Weekend trading (weekend trading), what do you need to know

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Should I Hold Trades Over The Weekend?

More often than not, your trades are going to close out from either your stop loss or target being hit. However, there is the odd occasion where you will need to make a decision on whether you should exit a trade or hold onto it.

Holding a trade over the weekend is one of those difficult scenarios where you will have to make such a decision.

This question is one I receive quite a lot and in this post I am going to break down the process I go through.

Before we dive in, you need to know that there is no single answer – your judgement is going to be the key to unlocking the answer. Price action thrives from flexibility and it applies to this topic as well.

There are two distinct sets of questions that you should run through when tackling this problem. The questions make up a “State of the Trade” and a “State of the Mind” that you will need to assess.

State of the Trade

The first set of questions analyse the trade itself. I ask these first because if any of them are negative answers, I don’t need to figure out the “State of the Mind” questions. Efficiency is useful in trading – don’t make more work for yourself!

Ask yourself these questions:

  1. What kind of trader am I?
  2. What is the overall trend?
  3. Where is price in relation to my stop loss and target profit?
  4. Is there any big news over the weekend?

Let’s break each question down.

What Kind of Trader Are You?

The first question is a simple yet vital one.

If you are a scalper it’s a simple answer: you shouldn’t hold the trade. The forex market is 24/5 – you can’t exit your trade over the weekend so you have to hold the trade until the market re-opens.

Scalpers don’t stay in trades for very long so you definitely don’t want to hold over a weekend.

A similar question you can ask is “what time frame am I trading on?”. If you are on a lower time frame, you are less likely to hold your trade over the weekend for the same reasons.

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If, however, you are trading on the daily, weekly, or monthly, your answer to holding the trade is one step closer toward being a yes.

Now, that doesn’t mean if you are trading on higher time frames that you blindly hold trades over the weekend. There are more questions to ask.

What is the Overall Trend?

Ask yourself what the overall trend is for the pair you are trading.

This is extremely relevant because if you are going against the trend you are taking on more risk.

Due to the forex market being 24/5, it creates gaps in price when the market opens again. Often enough this gap will be in favour of the trend.

Obviously this is not guaranteed but in regards to managing your risk, it is an important consideration.

You are opening yourself up to more risk by holding a trade over the weekend that goes against the overall trend.

Context is important though. So I often find myself asking that question alongside the next one…

Where is price in relation to my Stop Loss and my Target?

If you are already in the negative with your trade it is best to not hold it over the weekend. Cut your losses and move onto the next trade!

Now, if price is close to your target you should also look to close the trade. One of the key lessons I try to teach is to not let greed manage your trades.

Don’t be greedy – it will lose you money!

The sweet spot with these questions is your judgement of the trade and the state it is in.

If price has been consistently moving toward your target and is with the trend, you can look to hold it over the weekend. Your risk of price going against you is reduced in this scenario.

Practice makes perfect with this stuff though – each trade will have different factors that influence your decision.

One of those will be news.

Is There Big News Over the Weekend?

If there is a big news event over the weekend, you shouldn’t hold a trade through it. This is more common sense than anything else.

Any big news events are something you should be aware of trading through. Combine that with a weekend and you can get yourself into a tricky situation.

You can’t exit a trade over the weekend so you are locked in until the market re-opens.

So it’s important you check for any big news that could impact price

All of these questions together give you an idea of the State of the Trade that will help you make the best informed decision that you can.

Your judgement as a trader will be pivotal when deciding to hold trades over the weekend. You will get better with practice so don’t be afraid to take these trades on a demo account.

Logging the data will be helpful! But wait – there are still a few more questions you need to ask yourself…

State of the Mind

Alright, so you have looked at the trade and analysed it thoroughly. You are close to deciding on whether you should hold the trade – let’s take a look at the last few questions you should ask.

These are all related to and affect your trading psychology. They are the last checks you make before you make a decision on holding a trade over the weekend.

  1. Have I got data to look back on in my trading journal?
  2. How does holding a trade over the weekend affect my trading psychology?
  3. Am I being greedy?

Do I Have Data in my Trading Journal?

The first question is crucial to your success with holding trades. Have you ever held a trade over the weekend and if you have, what do your previous results say?

Collecting and analysing your results is going to make you a more profitable trader because you’ll be making better informed decisions.

If you have never held a trade over a weekend, try it out on a demo account. You don’t need to lose money through trying out new things.

Collecting data in your journal will give you peace of mind and confidence when trying to decide on holding a trade.

You can still use your live account if you wish – just be certain to log the data so that you can check out your results when you come up against the same dilemma!

