Strategy.Forced.Stop – MTF Systems
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Unless I’m trading a strategy on a Daily or 4-hour TF, I usually, no matter whether Dax or FX pair, i limit trading hours to 9-20 or 9-21 at most.
I do this to avoid having to pay a bigger spread!
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Unless I’m trading a strategy on a Daily or 4-hour TF, I usually, no matter whether Dax or FX pair, i limit trading hours to 9-20 or 9-21 at most.
I do this to avoid having to pay a bigger spread!
I’m not a fan of using FLATAFTER to close a trade just because a time has been reached – this can be an absolute strategy profit killer just to save a couple of pips of spread. Time is not a reason to close any trade – you might as well say I am going to close this trade because it is my birthday!
Only opening during trading hours has more merit but even then not if the price you would have got out of hours even with the spread is still a better value entry price. My tests to quantify this so far have proven that there is no benefit to trading only in market hours unless of course the spread outside is so massively different – for example the Italy40 has an out of hours spread of 38 and an in hours spread of 8. Then again I would never trade what I call Mickey Mouse indices like that anyway. Even the DAX I avoid generally as it has an out of hours spread of 5.0 and in market hours of 1.0 plus nothing I code ever seems to work great on it.
The ratio between the out of hours spread and in hours spread tells you a lot about how worthwhile a market is to trade in general from my experience.
This is some examples of the spread at UK midnight divided by the in market hours spread. The lower the ratio result the better the market is for in and out of hours trading in my opinion. I base this on my style of end of day/end of week trading where I would get the midnight or market open on Sunday price.
- SP500 0.6 / 0.4 = 1.5
- USTech100 2.0 / 1.0 = 2.0
- EU50 = 3.0 / 1.5 = 2.0
- DJI 3.8 / 1.6 = 2.375
- Sweden30 1.5 / 0.5 = 3.0
- FTSE100 4.0 / 1.0 = 4.0
- France40 4.0 / 1.0 = 4.0
- Italy40 38.0 / 8.0 = 4.75
- DAX 5 / 1 = 5.0
Spreads can be found here for IG:
You have to be careful sometimes when doing intraday trading as for example between 2200 and 2300 the DJI spread jumps to 9.8! At least with end of day/week trading you know exactly what spread you will be getting.
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