Overnight positions are trading positions that are not closed by the end of the traders trading day. They're then held open for trading to proceed the following day. Overnight positions expose the traders to risk from adverse movements happening when trading closes for the night.
There are benefits and drawbacks to holding an overnight position. In Forex trades, 5 PM, EST is considered the end of the trading day, although the market is technically open 24 hrs a day, 5 days a week since its global. Deciding whether to maintain an overnight position will involve many factors the trader will want to consider. As a trader, you have to consider the take risk as well as risk management, capital cost, leverage changes, and strategy into account when you're thinking of going through with an overnight position. The overall goal when keeping an overnight position is to attempt at increasing profit return on the trade by holding it or by minimizing the loss of a daytime trade.
Some traders believe that holding an overnight position is very beneficial to the trader, while other traders find it more useful and profitable to make trades right before the markets close. It really all boils down to what works for you as an individual trader, and what you are committed too, and what you’re comfortable with. If you do find you want to hold trades overnight, you should know that most traders often hop back on and sell their positions when the market opens. It's rare that an overnight position can transform a daytime loss into a profit. So, there's a risk when you keep a position open overnight because the market can dramatically change overnight due mostly to a huge news event coming out.
Apiary Fund reviews this kind of trading frequently, like its pros and cons. It is a good thing to branch out and try new things and see if something new to your strategy might tilt it in a better direction for your overall success, but you don’t want to completely throw yourself into a pack of wolves. The market can feel like a pack of wolves often at times, and you want to be prepared because the benefits can be so rewarding!! Happy trading!!