Futures trading runs 24 hours a day from Sunday night until Friday’s close.  It can be done with a dedicated team of employees working in shifts or with a slew of computers following automated systems.  Either way, running a trading desk, is obviously a full time job.

In this blog post I thought I’d show a snap shot of trading signals over a 24 hour period to provide perspective on trading activity.  The chart below shows the number of trade signals broken down by hour from midnight-to-midnight for January 21, 2016.  A total of 26 trades were generated over 23 markets.  For perspective … twenty plus signals is a normal day for our trading systems.

These signals were further broken down by time segments.  Each time is based on the Eastern Time zone.

  • Midnight – 6 AM
  • 6 AM – Noon
  • Noon – 6 PM
  • 6 PM – Midnight

Additionally we looked at signals based on night and day sessions.

  • 6 PM – 6 AM (Night Session)
  • 6 AM – 6 PM (Day Session)

 

Let’s focus on the day/night trading sessions …

Chart 1: Trades by the Hour

 

Not surprisingly there is more activity during the day session than there is during the night session.  A closer look at the signals generated on January 21st, we see a breakdown of 73% day signals and 27% night signals.  This basic 70/30 split is very common based on our history.  If we assume our trading activity is remotely normal … than an individual trader will need to be prepared to monitor and trade at all times during the trading week.

Individual traders may not have the ability to track the markets 24/5, so when it comes to overnight trading … they have three options:

  • Option 1:  Exit all positions before the night session (e.g. Globex open) and re-establish any remaining positions the next day.
  • Option 2: Maintain all open positions but not establish new overnight positions until the next day.
  • Option 3: Actively trade all positions over a 24 hour period.

 

Based on our testing … Option 3 (trading all signals at all times) is the superior trading approach to follow.  Trade however you want; but realize that when opportunity knocks you better be available to answer the trade. The markets will not cater to your your sleep cycle.  Bottom line … we answer the call using our automated trading systems.

Here is a link to see today’s trading activity.  Trades by the Hour