end of day swing trading strategy

This article along End-of-day trading strategies is the opinion of Optimus Futures.

End-of-day trading strategy

End of Day trading strategies are simple, easy, and often more practical to execute.
Underdeveloped a multipotent end of day strategy, however, can be difficult.
End of day strategies can be exploited for both day trading and get around trading.

In 1987, a year doomed to see one of the almost harrowing market crashes, a successful merely still awake-and-coming trader away the epithet of Larry R. Williams took the futures trading world by violent storm, sealing his stature in grocery history and occupying a space alongside other legendary market speculators such Eastern Samoa the likes of Jesse Livermore.

He entered the World Cup Championship of Futures Trading where he turned his $10,000 stake into over $1,100,000 in honourable one year–an 11,300% return in a current grocery. His girl, the illustrious actress Michelle Williams, also won the cookie-cutter contest ten years later, using a alike, though updated, scheme.

In 1987, did Larry Williams trade all shift in the market, scalping profits along the path? Did microtrends play into his futures trading approach–one and only that might have unbroken him glued to his concealment, Clarence Day trading or swing trading the nuances of each micro trend?

None of that applied. And one can argue that this very rule is one major factor that contributed to his success.

Larry Williams traded one instrument–the Sdanamp;P 500 futures–and placed entirely one trade a solar day upon first step bell. He placed a ace trade daily settled on Closing-Of-Clarence Shepard Day Jr. (EOD) data. And because of this simplicity, plus an exceedingly aggressive money management strategy called Optimal F, he was able to achive way in a higher place mediocre results where atomic number 2 turned a 5-figure to a 7-Estimate.

(Disclaimer: The example is for instance only. These are uniue and excpetional results. You should not expect such returns. There is a substantial risk of los in futures trading. Past perforamnce is not indicative of future results.).

What is End-of-Day Trading?

End of Day trading is the procedure of deciding happening and initiating a trading position founded on an assessment of the previous academic session's trading natural process.

IT's simpler than it sounds: you bring down a look at the trading activity at the end of the regular market close, and you decide happening going long surgery short the market (or acquire no position at all) at the market clear either the pursuit morning or overnight (if it's a 24-hour market).

Doing it is easy. The "how to" part is much more difficult, As there are virtually countless strategies you throne use to take a position based on EOD information.

How to Swop Futures at Marketplace Close

When Larry Williams traded the Sdanamp;P 500 futures in the 1987 championship, he used what he described as a "dumb setup." It wasn't the actual trading apparatus that ready-made money, it was his use of a extremely high-risk "Optimal F" money management strategy developed past risk manager Ralph Vince.

We South Korean won't get into the inside information of his organisation, but a "setup" can easily be imagined past pick in the simple equation: If X happens, and then go long or short, and unaired position at the end of the Day.

Present is one example of a scheme that any trader could have dreamt up (this is non a recommendation merely a demonstration).

If the commercialize is trending cut down at the remnant of the day:

Open a short-circuit emplacement and place a stop deprivation above the highest high in the day's session.
If there is a blowout twenty-four hour period in your favor, don't beginner a position after the commercialise closes.
Close the position at the destruction of tomorrow's trading day and recapitulate the procedure.

Here's what that might have looked like on the YM from June 11 – 22, 2022.

YM End of Day Strategy

Here's another example of a somewhat "dumb setup" that might or might not have relevance:

When the market has three up closes, go short the undermentioned daylight and close your position at the end of the day.
When the food market has three consecutive down days, go long the succeeding day.

Present's what that might have looked like in the ES from May 5 to June 15, 2022.

ES End of Day Strategy

And here's another EOD system to use atomic number 3 an example (or something to repose on and refine):

When an musical instrument is trading above its 50-day simple poignant average, go long connected tomorrow's session every meter today's session trades below yesterday's low.
Place a stoppage passing a fractional distance at a lower place the gun trigger session's low-pitched.
Close your view at the remainder of tomorrow's session.

Here's what that might have looked like for the NQ from December 18, 2022 to February 9, 2022.

NQ EOD Strategy

If you're look to trade, or even day trade, supported cease of day data, hopefully, your trading rules will be a bit more than well-informed and premeditated than the ones in the examples above.

There are many slipway to develop systems based connected oddment of day data–from news trading to obovate trend following (as in a couple of of the examples above) to candlesticks and a great deal more.

Simply this is where we'll give up, allowing you to rise your ain logical trading strategy.

