A Little Strategy: Leave Trade Open Over Weekend? Yes, BUT... | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

EA open position on demo, but not open position on real account. Any Comment 7 replies

Help - how to modify an EA to leave existing trades open 2 replies

How do u sleep in peace and leave ur trades open? 27 replies

Yes, it's sad but true.... 2 replies

keep open positions over the weekend? 3 replies

A Little Strategy: Leave Trade Open Over Weekend? Yes, BUT...

  • #1
  • First Post: Edited May 2, 2010 2:13am May 1, 2010 8:17pm | Edited May 2, 2010 2:13am
It's a topic of discussion you will find on just about any Forex forum. There are many that say leaving an open trade is against forex trading principles as if it were a "cardinal rule" or "taboo". I can understand why since most brokers are closed leaving the trader powerless to close their position, BUT (more on this later). First...

I don't know about you, but I do like to sleep well on the weekends SO to some extent I do agree with this 'principle'. However, not entirely. You will not find me leaving any large positions open over a weekend, however, I find leaving a small open position over the weekend can be beneficial. One of the most common errors traders make is closing out their position when achieving a small gain and not letting it go to the predetermined take profit. So leaving an open trade over a weekend may eliminate this itchy finger syndrome. The key is to not let a big weekend move against your position wipe out a big chunk of your account.

If you do trade the weekend, you have to assume that an open weekend position has the potential to move large against you. You always have to prepare and keep in mind when setting up a trade that it can move hundreds of pips (war, bailout news, assasinations, etc - hopefully in your favor). So the key is to play it small.

Alot of traders trade the closing of the weekend broker gap (or whatever you want to call it). So, if your weekend trade is negative you can use this gap strategy to at least get back your loss or more by adding lot size to make your usual open-market size trade. If the weekend trade was in your favor, now you have the possibility to "double up". That makes a great way to start the week without taking on alot of risk, in my opinion. Now a 'gap' isn't guaranteed to close, but historically has a high percentage of doing so.

So there you have it. This is how I see weekend trading. Please share your thoughts...

Good Luck.
  • #2
  • May 1, 2010 11:49pm May 1, 2010 11:49pm
you have to decide what kind of trade you have open....scalpers and day traders should close, stay with what you know...swing and position traders don't even blink, our stops are wider than almost any short term swing in the markets....same goes for big announcements like GDP or NFP....I don't even get up to watch them..........
  • #3
  • May 2, 2010 12:50am May 2, 2010 12:50am
Have you read/seen the One Night Stand rules for Forex?

It is a public system a guy has given away at his seminars for years. He says it has worked well because of the "human tendency to resist staying in currency markets over the week-ends." Joel Rensink took it for a couple year "spin" on his blog as well. (aka TheRealThing here at Forex Factory)

Definitely worth a look.
  • #4
  • May 2, 2010 1:54am May 2, 2010 1:54am
If you hold a position over the weekend every now and then...you may be OK. But if you do it on a regular basis...you will increase your chances of getting burned very badly. It only has to happen once to teach a trader a lesson. There was a substantial gap open in the currency market just a couple of weeks ago due to the Greek crisis...one of the largest I have ever seen. Even if it does gap in your favor.....there is the possibility that it will fill the gap and start going up/down (Check out the AUDUSD gap up two weeks ago).
  • #5
  • May 2, 2010 2:06am May 2, 2010 2:06am
Quoting Troikaone1
If you hold a position over the weekend every now and then...you may be OK. But if you do it on a regular basis...you will increase your chances of getting burned very badly. It only has to happen once to teach a trader a lesson. There was a substantial gap open in the currency market just a couple of weeks ago due to the Greek crisis...one of the largest I have ever seen. Even if it does gap in your favor.....there is the possibility that it will fill the gap and start going up/down (Check out the AUDUSD gap up two weeks ago).
You are correct. It could move against you and burn you badly. I suggested a very small play, like 1 lot only. That way the burn isn't too bad and worth the risk, especially if you play the gap close you can recover the loss. Anything can happen on a weekend that could shoot price off a few hundred pips, athough rare.

