Thursday, September 9, 2010

How I Handle Contract Rollover

Rollover day gives a lot of people headaches. Here is how I decide when to switch to the new contract. If I am keying off a 4 minute chart I wait until the new contract has more volume in the current 4 minute candle than the old contract - then I switch. Simple. I don't worry about which contract has more volume for the day. I want to know that what I am trading at the current moment is the most liquid.


Ilya B said...

But if ur a day trader, it plays no role?

TraderSmarts said...

It matters because as a day trader you need to know what contract to trade. I want to be trading the contract that is most liquid (has the most volume) Cheers!

TraderSmarts said...

Lately .. I've just been trading the "old" contract on Thursday and the new contract on Friday.

The volume (using above measurement system) of late has remained in the "old" contract deep into the U.S. cash session on Thursday rollover day.

So why bother adjusting to new #'s in the middle of the day Thursday?

I don't anymore! I believe there is an edge trading the old contract on rollover day and the new contract on Friday.