To hold or not to hold trade during week-end? | Forex Factory

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To hold or not to hold trade during week-end?

  • #1
  • First Post: Dec 16, 2006 7:17am Dec 16, 2006 7:17am
I am programming my own trend following trading system. It does'nt take to many trade as it takes a position and then hold it untill reversal.... Like once or twice a week no more.. But i really wonder. Should i make the system so that it holds the trade during the weekend or should i get rid of it every friday before makert close and the re-open on the monday in the same direction if trend unchanged?
What do you guys thinks? I need serious advice!
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #2
  • Dec 16, 2006 11:33am Dec 16, 2006 11:33am
I would say it depends on whether or not you can afford to lose the money if the market has a major gap over the weekend.

If you can, then leave your positions open.

If you can't, then close them to be safe, and re-open them again on Monday if conditions are right.

Quoting GreatYves
I am programming my own trend following trading system. It does'nt take to many trade as it takes a position and then hold it untill reversal.... Like once or twice a week no more.. But i really wonder. Should i make the system so that it holds the trade during the weekend or should i get rid of it every friday before makert close and the re-open on the monday in the same direction if trend unchanged?
What do you guys thinks? I need serious advice!
  • #3
  • Dec 17, 2006 9:20am Dec 17, 2006 9:20am
So far i close all on friday 15:56 pm and re-open uon sunday 20:02 PM EST. It cost spread. On the other hand, it have a coudpounding effect that might be much more profitable. Regarding the leverage, and risk involved, amount of pair traded, all have incidence on the decision of leaving a trade open or not during a weekend...

So it comes down to a personnal decision everybody must take on their own.. Happy trending..


Quoting In2Blues
I would say it depends on whether or not you can afford to lose the money if the market has a major gap over the weekend.

If you can, then leave your positions open.

If you can't, then close them to be safe, and re-open them again on Monday if conditions are right.
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #4
  • Dec 17, 2006 9:22am Dec 17, 2006 9:22am
Last week-end big gap i saw was in the trend way.


Quoting In2Blues
I would say it depends on whether or not you can afford to lose the money if the market has a major gap over the weekend.

If you can, then leave your positions open.

If you can't, then close them to be safe, and re-open them again on Monday if conditions are right.
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #5
  • Dec 22, 2006 3:39am Dec 22, 2006 3:39am
Quoting GreatYves
Last week-end big gap i saw was in the trend way.
That's the other side of closing open positions before the week end Buying or Shorting at a higher or lower price due to the gap when the gap occurs in the direction of the trend...


Thanks,

Nader
  • #6
  • May 14, 2007 9:49am May 14, 2007 9:49am
if it is about trading a trend, why would a trend suddenly take another direction on weekend when there is no news and all? (well atleast ussualy it does )
  • #7
  • May 14, 2007 10:21am May 14, 2007 10:21am
Interesting discussion. Gwan raises a good point.

What does the term "trend following" mean in the context of your method? Is it a matter of price movement over a period of hours, days, or weeks? To some you may be a position trader, to others a scalper. If you define it more clearly, the feedback may be more useful.

You can perform some simple calculations to gage the results your trades may have achieved had you held them. I can't tell you what to do, but if you are on the right side of the market, stay there until the price tells you otherwise.
  • #8
  • May 14, 2007 10:32am May 14, 2007 10:32am
When there's no more nuclear bombs in the world,
When there's no more terrorists on the planet,
When the Earth's crust and plate tectonics stop moving,
When all volcanos in the planet are extint...

In that day I will no longer close my forex positions on Friday afternoon and I will also stop using Stop Losses in every trade.

Until then...
  • #9
  • May 14, 2007 10:40am May 14, 2007 10:40am
My advice would again be if you can afford the loss. I myself use stops dilligently and trade mainly FX. I once left a position open over a friday night and the market moved dramatically overnight. My stop was triggered about 150 pips from where it should have been and I lost at least a quarter of my account.

The draw down in my account had I been stopped at the point I placed my stop was 5% or less.

