
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I forgot to respond to this in my last post. Great point JT...I have EPREM up during the day , but never looked at it during any other time. I will have to look at this- thanks for the tip!
 
I think this works if there is no news, as in there's no reason for the underlying S&P500 cash to gap up excessively. The spoos may influence the cash to gap up a little, but not to the extremes that I've sometimes (not always) seen them at night.

I think the typical e/premium is actually something like -0.75 (there's a website for this info) and I've seen it well into the positive territory at night. When it enters a reversal period (of which you are familiar with, I was actually trying to find info on this to see if there were reversal periods at night, thanks for the info!) then you see that the minis slowly revert back down.

This doesn't work on war news because you don't know what the hell the S&P is going to be at in the morning though you could try and "scalp" the "premium gap" and since we're in earnings season it may be hard to take advantage of this as well. Of course, scalping at night means about 4-hours of waiting :)
 
Quote from soho:

I only trade the ES at night (just started the DAX) and have been doing so since December. It was a slow process of learning what was going on at night and why. The one reason I switched from trading days to nights is because of the TRENDS. Catching a trend is where the money is made. Once I figured out how to trade this at night my consistency and profit went up.

Basically the night is divided into "two sessions" (as I call them):

First Session: When Globex re-opens at 4:45pm EST until 1am

Transition: 1am to 3am window between the two. (There is a 1-2 hour window between the two sessions that many times forms a tight channel as the first session transitions into the second.)

Second Session: When Europe opens at 3am and until 6:30 to 7:30am.

Generally, the first session has a 3-5 point range and the second session has twice the range. I'm trying to capture the big 8-12 point moves that consistently happen at night. For the first session I set up a channel after Globex re-opens and I'm looking for a break one way or the other. I get a feel for how the market closed, how the TICKS closed, afterhours news, or earnings on major companies and then make my play. The Nikkei opens at 7:45pm and gives the next clue towards direction. I also am watching the GC contract (gold) for my contra indicator and the US Dollar index. Usually there will be a small 3-4 point move during the first few hours, a sideways base as we transition into Europe and then a continuation of the trend or complete reversal.

The second session is where the points are made, but you have to be up in the middle of the night. So, to combat this I use many alarms at pivot points and use stops for getting me into and out of trades. Again, I set up a channel (the prior two hour transition period) and place my buy and sell stops. I am always up when Europe opens and for small time periods at other times of the night. I set my watch alarm, get up and look for 5-30 minutes and then go back to sleep. I do not sit and watch the screen like I did during the day. It is very SLOW at night and you have to have patience! It might take 1-2 hours to grind out a point or two. I have many nights where I get the direction right and then just exit the trade around 6:30-7am for a very nice profit. I have found that most of my trades are exited around this time as the trends come to an end or pause as we now are transitioning to the day. At 3am the dig daddy of Europe opens- the DAX. The Paris CAC and London FTSE along with the Swiss market open at this time. These markets are very "trendy" and the ES will follow along for the ride. By the same token if the ES is in a strong trend when these markets open they just continue what the ES has started.

I think the best advice I can give is to just watch the night market for a month. You need to get a feel for the ebb and flow of the worlds markets as the sun brings a new day to these regions
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I would also add, I have successfully picked up a few points after hours. I only will do this when I am at my computer for another reason.

I use my divergence system, just reduce the time frame to 15 ticks and look for 2 points. It is actually very responsive to my technicals.
 
Quote from Fast_Trader:

Anyone else trading the ES overnight?

-Fast
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yeah, it's at a 3 pt premium as we speak after a very fishy close on Fri and today being sort of holiday kind of. You gotta wonder, who's gonna come in on the open and buy? and if they do, they need to drive up the cash about 4 to five full points to get back to fair value.

But then again, whose gonna sell?
 
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