Trading Guide For Short-Term Traders On The Overnight Markets

Trading out of the regular market hours isn't a recent phenomenon. Since my beginnings as a trader in the 1980's, I have seen lots of growth in the markets with the most significant change being the development of overnight markets. 

Trading in night session for short-term traders one needs to understand the process of the overnight market fully, and essential knowledge who controls the market

The majority of contracts for e-minis are available for approximately 24 hours per trading session. Based on the fact that the market closes briefly after the cash session for thirty minutes for audit, then begins the next day's activity, with the chance for several buys and sells opportunities within a one hour or two.

The majority of traders tend to view the market between the 8:30 in the morning and 3:15 in the afternoon EST. However, the rest of the global population will not take the rest of the day off or care to do so. From Asia to Europe and all the area in between, different locations around the globe have control of the markets while markets in the United States rests.

Of course, trading in the US does not rest for long and when "awake" it will provide a trader with insight into the price-action activities; as well as allowing marketers to discover some great opportunities. While early rising is not always an easy task - particularly for the night-owls - the early bird trader will always have a chance to earn more money if they are aware of the best market and trading techniques to use.

By monitoring the overnight market, it is possible to discover new routes to profit and determine how the following day's market will perform. Unfortunately, learning the movement of the market within a vacuum of news, information, and economic drivers can be a profoundly overwhelming task.

So, the question begs as to what contracts a person should trade. The answer is, any market presenting with a decent price action movement and volume. Of course, as with most things, this is much easier said than done as many of the secondary indexes remain quiet during evening hours. For a person to be successful, he or she should be creative in choosing the contract planned for e-mini products.

Overnight trading and who controls the market.

Trading in night session for short-term traders one needs to understand the process of the overnight market fully, and essential knowledge who controls the market and how.

The first major overnight market opened following the close of the US day session is Japan's Nikkei 225 stock index. This follows by Hong Kong with their Hang Send stock index. When these two primary Asian markets hold the floor, they do not only set the tone of the following day's US markets but will also push and pull the overnight e-mini S&P 500 market as well. 

The Asian-Pacific markets are alternate to the US market in that it has different economic news with the "how and when" that will filter the effects of the global markets. E-mini S&P 500 futures are mainly influenced by the trends apparent when the Asian-Pacific session is open. 

The first lesson that novice overnight traders need to learn in their new surrounding is that you must not be too eager to earn lots of profit. Despite the fact that the out of regular trading hours, trades in a similar manner to the day market analysis regarding big news, you will feel frustrated if you opt to follow its prices. 

Potentially the best strategy is waiting for the correct setup, getting into the market, placing a protective stop, and then find something else to occupy your time while checking in on the trade every so often.

What happens when the Europe market wakes?

The European market begins to trade at 2 am EST and evidence of market direction can then be more evidently viewed. The largest economy in Europe belongs to Germany with the DAX futures being a significant market to follow. Due to this transition from the Asia-Pacific to the European market, the e-mini S&P 500 futures start to monitor the lead of the DAX futures movement.

Typically, the majority of European market news is shared between the hours of 4 am, and 5 am EST. It can become tiring to wake up at 2 am each day, but 4 am might more suitable for most people and easier to integrate into daily sleeping routines. The following of economic news is essential because it will indicate market-moving events and will show the movement of the particular market sector.

In Conclusion

Overnight trading for short-term traders can be useful, but it will also test one's patience. If you are not accustomed to dealing with slower markets, this can be challenging to manage. However, as the sun begins to rise, the volatility and volume enter the market, and it is much more painless to enter or exit the market with a profit. Of course, you will need to know the "when and how" for success.

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