You have to be at your station when market reopens so you can close it out if positive. Then maybe place reverse trade to fill gap. If it opens in your favor with an average sized gap of about 20 pips you might now be starting the week at +40. If down, you could also increase what would be your normal gap trade size by the amount of the negative lotsize and recover that while making your normal gap amount.

Trading is all about risk & money management. In my opinion, this is not very risky and definitely worth trying. That's all I can say.
  • #6
  • May 2, 2010 12:40pm May 2, 2010 12:40pm
Quoting 2+2=4ex
You are correct. It could move against you and burn you badly. I suggested a very small play, like 1 lot only. That way the burn isn't too bad and worth the risk, especially if you play the gap close you can recover the loss. Anything can happen on a weekend that could shoot price off a few hundred pips, athough rare.

You have to be at your station when market reopens so you can close it out if positive. Then maybe place reverse trade to fill gap. If it opens in your favor with an average sized gap of about 20 pips you might now be starting the...
Like waves said, position and swing traders that have trades open for days, weeks, months maybe even years, don't bat an eyelid in keeping positions open over the weekend. It is part of their trading plan.

As a day trader, I would be wary, but as you stated if you are prepared to risk a position that is not in your control on a small sized amount, then it is your prerogative. Some people might even class it as gambling rather than trading due to the lack of control until Sunday when the market opens.

The other issue is your S/L. What happens if the price opens past your S/L. If the market gaps past your S/L, your broker will close at the first available price, so really what reason is there for taking a position in a market situation that you have zero control over with the possibility of a bigger loss than you bargained for!

Therefore, as a day trader/scalper I would be wary of leaving a position open over the weekend. You have from opening bell Sunday to closing bell Friday to make money. This is your time to shine! Why risk on the unknown where you might get lucky or get spanked
  • #7
  • May 2, 2010 8:54pm May 2, 2010 8:54pm
Quoting bbakker
Like waves said, position and swing traders that have trades open for days, weeks, months maybe even years, don't bat an eyelid in keeping positions open over the weekend. It is part of their trading plan.

As a day trader, I would be wary, but as you stated if you are prepared to risk a position that is not in your control on a small sized amount, then it is your prerogative. Some people might even class it as gambling rather than trading due to the lack of control until Sunday when the market opens.

The other issue is your S/L. What...
Exactly, for long term traders this doesn't apply. For those that trade on a day to day basis it is a good little strategy. It has been working for me. Like I said before, since there is zero control as you also pointed out, you need to trade a lotsize where a 100+ pip move doesn't hurt much. If it's in your favor it isn't much of a gain either, but it does make a nice little cherry on top to start the week. I find this strategy better than gambling because if you chose the wrong direction then you can reverse trade and recover on a gap close, which isn't a guarantee but has a high tendency of doing so. So, to me the risk is definitely worth going for the reward. That's all.
  • #8
  • May 3, 2010 6:31pm May 3, 2010 6:31pm
...
  • #9
  • May 3, 2010 6:42pm May 3, 2010 6:42pm
Quoting 2+2=4ex
Exactly, for long term traders this doesn't apply. For those that trade on a day to day basis it is a good little strategy. It has been working for me. Like I said before, since there is zero control as you also pointed out, you need to trade a lotsize where a 100+ pip move doesn't hurt much. If it's in your favor it isn't much of a gain either, but it does make a nice little cherry on top to start the week. I find this strategy better than gambling because if you chose the wrong direction then you can reverse trade and recover on a gap close, which...
If it works for you and it is profitable then there is nothing wrong with that.
  • #10
  • Last Post: May 3, 2010 8:48pm May 3, 2010 8:48pm
Quoting bbakker
If it works for you and it is profitable then there is nothing wrong with that.
Now you're talkin!
0 traders viewing now