OVERNIGHT EDGE.

  • INSTRUMENTS TRADED: S&P500 & US Gov't Bond. Implemented using ETFs. Subscriber can choose which ETFs to trade based on return/risk preference (see table below).
  • TRADING FREQUENCY: Signals generated daily approximately 15 minutes prior to market close. Positions are entered near 4pm New York time and exited Market-On-Open at 9:30am New York time.

CONCEPT

OVERNIGHT EDGE is a short term strategy that trades the S&P 500 index and US Treasury Bond ETFs in the overnight session (enter at market close, exit following day at market open). The strategy focuses on this timeframe due to several unique edges and driving factors that are not present during the day session. Some factors include:

  • Overnight reaction to changes in trailing stock market volume and breadth
  • Overnight reaction to intraday upside/downside volatility in prior day session
  • Effect of external shocks such as government economic releases

The strategy is long-only and does not take inverse positions. It can only be invested in one asset at a time - either S&P 500 or Treasury Bonds. Subscribers can choose which ETFs to trade based on their return/risk preference:

RETURN/RISK S&P 500 ETF T-Bond ETF
OvernightEdge Plus UPRO (3X exposure) TMF (3X exposure)
OvernightEdge Moderate (approx 2/3 ret. & 2/3 risk of 'Plus') SSO (2X exposure) TLT (1X exposure)
OvernightEdge Conservative (1/3 ret. & 1/3 risk of 'Plus') SPY (1X exposure) TLT (1X exposure)

IMPLEMENTING THE STRATEGY

This strategy is recommended for traders that can commit to being at their computers during the last 15 minutes of every US trading day. This is when the OVERNIGHT EDGE trades are generated and you will implement in your account accordingly. Important note: because this is a daily trading active system, you will not receive email notifications of signal changes - you will need to log in every day in the last 15 minutes of the US session to check for new trades.

After the position is entered, you will need to exit at tomorrow's market opening. Once your position is initiated, you may input a "Market On Open" sell order. This will automatically close out your position at 9:30am New York time.

If you are unable to trade the system yourself due to time limitations or lack of comfort level, it can be auto-traded in your own account by a professional money manager. For details please visit our Auto-Trading page for details.


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