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Welcome to Nightly Patterns! – Overnight Trading

This futures trading room focusses on high leverage Overnight Trading with futures:

“Just open the trade at the close and, if not stopped, close it at the open.”

One of the main advantages of the Nightly Patterns trading style is that it gives traders the opportunity to trade at a specific time, avoiding constant market screening. Furthermore, it allows traders to keep their money in cash during the day, making it possible to add Overnight Trading to other Intraday Trading strategies. Its unique time horizon makes this trading style completely uncorrelated to most other strategies, leading to superior portfolio diversification.

To download the results excel sheet follow this link: TRADING RESULTS

Have a look at my over 400 PATTERNS library following this link: PATTERNS LIBRARY

This picture shows NIGHTLY PATTERNS’ backtested equity growth back to 1993:

SYSTEMS_EVENTS

I search nightly patterns like people in the north look for Aurora Borealis.

If you want to subscribe NIGHTLY PATTERNS follow the procedure here:

SUBSCRIPTION BUTTON

The FREE posts will be published the day after with a short trade overview. (from 7th January 2015)

If you are interested in Nightly Patterns’ KNOWLEDGE,

here are my Quantitative Guidebooks:

SYSTEMS

“I search nightly patterns like people in the north look for Aurora Borealis.”

AUSTRALIA-ANTARCTICA-AURORA AUSTRALIS

GLOBAL TRADE TITAN AWARD

Nightly Patterns belongs to the 10 best  sites

out of more than 1358 global futures trading rooms

again in 2018, since 2014

TTW 2015 bb

WHO ARE THE GLOBAL TRADE TITANS?

Check them all at:

WWW.GLOBALTRADETITANS.COM

I swing traded as a PROTRADER at:

VERIFIED INVESTING

I trade VIX etps at:

BACKTESTINGVIX

and GOLD at

GOLD TRADING GOLD

and my full trading strategies portfolio:

QUANTFOR


MY VISITORS GLOBE – WHERE DO TRADERS COME FROM?

Map

Micro E-mini Futures launch!

“Somebody must come in… We want them to play here!”

“CHICAGOMay 6, 2019 /PRNewswire/ — CME Group, the world’s leading and most diverse derivatives marketplace, announced the successful launch of its new Micro E-mini futures on the S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average indexes, which became available for trading today.”

It’s great to have such a small tradable ES future. It makes it easier to adjust positions and it leads us to much more effective money management strategies.

Let me ask an easy question: what’s happened last year (December 2017) after Bitcoin futures were introduced in the CME board? Well, when big amounts of new liquidity comes in a market the potential volatility increases dramatically.

If there’s a bubble, the bubble bursts!

Let me ask another question: what’s happened on September 1997 when the E-mini futures were created? Well, there wasn’t a bubble.

Smaller futures contracts mean that many small traders can now affort to enter the market, both long or short. They are always doing the wrong thing. Buying greed and selling fear. On the contrary, big hands, institutional traders and investors, do the right thing.

When small traders came in late 1997, they helped to create the Dot-Com Bubble, because we were not in a bubble.

In late 2017, during the last Cryptos markets big bubble, big hands coming in recognised the too big bubble and made it burst shorting futures. The panic started and small cryptos traders started to sell their cryptos for what it has shown to be something like a 90% bear market in cryptos.

What’s happening now with the launch of the new Micro Mini Futures contract? Where are the big hands in the stock market? They’re already long since 2009. The day of the announce is very close to the all time stock market highs. They have been in the market for more than 10 years now. And they are looking to get out of it. Somebody else (small traders) will be long for the next big bear market coming.

Just another story. Let’s see the future”s” markets!

Marco Simioni

Nightly Patterns

 

 

 

 

Nightly Patterns vs stock market correlation

I wrote last week a post on intraday versus overnight stock market correlation. You can read it here. There’s a further step now: investigating on Nightly Patterns returns vs stock market daily returns.

Is Nightly Patterns doing better than simply entering all nights explored on the last article in terms of correlation?

And second question: is Nightly Patterns doing better of just entering all days in the market (like a buy and hold strategy) in terms of correlation?

The main problem to deal with is that Nightly Patterns doesn’t trade all nights. It only trades on average 1.5 trades per week. How can it be compared to daily stock market behaviour?

Simply comparing monthly returns of Nightly Patterns (trading SPY instead of ES or Emini) and SPY monthly returns.

That’s an easy magic trick!

Here’s the big magic number: -0,1865

Correlation is more than 10 times negatively correlated than last article’s one! This results is due to the high selective power of Nightly Patterns.

And what I like most, if you look at the chart above you can see that the correlation is always below 0. Furthermore, in the last few years it has been steadily around its average of -0,1865. Here we are!

Marco Simioni

 

 

Overnight vs Intraday Stock Market Correlation

“Why should a trader approach overnight trading?”

Before looking at potential high returns, I would answer:

“Because of its correlation to intraday stock market movements!” I would reply.

What does it mean? The greatest strategies or systems to add to a portfolio of strategies or systems are those uncorrelated or negatively correlated to the general performance of stock markets. This is the only way to unveil the Shannon’s Demon. Especially those uncorrelated to the intraday stock market returns. One of the best proxy for the stock market is the SPY etf.

Here’s the big number: -0,017

That’s the correlation between all nights and all intraday returns since SPY inception in 1993. It’s slightly below zero. It means the overnight session is not correlated at all with the intraday session. It’s like a two uncorrelated stocks portfolio!

