Day trading on weekends is a growing area of finance. Forex weekend trading hours extend well beyond the traditional work week. Without a central market, currency rates can be traded when any global market is operating – be it London, New York, Hong Kong or Sydney. For the same reason, Bitcoin and other cryptos, can also be traded on weekends. Some brokerages now also offer weekend trading on the index as growth in half-time trading continues. Here we detail some markets for weekend trading, strategy options and some benefits and risks to consider.
Can You Trade On Weekends?
There is a popular misconception that you cannot trade on weekends. Perhaps this is because, flexibly, many in the financial world want precious Saturdays and Sundays. Nasdaq weekend trading, and trading in India, plus the United States stock exchange, all cards from 16:00 on Friday, until 9:30 on Monday morning.
However, technology has become a catalyst for globalization and not everyone in the world works on the same schedule. Middle Eastern trading hours, for example, work Sunday through Thursday, and in some places, Saturday through Wednesday.
So, the answer is yes, you can definitely start trading online in a weekend. In fact, weekend trading in binary options, currencies, stocks, CFDs, and futures is booming.
Among the most popular indices available over the weekend are:
- DFM Index – This index is based on the Dubai stock exchange, which is one of the main exchanges in the United Arab Emirates.
- Kuwait Stock Exchange – This is the national stock exchange in Kuwait and includes the largest companies, banks, insurance companies, and real estate.
- Tadawul Index – This is the only stock exchange located in Saudi Arabia.
- Tel Aviv 25 Index – This consists of the top 25 companies by market capitalization on the Tel Aviv Exchange, Israel.
In addition, some brokers now also offer weekend trading on European and US indices including the FTSE, DAX and even Wall Street. Always make sure you read the weekend trading terms, especially if using a stop loss. On IG for example, a stop loss setup during the week will not be triggered on the weekend. At the same time, trades made on the weekend can be left open during the official opening hours of the market. These conditions can play an important role in your strategy, so make sure you understand them. As more brokers begin to offer weekend trading, the differences between how they operate will grow.
Why Trade On Weekends?
So while there are weekend trading markets available, it’s an entirely different question whether you should get involved. Here are some reasons why you might want to:
- Friendly strategies – While some strategies will make handsome profits in high volume weeks, others will do better on weekends. Open Asian markets, for example, behave differently from many western markets. This plays into the role of certain traders with strategies that are more suitable for different market conditions.
- More trades = more profit – Although this is not always the case, in general, the more time you spend trading the greater the chance you should turn a profit. If it’s a choice between working from home and earning an income, many will choose the latter.
- Flexibility – For some people, intra-week trading simply isn’t an option. Weekends are ideal for those with busy schedules and intra-week commitments. You have the freedom to choose the hours that suit you.
- Focus – If your week is busy, the weekend may come with fewer distractions. This can translate into higher concentration and improved trading results.
Restrictions On Weekend Trading
Despite many weekend day trading offers, there are some limitations. The most problematic ones are listed below.
- Limited instruments – There are fewer assets available on weekends. If you want to trade using the news and with instruments you have a good understanding of, you may have a problem. For example, Nokia, Ford Motors, and Twitter are all traded on the New York Stock Exchange and no longer on weekends. However, those who trade with price movements using technical analysis can still return profits.
- Low trading volume – Forex weekend trading hours stretch on Saturday and Sunday. When London closes up shop, Hong Kong is still going strong. The gold and oil markets trade at the end of the week very similarly. The problem is, at some point the trading volume will be very low. This causes the market to flat and the charts are not helpful.
- Time zone – This limitation is quite obvious. Your body clock may not look right on the weekend. As stock exchanges in the Middle East, for example, operate at less friendly times if you are based in the UK or the USA. If you don’t want to wake up in the middle of the night, you might want to think twice.
- Broker hours – Many brokerage firms take the view that there aren’t enough clients to warrant opening their doors on weekends. This means you need to check your broker’s trading times. If they’re not open, you’ll have to go somewhere else. 24option, Metatrader, Scottrade, Etrade, and FXCM all offer weekend trading platforms, as do IG and Nadex.
- Dangers of volatility – While volatility also promises traders plenty of opportunities to turn profits, it also comes with risks. Because normal market participants are inactive, there is often a large difference between the bid and ask prices of a stock. This led to few traders surviving.
Do Trading Strategies Have a Weekend Effect?
Yes, they do. As a result of large market participants spending their profits over the weekend, the market on Saturday and Sunday can behave in a special way. You will find increased volatility and varying amounts.
This means that you need to amend your strategy in line with the new market conditions. Alternatively, you may want a unique weekend trading strategy.
Below some strategies have been outlined which are carefully designed for weekend trading.
Gap Closing – Gap Trading Strategy
Market conditions are perfect for forex trading strategies and options strategies this weekend. The gap just jumps the price. At some point, something moves the market, causing prices to jump to higher or lower levels, while excluding prices in between.
