As I checked my emails this morning, I realized that the stock and bond markets were closed for President’s Day. When you’re retired, every day is Saturday, except Sunday when the newspaper is thicker and the comics are in color!
However, it struck me as interesting that the futures markets were completely trading, moving around on every snippet of the “Potential War in Ukraine” news. It reminded me of when, back in my Trendstat days, we had to have one of our traders come in to work the orders for forex on the Fourth of July, because, hey, the UK doesn’t celebrate that holiday and is still open and trading forex in London. (Think about that one!)
The trading world is so much more automated than when I started trading futures with point and figure charts drawn on paper. This drastically leverages everyone’s time spent in actually performing the process of trading. You can run screens in seconds, look for setups while you’re getting another cup of decaf and even have the computer see the prices go through your alert and trigger an order to the broker platform for execution.
If you’re doing every aspect of your trading without the assistance of the huge number of efficiency measures that are available to the trader these days, you are not doing yourself any favors it seems to me. As I write this, I’m watching stocks down over hundred points on the NQs, bonds up a little, US Dollar down against all the major currencies and precious metals off a bit.
Something to think about: When you have a strategy and you shut down trading for an extended period of time (like a long weekend or the 9/11 crisis), prices still keep moving. There is less price discovery and there’s no change in the prices on your trading screen, but the prices are still moving. If you’ve set you stops good till cancel and you end up with a gap opening the next time trading is allowed in that market, you get a lousy fill and you end up with what I call strategy slippage. In other words, you could have an excellent strategy that historically show good return to risk characteristics, but for no other reason than the market were closed your fill is worse than it might be had the markets gone through your stop during normal trading hours and you received an efficient market fill.
The crypto markets are open 24/7 and everyone seems okay with that. Computers perform most of the executions in the exchanges. The world keeps on evolving, even when the markets are closed. Isn’t it time to just turn on the exchange computers 24/7 and let traders come to their own plans on how they want to integrate the concept into their strategies and minimize strategy slippage? I know that it would not change my trading life at all at this point. I would still run my stuff once per day. I would still play golf. I would still sleep well at night and I would definitely enjoy the ride!
Alex, you already face this in the foreign exchange (forex) markets. You can theoretically trade US Dollars 24/7 against the major currencies. What we did was pick a time at the end of the New York shift on the their trading desks, about 4PM their time. It allows them to distribute the orders to wherever they need to, close down the desk, transferring it to Tokyo and leaving work for the day for their commute home. We simply told our computers that 4PM was the end of our trading day and went from there. If it was more convenient for you to use something like noon or midnight, it should work. The market doesn't care what time zone you sit in. Make it convenient for you.
Today the closing of the day is the most important price where traders agree to keep the positions over the night. But there will not open and close price when we will tade 24/7. What point on the chart will be into your algorithms, sir? Thank you!