Ebene News – United States – Forex Trading in 2021 – Is there any weekend trading?

Forex is potentially one of the most attractive markets available to traders, as the market trades non-stop 24/7 from Monday morning open in Wellington, New -Zeeland until New York closes on Friday night

For some traders 24/5 trading is just not enough LMAX and IG Markets are just two brokers that offer weekend trading to clients who feel the need to hedge their positions even when the market is officially closed

The origin of weekend retailing is quite recent and is entirely due to the success of cryptocurrencies Cryptocurrencies are traded continuously 24/7 on all exchanges and many young people traders see a great advantage in this as they can also continue to deploy their trading models during the weekend

In fact, weekends are seen as a pivotal time for cryptocurrency traders A CNBC article reported various milestones released over the weekend:

The popularity of weekend cryptocurrency trading has prompted some brokers to offer weekend trading in Forex and other instruments to their clients As the global markets become more and more interconnected, it is essential to have efficient capital markets and we may see a shift to 24/7 trading in the years to come as “traditional asset classes” catch up with cryptocurrencies

Another reason why weekend trading might be desirable is the ability to act in the wake of significant and unforeseen geopolitical news or developments that would normally cause an open spread on Sunday night when the Forex market opens.

To sum up: the world is interconnected and money never sleeps So shouldn’t we be able to trade 24/7?

Before we talk about weekend trading, let’s review the official open and close times for different markets. Obviously, different markets have different market opening hours

Stocks and market indices as well as commodities have their own treasury session, that is, when the good old ‘trading pit’ was open The treasury session is when there is the deepest liquidity and most of the major players trade during these hours

For example, the New York Stock Exchange and NASDAQ market opening hours for common stocks are between 9:30 a.m. and 4 p.m. EST.There are also after-market trading hours (4 p.m. to 8 p.m. pm Mon-Fri), but there are generally higher trading costs and less favorable execution prices Likewise, the German Dax Treasury session is active from 9:00 a.m. to 5:30 p.m. Monday to Friday

Of course CME Globex offers 24 hour electronic trading from Sunday 6:00 p.m. EST to Friday 5:00 p.m. EST and so most CFD brokers display continuous price charts for most instruments.

Forex Trading Hours Are Different The Forex market is something between the stock market (with clearly defined treasury sessions and electronic trading sessions) and the crypto market which trades nonstop 24 hours a day and 7 days a week The Forex market is open 24 hours a day, but only from Sunday 5:00 p.m. EST (Wellington opening) until 5:00 p.m. EST Friday (New York City close) There are 4 defined money centers that cover the day. 24 hour Forex trading:

So, regarding Friday Forex trading hours, the market is effectively closed as of 5:00 PM that day in New York City

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The list could go on indefinitely The bottom line is that retail traders see the weekend as a more peaceful time to do their analysis and make trades because they can follow the markets properly

Some brokers offer weekend trades on a selected group of instruments – usually major indices like Dow Jones, S&P 500, Dax or major currency pairs like EUR / USD, USD / JPY and GBP / USD

So when is it useful to have access to indices or Forex pairs on the weekend? If you take into account that banks, hedge funds, and other major trading partners aren’t active on weekends, you must have a good reason for making a transaction.

Looking at the GBP / USD chart above you will probably understand: Although there is some trade going on this weekend, the range is tiny, with almost zero volatility and therefore zero profit potential.

