Daytrading vs going overnight
Busy trading this morning. Not that you could expect a lot of movement with the FED probably raising rates today. Though I don't trade news I cant't miss the importance of the decision.
Yesterday I refered to this blog. One of his articles has an interesting subject, the common believe going overnight is a risk. Though it is a risk, it can lead to a big loss while you can do nothing about it, a surprising outcome of his study performed with the SPY's over many years. His conclusion:
If one had bought the SPYs on the close over the past 12 years and sold them on the next day's open, they would have made 143 SPY points (plus, they would have also received all the quarterly dividends). And had one bought the SPYs on the open each day and sold the position on the close, how would they have done? They would have lost money! How much? A little more than 67 points. Yes, in spite of a solid upward move in SPY prices, the intraday move--on a net basis--was negative! All the gains, and a great deal more, came from holding the SPYs overnight. And then a good chunk of these gains were lost while the market was open.
So no daytrading anymore and get rich sleeping?? No.In bearish periods you win nothing. Can You wait the period no matter how long it lasts? It is also not the conclusion of the writer:There are many successful daytraders and they are succeeding for a multitude of reasons, including shorting the market at appropriate times
daytrading
FDAX
Yesterday I refered to this blog. One of his articles has an interesting subject, the common believe going overnight is a risk. Though it is a risk, it can lead to a big loss while you can do nothing about it, a surprising outcome of his study performed with the SPY's over many years. His conclusion:
If one had bought the SPYs on the close over the past 12 years and sold them on the next day's open, they would have made 143 SPY points (plus, they would have also received all the quarterly dividends). And had one bought the SPYs on the open each day and sold the position on the close, how would they have done? They would have lost money! How much? A little more than 67 points. Yes, in spite of a solid upward move in SPY prices, the intraday move--on a net basis--was negative! All the gains, and a great deal more, came from holding the SPYs overnight. And then a good chunk of these gains were lost while the market was open.
So no daytrading anymore and get rich sleeping?? No.In bearish periods you win nothing. Can You wait the period no matter how long it lasts? It is also not the conclusion of the writer:There are many successful daytraders and they are succeeding for a multitude of reasons, including shorting the market at appropriate times
daytrading
FDAX
posted by Carlo Giuntoni at 3:58 PM
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