First, what causes the gap? A number of things can be the cause, from new movements to accelerated movements. One thing they need even in large numbers. Because the weekend saw the big players out of the game, you’ll struggle to find this gap. Instead, you will find a closing gap.
Closing gaps can be made by just a few traders. For whatever reason, several people invest in the same direction. The market then spiked and everyone was left scratching their heads. So, what do they do? They think it must be a mistake and trade in the opposite direction, looking to profit from the mistake.
- Gap up – Traders will sell their assets. The market will fall and the gap will close.
- Gap to the bottom – The trader will buy the asset. The market will then rise and the gap will close.
If you see gaps in low volume markets like over the weekend, there is a good chance they will close.
Application
Because you know the gap will close you have all the information needed to make a profit. You know:
- Price target – The market will move up until the price reaches the level of the first candlestick that forms a gap. With a gap down, it should rise to the low of your previous candlestick. With the gap up, it should fall to the high of your initial candle.
- Expiration – You know the market should reach the target price in the next period. So, you can trade high/low options. In addition, you can trade with one touch options, which can give you bigger payouts. Make sure you invest in options with price targets in the gap and expirations shorter than one period.
This strategy is simple and can be used for currencies and commodities. All you need is your weekend trading chart and you’re good to go. You can also pursue weekend gap trades with expert advisors (EAs).
Bollinger Bands
This is an effective strategy to add to your weekend arsenal. Bollinger Bands highlight price channels that the market cannot abandon. You will find that on weekends this price channel can be very accurate. This makes it an ideal base for your weekend strategy.
The band consists of three lines:
- Top row – Moving average plus twice the standard deviation. This works as a match.
- Lower row – Moving average minus two standard deviations. This works as a support.
- Middle line – 20-period moving average. This can be either support or resistance, depending on whether the market is trading above or below it.
Overall, you will find that the market will change as it approaches your Bollinger Bands.
Weekend use
The band often produces the best results on weekends. This is because in the week’s news events and big traders can start new movements, then the trading range is even more. When the standard deviation changes, so do upper and lower Bollinger Bands. A strong movement will stretch the band and bring the border on the trend. This can make predictions useless.
However, reduced volume over the weekend made the market more stable. It’s unlikely that many traders will jump on the bandwagon and disrupt the status quo.
Application
You need to follow three steps to implement your new strategy.
- Build your chart – Decide on an instrument and then build your price chart with your Bollinger Bands.
- Be patient – Now you can sit back and wait for the market to approach your band. You need to be patient until the market gets one of the three Bollinger Band lines.
- Make your prediction – Now is the time to enter your position that the market will change. For example, you can use a high/low option that predicts the market will not break the Bollinger bands.
Since it is very easy to apply, it is suitable for both experienced traders and beginners.
Alternative
If you don’t want to spend your weekend trading bitcoins or on the stock market, there are other ways you can be productive. This weekend is an opportunity to analyze past performance and prepare for next week.
Here are some worthwhile ventures to explore over the weekend.
Education
As Paul Tudor Jones said, “The secret to success from a trading perspective is to have an inexorable prowess and shame for information and knowledge.” Although practice makes perfect, you need to absorb as much information as possible. Therefore, consider spending a weekend following the following:
- Courses – There are many online courses that will help you get to grips with complex strategies, taught by veteran traders.
- Books – You will find a variety of books and ebooks that provide invaluable advice and guidance. If you’re looking for the top part, check out our book page.
- Podcasts – If you’re busy on the weekends, or have a long drive to the law, why not put on a podcast? You’ll find custom audio casts written and recorded by experts. Just one handy tip can make the difference between a financial strategy and a profitable one.
Manual Backtesting
There is no better way to predict how the market will act in the future than by looking at the past. You can use lazy Sunday hours to simulate past market environments to test potential strategies.
Although it must be said that past performance does not guarantee future performance, it can be a strong indicator. Not to mention you can close any gaps until your plan is ready when you head the line at 09.30am on a Monday morning.
Assessment
When the market is open, you can often get caught up in a whirlwind of emotions and trading activity. Weekends are great for giving you a chance to take a step back. You can look back and highlight any mistakes.
This will help you implement a more effective trading plan next week. Perhaps you may need to adjust your risk management strategy. Maybe it’s time to try a different escape strategy this week. So, if you are not interested in weekend stock trading, sit down and identify areas for improvement.
Planning
This weekend also gives you the opportunity to investigate any events that will impact your market. The DailyFX Economic Calendar, for example, allows you to identify important economic dates, such as policy renewals. You can then tweak your action plan to account for future events that will affect market conditions.
Final Word
To switch on the weekend day trader is another opportunity to make a profit. Although some of the big traders are out of town, you can find fluctuations in markets around the world to take advantage of. Although many brokers and exchanges are close, there is always some activity quickly, especially in the Middle East. If you want to trade, don’t forget to modify your strategy according to different market conditions. Alternatively, choose one of the weekend-specific strategies above.
If you want to take a break from the hustle and bustle of real trading, you can still prepare for next week. You can use any of the educational resources listed above, or you can start retesting and strategizing for Monday.