Holding overnight positions - Trading-Lab

FabMav · #1 07-31-2007, 05:42 PM

I'm considering devoting a larger percentage of my trading to swing trading. However, one thing bugs me off: swing traders have to assume a higher risk than daytraders. I'm talking about the risk of holding overnights on your multi day swing trading plays. how do you manage that additional risk? do you use any particular strategy to mitigate that risk?

ProTrader · #2 08-03-2007, 03:06 PM

have you ever heard the old saying "there's no free lunch"? Holding overnights does have additional risk, and that risk should always be in the back of every trader's mind.

FabMav · #3 08-13-2007, 06:51 PM

actually, I KNOW about the free lunch thing, and the additional risk involved in holding overnights. What I was asking is HOW you manage that additional risk. Any method, etc….hope I made myself clear now….

hedger · #4 10-03-2007, 01:58 PM

one way to mitigate the additional risk you have to assume by holding overnights is to always spread your overnight holdings over several uncorrelated stocks. Pick stocks in different sectors and have a good balance of longs and shorts. In other words, don't put all your eggs in one basket!

Leth · #5 10-07-2007, 02:26 PM

managing risk = keeping your bets small

ChaosTheory · #6 10-08-2007, 07:37 PM

diversification is also an effective way to manage risk

BuyLowSellHigh · #7 10-16-2007, 07:59 PM

when deciding whether to hold overnights or not, I usually stay away from stocks approaching their earnings releases. Also, I do not take home positions in stocks which are dependent on regulatory bodies for their products approval (i.e.: FDA) as they can get whacked pretty bad should they not get their product approved.

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#1 07-31-2007, 05:42 PM
FabMav Member Join Date: Jun 2007 Posts: 33	Holding overnight positions I'm considering devoting a larger percentage of my trading to swing trading. However, one thing bugs me off: swing traders have to assume a higher risk than daytraders. I'm talking about the risk of holding overnights on your multi day swing trading plays. how do you manage that additional risk? do you use any particular strategy to mitigate that risk?

#2 08-03-2007, 03:06 PM
ProTrader Senior Member Join Date: Jun 2007 Posts: 109	have you ever heard the old saying "there's no free lunch"? Holding overnights does have additional risk, and that risk should always be in the back of every trader's mind.

#3 08-13-2007, 06:51 PM
FabMav Member Join Date: Jun 2007 Posts: 33	actually, I KNOW about the free lunch thing, and the additional risk involved in holding overnights. What I was asking is HOW you manage that additional risk. Any method, etc….hope I made myself clear now….

#4 10-03-2007, 01:58 PM
hedger Member Join Date: Jun 2007 Posts: 38	one way to mitigate the additional risk you have to assume by holding overnights is to always spread your overnight holdings over several uncorrelated stocks. Pick stocks in different sectors and have a good balance of longs and shorts. In other words, don't put all your eggs in one basket!

#5 10-07-2007, 02:26 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	managing risk = keeping your bets small

#6 10-08-2007, 07:37 PM
ChaosTheory Member Join Date: Jul 2007 Posts: 44	diversification is also an effective way to manage risk

#7 10-16-2007, 07:59 PM
BuyLowSellHigh Junior Member Join Date: Jun 2007 Posts: 20	when deciding whether to hold overnights or not, I usually stay away from stocks approaching their earnings releases. Also, I do not take home positions in stocks which are dependent on regulatory bodies for their products approval (i.e.: FDA) as they can get whacked pretty bad should they not get their product approved.