How Does Holding a Trade Affect My Psychology?

The second question is much more personal to yourself and your trading psychology.

If you find that you can’t stop thinking about your trade over the weekend, perhaps it is better you don’t hold your trades.

Peace of mind shouldn’t be undervalued in trading – it has a roll-on effect that can impact your future trades. If you are stressed by holding trades then you should practice first on a demo account.

If holding a trade impacts your psychology in a negative way then you simply shouldn’t hold it on a live account. Your trading psychology is something you need to dedicate time to improving. Just try a few holds on a demo account first if need be!

It isn’t necessary for you to lose money when trying out new things. Give yourself time to practice if you need it – there’s no rush!

Am I Being Greedy?

The last question is the most important.

I have spent a lot of my time teaching the importance of not letting greed dictate your trading. More often than not, it will cause you to lose trades and this is no exception.

If you are currently at a 3 RR and want to get to 4 RR, take a moment to ask yourself whether you are being greedy.

The weekend movement can completely wipe out profits. If you let your greed control your weekend trades you are playing a dangerous game.

You have to be critical of yourself because no one else can do it for you in trading.

But if you can truthfully say that you are not holding a trade for greedy reasons, you are in a great position!

So, that sums up the questions I ask when I look to hold trades over the weekend. Flexibility and judgement are going to play a big part in your decision making with this.

Each trade is going to be different, as well as the external influences such as news or speeches. I definitely encourage you all to try holding some trades over the weekend. Every trader is different – I don’t hold trades over weekend very often but a lot of my students do.

It’s worth practicing for a bit of time – you never know what you will succeed at if you never try!

Practice really does help with this area of trading. The earlier you start, the easier and more profitable you will make it for yourself in the long run!

Do Futures Trade on Weekends? (Weekend Trading)

As you may already know, futures are standardized contracts which trade on an exchange. Unlike the stock market, futures contracts trade almost round the clock during the week, so you may be wondering if they also trade on weekends.

Strictly speaking, futures do not trade on weekends, but due to differences in time zones, the Asian big markets (Sydney, Tokyo, Hong Kong, and others) open for a new week much earlier than the U.S. market. So, the global and US futures market starts trading on Sunday evening in the US.

There are many things you need to know about futures exchanges in the US and their trading hours. To learn more, keep reading.

Trading hours For the Biggest US Futures Exchanges

Do Futures Trade On Weekends?

With the availability of electronic trading platforms, such as the Globex platform, futures contracts are now traded globally. So once any exchange is open in any part of the world, futures can be traded.

The round-the-clock global market starts with Australian market — which opens around 5 p.m. Eastern time — and ends with the close of the U.S. markets at about 5 p.m. ET, by which time the Australian market has opened again for a new trading day. As a result, the futures market is open for 24 hours each day from Sunday to Friday.

However, there are slight differences in the trading hours of the various types of futures in the biggest futures exchanges in the US. Let’s look at some of the exchanges and their trading timetable.

Chicago Mercantile Exchange

This is the biggest futures exchange in the US, and they have their headquarters in Chicago. They have several product categories, including energy futures, agricultural product futures, equity index futures, foreign exchange futures, metals, interest rates, and even weather. Their trading hours are usually stated in Central time (CT). See examples below:

Metals

For metals, such as gold, silver, and copper contracts, trading starts from 5:00 p.m. CT (6:00 p.m. ET) on Sunday and closes at 4:00 p.m. CT (5:00 p.m. ET) on Friday. There is always a 60-minute break each day, starting from 4:00 p.m. CT (5:00 p.m. ET).

Agricultural products

Most of the contracts under this category start to trade by 7:00 p.m. CT (8:00 p.m. ET) and temporarily close by 7:45 a.m. CT. After about 15 minutes break, the normal U.S. trading day starts by 8:30 a.m. CT (9:30 a.m. ET) but closes early, at 1:20p.m. CT (2:20 p.m. ET).

Energy

In the energy category, trading begins at 5:00 p.m. CT (6:00 p.m. ET) on Sunday and closes at 4:00 p.m. CT (5:00 p.m. ET) on Friday. A 60-minute break from 4:00 p.m. CT (5:00 p.m. ET) to 5:00 p.m. CT (6:00 p.m. ET) each day is the only period without trading activities.

Equity indexes

Trading starts from 5:00 p.m. CT (6:00 p.m. ET) on Sunday and closes at 4:00 p.m. CT (5:00 p.m. ET) on Friday. Just like the energy futures, there’s a 60-minute break each day, starting from 4:00 p.m. CT (5:00 p.m. ET).

