Been slowly getting into the DAX futures, paper trading has been okay. What I'm struggling to get my head around is the actual overnight hold strategy. Do most of you day trade the FDXM/FDAX and close positions before the US session ends, or is holding overnight more common than I think, given the volatility? And if holding, what's your typical risk sizing approach for those gaps?
Overnight holds on DAX? Sounds like a fantastic way to age prematurely. I'm usually out by the time the Americans are thinking about their second coffee, but I have to admit, those gap-up mornings can be tempting enough to make one consider the grey hairs.
It's a good question. From what I've seen, most retail traders I know tend to close out DAX futures positions before the US close to avoid those overnight gaps, especially with leverage. Institutional players might hold, but they have different risk parameters. What's your average holding period been in your paper trading?
It's a really valid question, and for new traders, overnight risk can be a significant hurdle. My personal preference is to mostly day trade the DAX, closing positions before the US close to avoid those unpredictable gaps. While some do hold, I find the risk/reward for overnight exposure often doesn't justify the potential downside, especially with leveraged futures.