Trading EOD (End of Day) vs Day Trading

Not everyone has the time to day trade. For many traders, day trading means following a particular method that may present several trades in a given day–trades they might not want to miss for fear of missing out on the potentially profitable ones — they must keep an eye on the market movements throughout the trading day.

But what if you have a day job? Imagine how that might compromise your trading. Add to that, day trading can often be high stress; imagine how that might affect your performance at your (non-trading related) job. Besides, does trading more frequently translate into a greater chance for profits? In theory, yes. In practice, it’s doubtful. However, it does raise the probability of more missed trades and compromised performance (in your trading and day job). So why do it? Why not just trade EOD (end of day)?

More Time to Prepare, Possibly Fewer Missed Trades

Even traders who have the time to day trade at home can sometimes find themselves scrambling to take advantage of a trade. It’s worse for those who are trying to multitask & catch trades while doing other work.

In contrast, by trading end of day prices, you might be able to spend more time broadly analyzing your market, planning your entry and exit points, calculating your risk-to-reward and appropriately building your position size. As far as the motions (of planning) are concerned, it’s like day trading, but much, much slower.

Fewer Opportunities for Trading and Work Distractions

Here’s the perfect storm: losing big on a bad trade and getting reprimanded or fired for trading while on the job. Some of us have experienced this, and it’s not pretty (that’s an understatement). The main point is that every one of us can understand the potential gravity of this situation.

Opportunity to Trade Larger Swings, Avoiding Market Noise

The smaller the movement, the more it can be associated with “market noise” rather than larger supply and demand factors. Why attempt to trade several one- or two-tick moves when you can prepare for a much larger market swing? By trading a larger time frame, you are likely viewing bigger swings or trends. These swing or trends can often move far beyond a mere tick or two.

The point here is that by anticipating and trading larger moves, you may seek larger profits in a manner that may be more deliberately planned than in a case wherein you are rapidly responding to short-term market fluctuations.

More Time to Analyze Your Charts From Various Angles

Some traders analyze charts with very few to no technical analysis indicators; other traders use a ton of them. Some traders view one chart at a time; others comparatively view multiple charts. And then there are traders who like to zoom-in and zoom-out of their focus, or take different perspectives on a market by switching, adding, and removing indicators.

By trading with end of day data, you actually have the time to slowly view a chart scenario from multiple angles. Since different indicators can often give differing, if not opposing, indications, having the time to deliberate and decide on a particular trading perspective and approach might be helpful. It may be much better than having to make a quick decision, wondering if you might have decided differently if you had the time.

Caveat: The End of Day Trading Approach May Require a Larger Amount of Trading Capital

If you seek larger market swings, you may need to set larger stop losses.* This means that such an approach might not work if you have a small trading account. But again, if you have a small trading account, you might want to ask yourself whether you truly have the right financial profile and experience to be trading futures. If not, don’t do it.

But if you do have the experience and capital to trade higher time frames, then ask yourself if attempting to catch short-term fluctuations several times a day is worth the risk, particularly if you have a day job. If it doesn’t make sense to you, then perhaps you might want to switch things up a bit.



Please be aware that the content of this blog is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.  There is a substantial risk of loss in trading futures, options and forex. Past performance is not necessarily indicative of future results.

*More information on Stop Losses: Be advised that there are instances in which stop losses may not trigger. In cases where the market is illiquid–either no buyers or no sellers–or in cases of electronic disruptions, stop losses can fail. And although stop losses can be considered a risk management (loss management) strategy, their function can never be completely guaranteed.