Intercontinental Exchange (ICE)

The ICE started with energy futures but has since expanded to include foreign exchange, interest rate, agriculture, equity, and metal futures. The exchange is usually open for 24 hours each day from 5:00 p.m. ET on Sunday to 6:00 p.m. ET on Friday except during the maintenance period, which normally starts from 6:05 p.m. ET every day.

Energy futures

WTI, Brent crude, and other energy contracts trade from 7:50 p.m. ET to 6:00 p.m. ET the next day. The period between 6:00 p.m. and 7:50 p.m. is for clearing and maintenance. The week opens on Sunday evening and closes on Friday evening.

Currency futures

Currency futures contracts trades from 8:00 p.m. ET to 5:00 p.m. ET the next day, starting from Sunday to Friday. Both the currency pairs and dollar index are traded.

Agriculture futures

For agricultural products, such as cocoa, cotton, and coffee futures, trading begins at 9:00 p.m. ET and closes at 2:30 p.m. ET the following day, from Sunday to Friday.

Equity index futures

A lot of global equity index contracts trade here, especially European equities. The market opens by 8:00 p.m. ET each day, starting from Sunday, and closes by 6:00 p.m. ET the next day. The market closes for the week by 6:00 p.m. on Friday.

Cboe Global Markets

Cboe Futures Exchange (CFX), the futures exchange section of the Cboe Global Markets, are well-known for their volatility index futures — VIX futures. In addition to the VIX, they also have S&P 500 variance futures, Treasury note volatility index futures, corporate bond index futures, and recently, AMERIBOR futures.

Most of these products trade from 8:30 a.m. to 3:15 p.m., Mondays to Fridays. This is the only period you can place a market order for the products. However, there are extended trading hours — 3:30 p.m. to 4:00 p.m. and 5:00 p.m. to 8:30 a.m. — when stop/limit orders are permitted.

NASDAQ

Nasdaq derivative markets list stock futures on more than 100 underlying shares. Trading is done electronically via the Nasdaq Futures (NFX) platform. The open session commences from 7:00 p.m. ET and closes at 6:00 p.m. ET the next trading day, from Sunday to Friday.

Holding Positions Over the Weekend

Even though the market is closed, traders can (and some do) leave their trades open over the weekend. But this can be very risky, especially for a trader whose trading style is not suited for this practice. What do I mean by this?

There are different styles of trading — scalping, day trading, swing trading, and long-term trading. While a swing trader may attempt it, a scalper or day trader has no business leaving a position open over the weekend. Keeping positions open over the weekend is better left for position traders (long-term trader) and, maybe, swing traders, because they trade on larger time frames and have bigger stop losses.

Even for a swing trader, it still could be dangerous because of the associated risks.

The Dangers of Keeping Positions over the Weekend

There are a few reasons not to keep positions over the weekend, and here are some of them:

Price gap: It is not uncommon for the market to open with a big gap from the previous close. Just one piece of news (even a rumor) is all it takes for the price to open on the next trading day with a wide gap, rendering your stop loss useless.

Stop loss hunting: Some brokers widen their spread when the market is about to close on Friday and again when the market opens on Sunday. If your stop loss is not far away enough, your position may be knocked off before the market even starts to move.

No rest of mind: When you have a position open over the weekend, and you’re not used to it (not a long-term trader), chances are that you will be worried about the trade, especially now that a single tweet can do a lot of damage.

Are There Securities That Trade Over the Weekend?

One of the biggest forex and CFD brokers, IG, offers weekend trading opportunities for some of their popular indices. These are the securities they offer for weekend trading:

  • Weekend FTSE 100
  • Weekend Germany 30
  • Weekend Hong Kong HS50
  • Weekend Wall Street
  • Bitcoin Cash

Another option is to look towards the Middle East where Saturday and Sunday are official working days, so their stock markets are usually open during the weekend. Securities like DFM Index (Dubai stock index) and Tadawul Index (Saudi Arabia stock index) can be traded during this time.

Furthermore, binary options also trade over the weekend.

Summary

Futures markets are closed during the weekend, but due to differences in time zones, Asian markets open when Americans are still enjoying their Sunday. Electronic trading has made it possible to access the market from anywhere. While the market is open from Sunday to Friday, there are slight differences in trading hours for the different categories of futures contracts.

Although the market is closed, some traders keep positions over the weekend. But there are risks involved. A piece of negative news can cause price gaps which can make you incur great losses.

If you enjoyed this article you might also like our other articles answering common questions traders have!