That’s all folks!

P.S. In the chart above, intraday returns are on X asses and overnight returns are on Y asses.

 

 

Overnight trading in the New York Times!

I’ve read it now, but I’ve been profiting with it since 2012!

Have a good read,

Marco Simioni

Nightly Patterns

Tech Cold War – White Swan #2

There’s something in the air…

When we come to new all time records and White Swans, they can behave in strange ways. Sometimes the extreme event fails to revert back to norm. Like it happened last week.

Today I was reading something about the potential commercial tech cold war among China and US.

We are used to this kind of articles. Anyway the recent poor overnight performances showed 14 nights with a total performance of more than -8% loss on SPY. It’s a huge overnight loss. It looks like the markets believe in this potential tech cold war.

Are we facing a new global recession and big bear markets?

Including today, looking back to 1993 (SPY inception), there are only 20 similar events. 19 of them are included in the 2 big bear markets of 2001 (in September) and 2008 (in October). Only one instance occured in 2011.

To sum up, there are 95% odds of being at the start of a 50% or more big bear market like those of 2001 and 2008. On both it happened at the final stage of the bear market. Now we are coming down from all time highs: this time it should be different.

This is what the stock market is telling us. Let’s wait and see!

Marco Simioni

Nightly Patterns

 

 

6 crash nights down in a row – White Swan

There’s something out there… A White Swan is coming!

China has finally reacted to Trumps export duties. Is the commercial war starting today? Nobody knows… The only thing we know is what the markets are doing now: crashing overnight and going sideways or up intraday.

SPY gapped down for 6 nights in a row today. This is not unusual. What is completely new is that SPY lost about 5.81%, summing up all these 6 nights. This is a bearish record performance back to 1993. It has never happened for more than 26 years (since SPY inception).

It only happened once (March the 16, 2011) that it lost more than 4.5% but less than 4.75%. It has been followed by 4 up nights in a row with a total of 2.81% of return. I’ll keep it in mind for the next 4 nights.

I call these events “White Swan” because we know how they are and that they may happen in future. I would now say this to be a “Black Swan”. You should not be able to describe the Black ones before they happen… anyway for the White ones it should be easier!

Marco Simioni

Nightly Patterns

Enjoy the new Global Trade Titans webinar on Wednesday!

Traders Talk Live is hosting a webinar entitled:

Trading Smarter, Not Harder

Dr. Dean Handley is panelist speaker and presenting:

TITANS WEBINAR

Date: Wednesday April 10, 2019Time: 1:00 pm EST

Register: here

 

See you there on Wednesday,

Marco Simioni

Global Trade Titan

GLOBAL TRADE TITANS AWARD – year after year!

It is a pleasure to announce that Nightly Patterns has been awarded as a Global Trade Titan for 2018 again! Now I’m beginning to be considered one of the elderly ones…

I have been in the Titans team since 2014. So it’s 5 years years now. I must thank again Dr. Dean Handley’s great truthful and transparent work with us.

2019 has started with great wind on our overnight trading wings and huge profits.

Remember to keep Global Trade Titans website monitored frequently as we have many interesting articles by Dr. Handley coming out and new entries as well…

Thank you Dean!

Marco Simioni, Global Trade Titan

TTW 2018 bb

I wish I had a future… on S&P 500 Dividend Aristocrats etf!

nobl

I’m always looking around for new market edges… There’s a lot written on high dividends stocks stronger bullish bias over lower dividend stocks. Many articles have been written on fundamentals factors and so on over dividends… I decided to run a simple backtest this morning:

be long every day at the overnight session on NOBL etf (from today’s close to next day’s open), you can see this on the “above zero line” cumulative % return equity curve (not compounded);

the opposite (always long) (from today’s open to today’s close) equity curve is displayed of course below the zero line. It shows a strong bearish edge. Intraday session delivers a total 70% loss being long everyday.

It is clear from the chart above that the overnight session leads to strong performances being long all nights: about 117% return since this etf inception in October 2013.

This is roughly 3 times the equal strategy returns of SPY! (it’s about 35% since 2013)

I wish I had a future…

More than 6 years of Nightly Patterns!

Greetings traders!

It’s more than 6 years now Nightly Patterns is trading LIVE (October 2012).

It’s not easy to find trading services that have been trading live for more than 6 years profitably.

What have traders following Nightly Patterns since October 2012 earned so far?

I know, I know… we lost in 2015. I’m not “Mr Market”. This is part of the game. We closed 6 profitable years out of 7. And that loss was very little compared to the huge profits.

Anyway, it depends on the number of contracts traded and their consistency. It’s not easy to be patient and consistent in the long run, specially during long and deep drawdowns. Updated results here. But at the end patience and consistency win the game!

Many of you have been keeping on trading and many have been trying and leaving. Consistency and patience, it pays to stay!

Here are the numbers:

6 years

Well, I have considered 6 years for the yearly subscription fee so $798*6 = $4788. And Ihave considered 1,2 as an average eur/usd change rate, as yearly Nightly Patterns fee is 665 Eur. I didn’t consider brokers futures trading fees. Mainly because trading frequency is low and futures fees per contract are usually very low too, the impact is minimal.

The % impact of Nightly Patterns subscription on returns goes from 19% to 2% as we increase the number of contracts.

I let you think about the numbers!

Hope to see you in,

Marco Simioni

Nightly Patterns

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