Consider or not overnight data?

CFerret · Oct 11, 2006

Hello everyone -

I ask experienced people to help me to solve the following dillema:

consider or not overnight data when trading US futures?

From one side mostly moves with enough volume have meaning, but from the other side YM for example tends to follow European indices during overnight time and it can provide some clues about overall world markets sentiment.

I'm mostly asking cause these two cases can easily turn some indicators by 180 degree, so that price with overnight data included can easily be above MA and price without overnight data - below (for example).

Can't decide myself what chart representation has more sense and is more accurate. Need help.

Tyren · Oct 13, 2006

I use both in ES and CL.

yoohoo · Oct 13, 2006

I covered this a few times in Interesting Charts thread in TA. There are 2 camps - use them both. See attached charts and Interesting Charts for explanation.

Bearbelly · Oct 13, 2006

I like to see those gaps. I suppose you can watch both but, for me, too many different things leads to indecision.

kiwi_trader · Oct 13, 2006

Build a strategy that works for one or the other ... and then trade it. Lots of gap based strategies are effective in the US markets and for those you need to ignore the overnight data.

CFerret · Oct 13, 2006

Thanks a lot for opinions.

So far I decided to consider all 24h data, cause I watch both European and US markets (begin my trading day with european session and continue with US) and psychologically perceive them much like one mega-market with it's own trends etc.

And to consider gaps I can just draw two horizontal lines @ yesterday's close and today's open.

Thanks again!
Janis

Tyren · Oct 13, 2006

Europe-session is becoming more and more important, just look at oil, gold and EUR/USD. And all the new IPO's listed in London and other places in Europe.

elindydotcom · Oct 13, 2006

If using the 24 hour session, consider using tick charts intead of time based charts. This helps smooth out many indicators and provide a much different perspective on price action.

As with anything else there are shortcomings but I like the tick charts on the 24 hour sessions better than time based charts.

-eLindy

CFerret · Oct 16, 2006

Thanks for great idea Lindy!

I tried to use tick and volume charts instead of time based and it really reduced the noise while showing overnight activity very well.

Will try to experiment with P&F charts as well...

Quote from elindydotcom:

If using the 24 hour session, consider using tick charts intead of time based charts. This helps smooth out many indicators and provide a much different perspective on price action.

As with anything else there are shortcomings but I like the tick charts on the 24 hour sessions better than time based charts.

-eLindy

Consider or not overnight data?

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