Trading Opportunities when Markets are Closed over Weekends

Make the Most of the Weekend to Improve Your Trading

One of the greatest aspects of the FX market is that it is a true 24-hour a day market ; however, this does not extend to weekends. While there are a handful of markets to trade during the weekend, forex traders are better off using this time to educate themselves, spend time researching and manual back-testing, as well as, strategizing for the week ahead.

This article covers the following:

  • Why trading is closed over the weekend
  • Weekend trading opportunities
  • What DailyFX traders do at the weekend
  • Further reading to improve your forex trading

Why is trading closed over the weekend?

Trading the forex market is closed on the weekends because institutional forex traders and large banks (the buyers and sellers of foreign exchange) operate during working hours in the week and take time off on weekends. Most jobs operate in this manner and the forex market is no different. However, just because the forex market is offline, it doesn’t mean you have to be. The weekend presents a great opportunity for traders to learn, reflect and plan for the upcoming trading week.

When preparing for the week ahead, it is essential for traders to know when each of the major trading sessions come online, as each session has its own characteristics that need to line up with your trading strategy.

Session Major Market Time (GMT)
US NEW YORK 13:00 – 22:00
ASIAN TOKYO 00:00 – 09:00
EUROPEAN LONDON 08:00 – 17:00

Weekend Trading Opportunities: Boost your Knowledge and Plan Your Trades

1) Explore free forex trading education

This is one of the more common ways to spend trading time over weekends when most FX brokers are closed for trading. While the markets may be closed, there is a wealth of online educational content that allows traders to access materials for weekend study.

DailyFX has a whole host of free educational material for all types of traders. Some of these include:

2) Make the Most of Your Trading Platform

Weekends are the ideal time to learn the ins and outs of a trading platform and find out how your chosen platform can assist your trading. A selection of advanced trading platforms allows traders to analyze a number of different strategies, applied to past data, for a better understanding of how these strategies would have played out. This process is called back-testing and is an excellent way of testing a strategy before employing it in live conditions.

The process of back-testing involves the selection of an earlier date and time on the chart (to a period in which you are unfamiliar with price action), ‘locking the view’ and analyzing the detailed report afterwards to gauge how well the strategy would have done.

Popular platforms with this capability include ProRealTime and MT4 charting packages. Below is an example of the back-test function on the advanced charting package, ProRealTime:

It must be mentioned that just because a strategy performed in a particular manner in the past, doesn’t mean that it will perform in that way in the future. The goal of back-testing is to simulate how a strategy would have played out and observe the variability of expected vs actual results of the strategy.

This is perfect to do when the market isn’t actually moving, allowing traders an environment to better manage the emotions of trading .

3) Strategize for the Week Ahead

One of the benefits of trading being closed is the fact that it allows traders to take a step back to evaluate the week that has just passed. This can be a phenomenal time to account for the week’s trading activities and update your trading journal .

Many traders following a trading plan may use this time to review, edit, and modify their plans based on recent observations. If you don’t yet have a trading plan, the weekend can be a great time to build one.

For traders that are already comfortable with their plan, they can look to the week ahead to focus their approach, given the expected economic data releases. The DailyFX economic calendar allows for traders to organize events based on release date, importance, and currency pair.

Example of the DailyFX Economic Calendar

The economic calendar is available 24/7, meaning traders can strategize for the week ahead even when the market is closed.

What do DailyFX Traders Do Over the Weekends?

Below are some top tips and advice from our analysts on how to be productive over the weekends:

“It’s important for traders to enjoy the weekend downtime, but it’s also important to carve out some of the quiet time for review of the prior week’s activity. Review your trade history; make notes on the good and the bad. Make sure your pending ideas are well formulated and trigger levels clearly in place in time for market open.”

“Weekends are key for FX traders, there are no prices moving and there’s no need to react. FOMO is at a minimum because there’s simply nothing to do, and this can be a good time to manually back-test or even just read a new book on a new concept, make some tweaks to the trading plan or plot the week ahead.”

“For the most part, weekends are time to step away from the charts and reset. Sunday evenings are a time for reflection and planning, studying price-action and coming up with a game-plan. I use this time to fine-tune my charts and consider the setups I want to actively track throughout the upcoming week; and have my levels and trade ideas planned out and ready to go.”

Further reading to Improve Your Forex Trading

  • It’s often easier to remain calm when prices aren’t ticking, however, active traders need this calm state of mind when the market is moving. Learn how to manage the emotions of trading .
  • One market that is open on the weekend is Bitcoin. However, Bitcoin has proven to be very volatile, so it’s essential for new traders to read the introduction to Bitcoin trading to understand the basics of the cryptocurrency.
  • Weekends are meant for research, so why not read through our Traits of Successful Traders research to find out the number one mistake traders make

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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