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The Impact of 24-Hour Trading on Day Trading

Increased activity in the European futures markets as well as 24-hour futures trading through the Globex system has had a significant impact on the U.S. futures markets. Some day traders are concerned that these influences will adversely affect their systems, methods, procedures, and profits. I disagree. As long as we remain cognizant that markets are now globally traded on a round-the-clock basis, we can adjust our methods accordingly. Here are some suggestions and observations regarding the European markets and 24-hour trading with respect to your role as a day trader:

1. First let me define what I mean by the European markets. Time will certainly alter my list, but I mean primarily the markets traded at the London International Financial Futures Exchange (LIFFE) and the MATIF exchange in Paris. The specific markets which I find extremeВэly reliable using the indicators and methods in this book are Gilt, Bund, Italian Bond, EuroMark, Short Sterling, FTSE 100, Pibor, CAC40, DAX, and Notionell Bond.

2. The systems, methods, and indicators discussed in this book appear to be effective in all markets no matter what their geographic locaВэtion. As examples consider Figures 23-1 through 23-5, which illusВэtrate a number of the indicators discussed in the preceding chapters. From all indications these methods work just as well, if not better, in the European markets.

3. When using the gap trading system on the currency, stock index, and interest rate futures markets, which are traded overnight in the

Globex, do not use the night session data, since they tend to obscure the gaps. I've found that the gaps are working very well as long as the Globex trading is ignored for the purpose of calculating gap highВэer or lower openings.

4. Remember that as the trading world grows smaller, we will find ourВэselves in an international market which will be affected by news all over the world. This is expected to be very beneficial for the day tradВэer, since it will create more market swings as well as more volatility. As you know, change begets opportunity.