Coming into the weekend is “decision time” for forex traders. As most would scramble into decisions before the markets close, while some would even consider starting their trades as early as Sundays. Considering price gaps, when to hold on a trade and other mitigating factors, you may one to consider the following:
Forex Market Hours
The Forex trading in Poland market is open 24 hours a day during weekdays; however, they are closed during the weekends. However, the weekend gets squeezed based on time zone changes and enables execution of trades based on certain conditions. The forex currency market is made up of hedge funds, banks, investment firms, investors or brokers and since it operates in different time zones
International currency markets consist of banks, commercial companies, central banks, investment management firms, hedge funds, as well as retail forex brokers and investors around the world. Because this market operates in multiple time zones, Forex trading is opened based on the participating country’s time and may overlap.
Check on price gaps
During the weekend, the Forex trading in Poland market does not reopen until 5:00pm Sunday EST. This is where price gaps happen, as there would be a significant change in bid prices compared to closing prices last Friday. This either can be a profit for your end or may totally work against you. Gaps happen regularly for currency pairs during Sunday night.
Sunday rest day
Since there is not a lot of economic activity on weekends, it is highly unlikely that the forex market will change into new conditions. Therefore, it is not advisable to start trading during Sunday based on the lack of activity in the forex market. Some well-experienced traders would read up on the news online that may or may not affect the economy. Weekends can be an opportunity to study macro-data on hand to determine possible trends that may occur during the coming week.
Look out for Friday!
Popular currency pairs usually overlap between the European and Asian sessions on Friday. In general, trading and good trading conditions usually occur during the first half of Friday as the volatility in the market would be sustained up to this day. However, the second half of Friday would cause drops in volume given the weekend close approaches
Holding through the weekend
Another tricky decision, especially for beginners is to determine when to hold or close a trade. Although there are many factors to consider, you may consider analyzing your daily chart. If the current price is close to the stop loss, you may want to consider closing before the weekend. Safe to say, if you wished to hold, you would have probably been stopped out.
Another aspect to consider in holding trades is by considering your strategies with the trade and creating rules based on your trading plan on how to handle a certain position when going into the weekend. Never hold a trade for the sake of holding it through the weekend as this might end up ineffective.