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MSby u/mller_sara·19hQuestion

Thoughts on managing overnight risk with Asian markets?

Still relatively new to consistently trading Asian hours, mostly focusing on $NIKKEI and some of the broader index ETFs. I'm finding that my typical stop-loss approach, which works fine during more liquid hours for me in Europe, feels a bit… exposed when I'm asleep. I've had a couple of instances where a gap down has blown past my stop, meaning my effective risk was far higher than intended. Not huge losses, but enough to make me rethink.

For those of you who regularly hold positions overnight into the Asian session, how do you manage that gap risk? Do you just size down drastically, use wider stops, or perhaps focus on products with lower overnight volatility? Or is it simply a case of 'that's the game, mate'?

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2 Comments

ASu/asiddiqui·17h

This is something I've been wondering about too! Do you ever use any conditional orders or OCOs to manage that overnight risk, or does it still not quite catch those big gaps effectively?

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VMu/varga_maja·17h

I've wondered about this too! Do you find any difference in volatility or liquidity in those markets during what would be your typical sleeping hours compared to European or US hours?

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