Since then I would never hold over the weekend.

I also asked my broker where I would have been filled if I had been long and my stop was my target. They said I would have been filled at the stop price and not the market price (I use a spread bet company). Therefore the risk reward isn't even balanced if you set close out orders to.
  • #10
  • May 14, 2007 10:50am May 14, 2007 10:50am
Quoting lugopt
When there's no more nuclear bombs in the world,
When there's no more terrorists on the planet,
When the Earth's crust and plate tectonics stop moving,
When all volcanos in the planet are extint...

In that day I will no longer close my forex positions on Friday afternoon and I will also stop using Stop Losses in every trade.

Until then...
I understand the reality of "event risk." Do you go into every weekend flat in every asset class in which you trade?
  • #11
  • May 14, 2007 10:57am May 14, 2007 10:57am
Gaps over the weekend are usually not that big when viewed on a daily chart (typically 10-20 pips). Plus, when they do gap, most of the time the price retraces to close the gap by the end of the day, and if it doesn't retrace, it continues with the trend. The biggest gaps I've seen are around 100 pips, and I have yet to see a gap cause a complete reversal of the daily trend.

When you're trading the longer time frames, such as once or twice a week, these gaps don't matter, but if you're trading intraday, they can be huge... however, I don't see many intraday traders carry trades overnight on any day, unless they screwed something up (there was a joke amongst futures traders that a position trader is a day trader who failed during the day and carried his trade overnight, hoping for the market to turn in his favor).
  • #12
  • May 14, 2007 11:28am May 14, 2007 11:28am
There are many ways to lose money - and here's my opinion/suggestion.

If you do a backtest, so why don't you look especially at the gaps between friday's close and monday's opening? Measure how big they were.
Also consider that gaps are closed very fast in forex market. You should look at the direction of your trade!
I also would measure the average gap and decide at the end of friday: Do I have enough pips to go through this or shall I leave the market?

Last, not least: How many times did you have a chance to re-enter at the same level you left the market on friday?

I know, much work, but I think you should take the time - it is dangerous to stay in the market without the option to react...

Greetings
Freewheelin
42
  • #13
  • May 14, 2007 11:57am May 14, 2007 11:57am
I'm going to echo some of bluebuddha's comments here. I think this totally depends on the timeframe in which you are trading. If you are doing traditional "day trading" - trading on timeframes of minutes or hours - then I think it's very unwise to hold your position through the weekend. The factors that went into your minute-based or hour-based trading decision before the weekend will almost certainly be negated by the time the new session opens next week. I'm not saying that you'll necessarily lose money if you hold the position into the next week, but you're essentially trading blind because the triggers that you used to open your daytrading position on Friday will no longer be valid on Sunday night.

But if you're trading longer time frames - (maybe 4-hours), days, weeks, etc. - then I don't know that you should really be afraid of the weekend gap. Let's say that you're trading on daily candles/bars, then you are actually looking for moves of 100+ pips and your SL is probably set at least 50 pips below the open, probably more.

If you're trading longer timeframes, then to me the question to ask yourself on Friday is this: "Why did I get into this trade in the first place?" Have those factors reversed themselves? Is there some sign indicating that you should close the trade? Are you seeing anything that would normally qualify as a closing signal? If not, then hold it until the next week.
  • #14
  • May 22, 2007 10:08pm May 22, 2007 10:08pm
I tend to close out my short term trades and leave my longer term trades.
Normally my longer term trades are of a smaller size and I'll relax my stop over the weekend. My broker never executes my stop (in a gap situation) until the worst possible price anyway. Then, almost without fail, the price returns to fill the gap and I'd have been better off with no stop at all.
But if I loosen up my stop and hold the trade, I want to be at my trading platform when the market opens Sunday night--just in case there is a gap and price continues in the wrong direction.
  • #15
  • May 25, 2007 6:42am May 25, 2007 6:42am
Thanks guys, this threads is getting interesting, Yes i'm trading H4 looking at Daily for trend direction.. So it makes me a Swing trader not yet a Position trader. My method have evolve as i am using more conservative TP or some candle price action in order to close trade, some time i close it after 25 pips profit only, depend on market volatility. Right now Cable daily range is all time quiet, so as i was previously said there is no one good way to do, go with one method and stick with it. iI think i did close all trades on friday for the last 3 months... Today too.
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #16
  • May 25, 2007 7:01am May 25, 2007 7:01am
I trade both interday and off the day chart. If I took the trade off the day chart, I will hold over the weekend. If it was any lower than that I will usually close.