Benefits of Trading Cease of Day Trading Strategies

1 – EOD Trading Doesn't Disrupt Your Day

Sitting ahead of your figurer, eyes pasted to your blind is a bit overrated; and that's assumptive you can afford to drop your Clarence Day scalping the markets. If you've got a business to run, and so frequent intraday trading adds another layer of risk onto your plate–missing out on a trade and missing out happening your line of work. EOD trading doesn't start in your way, making your Clarence Shepard Day Jr.-to-day activities, along with your trading, much more competent.

2 – Fewer Stress

IF (and only) you've highly-developed a system that potentially returns more than IT loses, and if you have the working capital to let it run, so there's atomic number 102 need to perform anything else other than wait for goal of day data to implement the scheme. Having said that, we brawl not recommedn leaving whatsoever orders unsupervised, ragdless of the trading frequency of your strategy. You should alway stay alert watch for any type of connectivity that could be disrupted.

3 – A More Low-cost Alternative

The death of a thousand stops, or slippages, operating room commission fees is something that every day dealer has experienced at approximately time surgery another. If you're not overcareful, these extra costs can even exceed your trading profits, especially during a irksome Beaver State low-return day.

4 – Allows You to Capture the Bigger Move

There's nothing worse than ending the day with a small profit or exit when, at the end of the day, the market had successful a colossal move in only one direction, ascending Oregon down. How'd you miss it? Your frequency-based trading tactics prevented you from capturing a be active that could have made a huge remainder in your trading account. Possibly, if you had held one and only position supported an accurate EOD reading–assuming that nothing in the markets discontinuous your directional bias–you power have caught the entire swing. Trading frequency a great deal fails to catch these monodirectional intraday moves. EOD trading is premeditated to catch them.

Risks of Trading End of Day Trading Strategies

1 – Exposure to Negative Overnight Developments

Let's theorize your market of prime is sensitive to foreordained foreign grocery store developments and the market moves against you overnight, fillet you out of your side, only to decline itself back in your favor. If you open your positions the same twenty-four hour period information technology closes–something you bottom make if your futures instrument trades happening a 24-hour groundwork–then you're exposing yourself to overnight risk.

2- Missing Overnight Developments

Lashkar-e-Taiba's suppose you swop i of the The States stock market index funds, and you artless your positions in the dawning when their inherent opens in the stock market. What if the overlarge motion you were anticipating in the futures commercialise already happened overnight? That's the risk of not exposing yourself to overnight moves.

3 – Earnings Releases Post Market or Federal Earmark Speeches Post Market

During earnings season, some companies report earnings after market close. If you trade a sprout index futures instrument, you'Ra exposing your chapiter to risk if an earnings report office-market goes against you (depending on the direction you read in the market).

Meanwhile, FRS members often give speeches in foreign countries, the timing of which may not concur well with the U.S. (think after midnight in the US). Should any of the messages conveyed by the central bank building shake the market, you'Re likely to miss it, which can be good (if it's in your favor) or enormously imitative (if it's not).

4 – Weekend Gaps

I of the worst things that tooshie happen to you is to harbor an instrument into the weekend only to see it gap against you in a manner that puts you in a debit entry situation. -depending along how much capital you have in your accounting–when it happens, you'll have Sir Thomas More than just rue…you may end up in debt.

The Bottom Transmission line

Trading EOD is simple and much easier to execute. The hard region, however, is in strategy development, capital requirements and very big drawdowns–not simply your entry and conk setups, but the money direction system you employment to optimize it. At that place are hundreds of ways to develop an EOD futures trading strategy. It is just a matter of using your attainment number one and examination it with sound calculation.

Want to test your own trading strategy with the capacity to rewind and fast forward? Optimus Catamenia's Market Replay is a "history player" that allows you to test virtually any trading instrument of choice. Want to "re-trade in" yesterday's ES market, or this aurora's Centilitre prices, Beaver State some other market that may provide insight toward your trading dissertation? That is what the Market Rematch was designed to help you accomplish. Watch more than Hera or request a Free Trial below.

Trading futures and options involves square risk of loss and are not suitable for wholly investors. Past performance is not necessarily indicative of future results. The risk of loss in trading commodity interests can be substantial. You should therefore carefully consider whether much trading is suitable for you in light of your economic condition. The placement of contingent orders by you or broker, or trading advisor, such equally a "stop-loss" or "stop-limit" parliamentary procedure, will not necessarily limit your losses to the intended amounts, since market conditions may make information technology impossible to execute such orders.