If you factor in the wider spreads you pay on weekends, it makes sense that it makes less sense to trade the same way on weekends that you trade during the week

As such, you might want to consider negotiating over the weekend if there has been a big geopolitical event (President Biden says something influential; another group of ships get stuck in the Suez Canal; terrible earthquake hits Japan with probable tsunami; coronavirus mutation gets out of hand; etc)

In that case, there will likely be an open gap at the Wellington opening Monday morning (Sunday evening in most countries around the world) and entering the market before the opening could prove to be beneficial – if you understand the ramifications of the event Of course, if you are on the wrong side of the event, placing this trade could turn out to be a bad decision

Another way to use weekend liquidity would be to hedge an existing position For example, if you have a long USD / JPY position before the weekend and there is a surge in new instances of coronavirus in a G10 economy reported on a Saturday, you may want to sell the Dow Jones index to hedge your position

Weekend trading can also seem very appealing to traders who have a regular day job and cannot trade during the week. However, there are some pitfalls you should be aware of if you are trading on the weekend:

It is no coincidence that the biggest movements of Bitcoin usually occur over the weekend: there is less liquidity and therefore less money entering the market Under these conditions, it is necessary much smaller orders to “move” the market considerably

So on the one hand, many active traders see the weekend as a source of opportunity due to this increased volatility But on the other hand, for cryptocurrency traders in particular, an extra dose of caution is advised as low liquidity, coupled with unregulated trading, the absence of clear breakers or fundamental valuations means that prices can go up or down more than anyone can expect

As exciting as weekend trading may sound, the truth is that (for now) professional traders need the weekend to relax and recover Trading is a very demanding job, and traders Forex traders typically sit at their desks at 6.30am GMT each morning, put on their headphones, turn on their squawk, go up their Twitter feed, activate the charts and don’t let go until 7pm GMT

As such, the weekend is a time of relaxation and recovery, then preparation for the coming trading week. How?

I have yet to meet a professional trader who doesn’t look forward to the weekend They don’t spend the weekend trading Forex

Weekend trading is a novelty introduced by cryptocurrency traders, and traditional asset classes are still in catching-up mode – perhaps because habits are hard to change and most of financial markets are used to weekends

Due to low liquidity, higher transaction costs, and inferior range of instruments, weekend trading is currently difficult to justify on anything except Bitcoin or other cryptocurrencies. only if you have an open position exposed to an unforeseen major geopolitical event over the weekend that you should consider hedging your position on Saturday or Sunday

You should have more than enough trading opportunities during the week, regardless of the strategy you adopt. If you find it difficult to find the time to trade during normal market hours, trade on weekends. end is not the right solution The best solution is to adopt a trading style that suits you

For example, trading daily candlestick patterns or using a swing trading approach, where you are looking to hold trades for days or weeks Trading should fit into your day; it shouldn’t be your day that should revolve around your trading

The Forex market has official opening hours which range from 5:00 PM EST Sunday to 5:00 PM EST Friday As such, the Forex market is closed on weekends However, some brokers allow forex trading on weekends. end on some major pairs

The only type of trading that takes place 24/7 is cryptocurrency trading.So if you are an experienced trader who knows how to handle the extra volatility that frequently appears during cryptocurrency trading on weekends, take the plunge

Normally trading Forex on a Sunday is not a good idea as liquidity is low, spreads are wider (therefore transaction costs are higher) and volatility is generally very low However, there is cases where traders will be very active as soon as the market opens in Wellington: when there was some influential news this weekend

In these cases, the Forex market will likely be pushed aside at the open, and you can use a strategy like the Forex Gap trading strategy to get you into position on a Sunday.

Justin Paolini helps traders succeed through one-on-one coaching at BuildingaTradercom He is also Head of Trader Development at FCI Markets UK Justin has over 15 years of Forex trading experience, including 3 as a seller and broker Previously, he was an analyst at 3CAnalysiscom, producing institutional grade directional calls His market commentary was posted on FXRenewcom, Yahoo! Finanza, Trend Online, FX Street, OrderFlowtradingcom and ForexTellcom Over the past 8 years he has been dedicated to helping others succeed and has been a guest lecturer at the University of Ancona on Trade and Market Dynamics

Justin holds a BUNE in & Finance economics from UNIVPM, Ancona, and a Masters in Finance, Banque & Assurances

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Ebene News – United States – Forex trading in 2021 – Is there weekend trading?

Source: https://www.dailyforex.com/forex-articles/2021/05/fact-and-fad-about-weekend-forex-trading/161891