On the night between April 2nd and 3rd, after the U.S. markets had closed, we witnessed a rare and sharp price gap that significantly impacted some of our intraweek strategies. While our predefined stop losses are set conservatively between 0.2% and 0.5%, this gap caused nearly a tenfold loss beyond our expectations.
This is a risk inherent to intraweek strategies — positions are held overnight, which opens them up to events outside of regular trading hours. While such large gaps are uncommon, they can happen, typically following major economic news or geopolitical surprises. The specific event leading to the gap on April 3rd may have been unpredictable, but it serves as a sobering reminder of the hidden risks in overnight exposure.
In contrast, our intraday strategies, which always close all positions by the end of the trading day, are inherently protected from this type of volatility. These strategies avoid overnight gaps entirely and are often preferred for traders seeking tighter control over risk exposure.
Still, intraweek strategies have their edge. They are designed to capitalize on trends that begin one day and continue into the next — a common pattern in trending markets. To mitigate risk, we make it a rule to close all positions before the weekend, as weekend gaps are a well-known and more frequent phenomenon due to extended market closures and potential for significant news developments.
This recent event highlights the importance of constant risk evaluation and reminds us that no system is immune to rare market anomalies. But with thoughtful strategy design and disciplined risk management, even these anomalies can be absorbed without long-term harm to performance.
Stay cautious, stay informed — and always be ready for the unexpected.
