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Old 12-26-2010, 11:22 PM   #1

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Question E-mini Dow Futures

I have noticed that the emini dow futures have big swings in the middle of the night!
Is there any good times to catch breakouts since the emini dow trades 24/7!
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Old 12-27-2010, 01:00 PM   #2

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Re: E-mini Dow Futures

You need a strategy, based on the following four phases:

1) Discovery
2) Rule Creation
3) Testing and Refinement
4) Implementation

The "Discovery" phase includes looking at charts, looking for patterns, asking why price behaves the way it does, coming up with theories for price behavior, and making some general conclusion about how probable it is that price will behave a certain way under certain conditions.

In the overnight hours, there are no market internals to guide you. There are no scheduled U.S. news releases or U.S. earnings reports. So speculation on the next days news is probably a substantial input to why the overnight market does what it does.

You could develop a strategy based on speculation about tomorrows news. You could try to enter at price extremes, hoping that price will retrace back towards the center. You could buy highs, or sell lows, hoping that the price will go even higher or even lower. You could speculate on gap fill probabilities.

Are you awake and watching the ES overnight? Are you going to place orders ahead of time to be filled? Are you going to enter and order and hold it going into the next day? All of these factors need to be part of your strategy.

Sometimes price goes to an extreme and then retraces. Sometimes price goes to an extreme, and never retraces, it continues even more. How are you going to deal with those situations? If you are in a loosing trade do you stop and reverse, or just take the loss?
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