Swing Trading and Overnight Positions

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bluedemon77

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Holding overnight positions seems to result in big swings one way or another. Is the decision to hold overnight positions strictly a function of your trading time horizon or do you consider other factors, such as what you think the impact will be of a big news (e.g. Fed meeting) day? Are you more likely to hold an overnight position if a stock is trending as opposed to trading in a range or moving sideways?

Chuck
 
Quote from bluedemon77:

Holding overnight positions seems to result in big swings one way or another. Is the decision to hold overnight positions strictly a function of your trading time horizon or do you consider other factors, such as what you think the impact will be of a big news (e.g. Fed meeting) day? Are you more likely to hold an overnight position if a stock is trending as opposed to trading in a range or moving sideways?

Chuck
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Holding the position can result in a swing in equity....true. I've generally felt that these swings even out over time. I've also felt that important gaps tend to be in the direction of trend. That said, it's important to be playing with an appropriately sized position relative to your account. This is always true, but especially true when holding overnight.

It is a function of time horizon of course. I generally am pretty careful about what I'm holding and how much prior to "big news".

But again, big news tends to support the trend. Even news that is contra trend will tend to be reversed by the market shrugging it off.

All in all, holding positions tends to be a function of your style, and time frame. My guess is that the biggest traders hold some positions, and therefore "gaps" are part of the game.

OldTrader
 
I swing trade. I've backtested my system enough to not give a shit about news. If the entry is there, I enter - I don't care what is happening.

Really studying and testing my system was of prime importance, because otherwise I'd never have been able to trade without stress.


Edit: I think there's some poor grammar in there - have had a few drinks
 
it's rewardin' and much more realxin' and once i build upon enough profits i often let it run much futher. i always carry some positions overnite even tho am more of a position day trader. now am long mncs for quite some time, seekin' at least 50% gains, and [courtesy of zizzo] emc, from friday close.
 
Quote from bjg:

I swing trade. I've backtested my system enough to not give a shit about news. If the entry is there, I enter - I don't care what is happening.

Really studying and testing my system was of prime importance, because otherwise I'd never have been able to trade without stress.


Edit: I think there's some poor grammar in there - have had a few drinks
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That's kind of where I'm at right now, bjg--trying to develop confidence in my system, although "stress free" is probably too much to hope for in my case. That was also the reason for my question. In the stocks I'm interested in, backtesting shows that holding overnight tends to produce favorable results 75% of the time, but I was looking for some qualitative support from other traders. Thanks for your response.

Chuck

P.S. I hope you're in Europe, because it was 10:35 AM Pacific time when you posted this. But it's always cocktail time somewhere. Cheers!
 
I'll hold overnight with no problems, but I try to be flat before a fed meeting or something like that if I can see it coming. I hold overnight because I want to catch the gap if/when it happens :D .
 
Quote from bluedemon77:

Holding overnight positions seems to result in big swings one way or another. Is the decision to hold overnight positions strictly a function of your trading time horizon or do you consider other factors, such as what you think the impact will be of a big news (e.g. Fed meeting) day? Are you more likely to hold an overnight position if a stock is trending as opposed to trading in a range or moving sideways?

Chuck
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One chooses overnight holding for several reasons not the least of which are: less stress, better predictability and ability to trade using less margin. News is irrelevant to trading.
 
Quote from cashmoney69:

I'll hold overnight with no problems, but I try to be flat before a fed meeting or something like that if I can see it coming. I hold overnight because I want to catch the gap if/when it happens :D .
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Yes this is correct--One catches the full move. However, Fed meetings etc when utilizing overnight trading should not be worried about. When holding overnight , your stop should be well out of the range of intraday noise. That's all day trading is --noise. You wil find that once the noise dies down, the market will begin it's move in the same direction that it was going before the news.
 
Quote from Buy1Sell2:

Yes this is correct--One catches the full move. However, Fed meetings etc when utilizing overnight trading should not be worried about. When holding overnight , your stop should be well out of the range of intraday noise. That's all day trading is --noise. You wil find that once the noise dies down, the market will begin it's move in the same direction that it was going before the news.
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i wonder what kinda protection stops may give u overnite, especially on nyse listed stocks; if u monitor your positions all day and also durin' extended hours u'll be able to get out more or less where u want if shit happens..i mean if your stuff gaps hard there ain't no chance u gonna get filled where your stop lays and once u do the price u get is usually utterly terrible [nevermind all those intraday and overnite spikes that could literally kill u]. are u referrin' to futs or equities as well? i dont think stops are any good for stocks.
 
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