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ryounkin

Trding volume in the futures market

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I have been observing the futures market recently. My style is more swing trading than day trading. I have been reluctant to experiment with the futures market for fear of getting blindsided by a market swing in the middle of the night.

 

Observation suggests that the overwhelming majority of the volume in the YM and ES occurs between about 10am and 4PM EST. Why is that? The market trades 24 hours a day. Why is all the "action" during business hours on the east coast AND can I count on that being the rule and not worry about getting whacked while I'm asleep?

 

Buck

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Hey Buck,

 

The reason for that is because the regular cash market hours are from 9:30-4, so thats when the majority of volume occurs in the index futures. As for the overnight volume and price fluctuations being lackluster for the most part...yea, it is. If you're in a trade and all heck breaks loose globally, you'll be either very happy if youre short, or very sad if youre long.

 

It's just like stocks if they get some bad news and youre in a trade with that issue. There's never gaurantees, but probabilities there are.

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When the floor traders are gone the market pretty much dies with it. Also majority of the US traders do not trade after 4-5pm. The eminis due trade 24hrs but liquidity is low. The markets will only MOVE on siginificant news overnight.

 

There's plenty of traders who swing trade the eminis. Always honor your stops though.

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You can't count on anything.

 

During the night the ES and EYM will follow the asian markets a little (nk particularly) and the european markets more strongly (estx50 and dax). If major news occurs then they will react to that news.

 

You either trade while awake or adjust your position size and strategies and trade overnight as well. IMO :)

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