Trust your signals, but realize things happen. It was a Saturday when the US caught Saddam, the market opened on Sunday off over 100 pips. Random fundamentals.

If your really paranoid, you can always trade with a 24/7 broker like Oanda.
The basis of a democratic state is liberty. ~ Aristotle
  • #17
  • May 25, 2007 4:29pm May 25, 2007 4:29pm
Quoting bluebuddha
Gaps over the weekend are usually not that big when viewed on a daily chart (typically 10-20 pips). Plus, when they do gap, most of the time the price retraces to close the gap by the end of the day, and if it doesn't retrace, it continues with the trend. The biggest gaps I've seen are around 100 pips, and I have yet to see a gap cause a complete reversal of the daily trend.

When you're trading the longer time frames, such as once or twice a week, these gaps don't matter, but if you're trading intraday, they can be huge... however, I don't see many intraday traders carry trades overnight on any day, unless they screwed something up (there was a joke amongst futures traders that a position trader is a day trader who failed during the day and carried his trade overnight, hoping for the market to turn in his favor).
Summed it up rather well, with some good humor too boot. I would just add it depends if I thought the gap might be against me I might exit for a better entry. Or if the interest fee would be greater then the pip spread re-entry I might again exit. If I thought neither of those would occur, I would stick with the trade. I've found fair percentage of gaps are in favor of the 1-5 min stochastic or Macd move.
  • #18
  • May 26, 2007 12:43am May 26, 2007 12:43am
  •  tesla
  • | Joined Oct 2006 | Status: Friendly Neighborhood Programmer | 533 Posts
Quoting GreatYves
I am programming my own trend following trading system. It does'nt take to many trade as it takes a position and then hold it untill reversal.... Like once or twice a week no more.. But i really wonder. Should i make the system so that it holds the trade during the weekend or should i get rid of it every friday before makert close and the re-open on the monday in the same direction if trend unchanged?
What do you guys thinks? I need serious advice!
If you are indeed programming your system (as opposed to simply defining the rules) then it should be fairly easy to identify the risk/reward of holding positions over the weekend. Run backtests with both rulesets to determine the effect that holding your positions has on profitability and drawdown. You'll be in a better position to make an informed decision at that point.
  • #19
  • May 28, 2007 5:32pm May 28, 2007 5:32pm
Quoting tesla
If you are indeed programming your system (as opposed to simply defining the rules) then it should be fairly easy to identify the risk/reward of holding positions over the weekend. Run backtests with both rulesets to determine the effect that holding your positions has on profitability and drawdown. You'll be in a better position to make an informed decision at that point.
No more programming. Nothing replace my inner astral double for hard decision making! I can say i'm trading daily chart only so i now prefer manual trading. And maybe i repeat myself here but i now think it is always preferable to close all trades on friday. The counpounding effect is better then risking a gap against you.
Harmonics and Pitchfork using korHarmonics from TradingArsenal
  • #20
  • May 28, 2007 5:40pm May 28, 2007 5:40pm
Quoting GreatYves
No more programming. Nothing replace my inner astral double for hard decision making! I can say i'm trading daily chart only so i now prefer manual trading. And maybe i repeat myself here but i now think it is always preferable to close all trades on friday. The counpounding effect is better then risking a gap against you.
On any of my trades that are triggered by a DayTrading System...
If I have not recieved an Exit by 1Hour before the Next Session Start, I force a Time Exit.
Unless Today is Friday, Then I Force a Time Exit @ 1:00 PM EST.
just how I do it.
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