More often than not we find ourselves with only a few set ups during the day. So what do we do when we find ourselves becoming bored and unfulfilled with the futures markets lack of movment. We head to the overnight session to try and make it up or even add to your regular session emini trading. This can be a good and bad trading strategy.
It's safe to say that if you're trading futures you know that most major markets are traded overnight. There is sufficient liquidity in the overnight session in markets such as the ES( S&P 500 E-Mini ) , 6E ( E-Mini Euro ), GC (Gold Futures ) , and CL ( Crude oil Futures ). The problem is that it is just "sufficient". Just as during the regular session the overnight session can become very slow leading you to put on trades out of boredom. This problem only compounds when you are not on your game physically and mentally. In most cases it's simply not worth it to be up every night for many reasons.
Where the main problem arises is the idea that you can consistently sustain trading in both the overnight session as well as the regular session. Physically and mentally you become drained leading to you enter into a trading haze of drowsiness and lethargic behaviors. Simply put you won't be on your game as much as you try to convince yourself that you are. Almost 100% of trading futures in my opinion (not to get to cliche here) is "trading in the zone" which couldnt be more true when you've expierenced trading an entire 24 hour trading session. You'll place trades to meet the criteria of your extended bed time which on occasion work, but forcing this is never a good idea.
Now comes the morning after a few hours of sleep and your performance is fresh on your mind from the overnight session. This will no doubt carry over into your morning trade(one factor alone is that it shows up in your p/l). You may have done well and think you are spot on and decide to place trades using your emini software only to give back all of your profits. You also may have had a bad overnight trading session and that carry over simply continues those few hours later.
So what do I do? I simply choose where my focus will be with respect to my trading. Will it be in the overnight session for the next day or will it be the regular session. I study the trend in activity before deciding to trade the overnight session. I study to see if the regular session is becoming choppy while the overnight is acting as a normal trading day would. Is there some wild European news that may be throwing the market around allowing opportunities. Simply put is there an opportunity to take advantage of better behavior overnight. If there isn't then I don't even make an attempt as it is not worth it to be drowsy in your daily trade decisions.One habit in particular in my trading experience is caused by lack of sleep and drowsiness. This habit is a nonstop placement of orders in an area you believe to be a good entry level . You aren't on your game and though your directional idea is correct your entry becomes sloppy and you continue to attempt to be involved in the trade only to be stopped out 3-4 times before you even get your trade working. So you end up with no profits in the end and commissions to deal with. In the end your best bet is to trade the regular session alone until you are comfortable enough with your discipline to limit your overnight trading to a very selective amount of time.
FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.