Weekend trading with binary options allows traders to trade seven days a week. With forex market trading hours covering around the clock for 6 days a week, and certain markets and indices open on Saturdays and Sundays – there are plenty of opportunities. This article explains the details of weekend trading and how you can succeed in online trading on weekends.
This article explores:
- Trading On Weekends – Advantages And Disadvantages
- Why Trade On Weekends – Markets And Assets Available
- Weekend Strategies – Specific Strategies And Top 3 Tips
With this information, you will be successful at weekend trading with binary options.
Trading On Weekends
While most of the market is asleep on Saturday morning, some are bright and early to start the weekend trading. From forex and futures to stocks and cryptocurrencies, many simply sleep and drink their way through two days of potential profit. Therefore, this page will examine both the pros and cons of day trading on the weekend, before covering strategies, trading hours, and top tips.
Benefits
First, why should you trade a casual day for online trading on the weekend? Maybe for any of the following reasons:
- Profit potential – You have two extra days to trade over the weekend. That’s two extra days to generate more income. If you didn’t have such a good week, the weekend gives you a chance to improve your account balance.
- Time – Trading on the weekend allows you to trade multiple currency pairs, for example, and still have plenty of time to evaluate each trade. Moreover, you don’t have to make hasty decisions, whereas during the week you might try to enter and exit the market at a certain price point.
- Strategy – On weekends when the market is on pause, you have time to develop a more complex trading strategy. In addition, some trading plans will work better on weekends. For example, Asian markets often behave differently to Western markets on Saturdays and Sundays. As a result, certain strategies can produce greater profits this weekend vs. the week.
- Undivided attention – Inexplicably, many people work throughout the week. Therefore, finding time to concentrate on trading can also be a challenge. This is the reason why weekend trading gives you a great opportunity to focus solely on your trading activities. In addition, less distraction can result in improved trading results.
- Preparation – Weekend trading can be more than just entering and exiting positions. While most of the market takes a breather, you can conduct in-depth technical analysis. As a result, you can hone your strategy and be better prepared by the time the opening bell rings on Monday morning.
Weakness
While there are many benefits, there are also certain disadvantages to day trading on weekends:
- Reduced options – There are fewer instruments available to trade on weekends. Many stocks, in particular, will not be available. However, forex trading is easy to find because the market runs 24/7.
- Get used to the weekend – There’s also the danger of carrying your weekend bias with you into Monday. For example, you may have planned your trading plan or are desperate to make a loss. If you are not careful, this can make Monday unfavorable.
- Reduced trading volume – Although forex, oil and gold trading is still available over the weekend, low trading volume can cause problems, such as a reduced ability to validate price movements. Also, a lack of volume can cause the market to be flat and the chart unhelpful.
- Restricted brokers – Many brokers do not offer trading on weekends. They feel there is simply not the amount or interest to make it worth a moment. Therefore, if you are committed to a particular broker, you may not be able to trade unless you go elsewhere. Fortunately, IQ Option , 24option, eToro, FXCM, and Nadex all facilitate weekend day trading.
- Trading hours – Weekend day trading may not suit your body clock. For example, Middle Eastern markets are often active on weekends. This means that if you are based in the West, you may need to be prepared to trade during anti-social hours.
- Liquidity – Without a money manager to take the rest of the trade, the market is often less liquid. Reduced liquidity can lead to increased volatility. The result is a wider spread between the bid and ask. This can make generating profits more challenging. Having said that, high levels of volatility can also mean enhanced profit potential.
End of Town Broker
Stocks and Trading Indices
Many of the traditional instruments and markets you trade during the week will be off the cards at the weekend. For example, NASDAQ and other US stock exchanges are closed from Friday 16:00 to Monday 09:30. However, the Middle East has working days from Sunday to Thursday and Saturday to Wednesday.
In addition, brokers and platforms in the currency and CFD markets offer seven weeks of daily trading and various local stocks and indices. Some of the indices that will provide the most volume for day trading over the weekend are:
- Tadawul Index – Index Saudi Arabia is the largest economy in the region. As a result, this is the most popular index available among brokers that offer weekend trading.
- Tel Aviv 25 – Also known as TA25, it is made up of the 25 largest Israeli companies. Those interested in IT and pharmaceutical industries may be suitable.
- DFM Index – Some of the most important players in the United Arab Emirates can be found here.
- Kuwait Stock Exchange – Kuwait’s economy is different. Therefore, this stock exchange hosts companies from the financial, insurance, and real estate sectors.
Now that Saudi Arabia has moved the day job to coordinate with its neighbors, foreign traders now have better access than before. As they continue to move towards full access, liquidity will increase and weekend traders will benefit from greater profit potential.
The growth of traders who operate on weekends has never been noticed by brokers. Some now offer trading in traditionally closed markets. IG for example, now offers access to the FTSE and DAX indices, as well as Wall Street, on weekends. The rules around stop losses and so on change a bit (weekday trading is not affected by anything happening on the weekend for example). This move reflects the increasing volume of business over the weekend – driven in large part, by Cryptocurrencies such as Bitcoin and Ripple which are not limited during market hours.
Opportunities for weekend trading will only increase as trader activity and trading volume grow.
Cryptocurrencies & Binary Options
Weekend trading in cryptocurrencies and options is also on the rise. Bitcoin and Litecoin are just two popular digital currencies that have binary options offered for them. Because they are mostly Internet based, they can effectively be traded 24/7.
During the week the major currencies received the majority of attention. But late Friday trading volume in cryptocurrency options began to rise.
In addition, some binary options brokers provide special weekend options that start on Friday at the end of US trading and last until the European opening on Monday morning. The selection has also been carefully planned to cover the weekend’s events, including the release of economic data from the China and G-7 meetings.
Weekend Strategy
The first thing to note is that yes, during the weekend, the trading strategy takes place. Major market players were offline, which led to unusual dynamics over the weekend. As a result, volatility can increase and volume can decrease.
However, luckily there are strategies that have been developed specifically for weekend trading. Below one of the most effective and easy to set up has been detailed.
Trading the Gap Weekend
The gap just jumps the price. Something causes the price to move either up or down while skipping levels in between. Usually, a gap is the result of a new movement or an accelerating movement. However, this gap requires significant trading volume. But due to major market participants exiting the game over the weekend, you don’t usually see this type of gap. Instead, weekend trading focuses on gap closing.
Gaps can be closed when only a few traders make it. For example, several people may invest in the same direction, either by accident or not. As a result, the market will go up or down. Most traders then are not sure what is going on. Often they think the price has been too high or too low. So, they try to profit from the obvious mistake by trading in the opposite direction.
- Gap to the top – A gap to the top will see traders sell their securities. The market will then go down and the gap will need to be closed.
- Gap down – In a gap down, traders will buy, the market will go up and again the gap will close.
Gaps are often closed in low markets, such as weekends. This makes gap trading weekends an ideal strategy.
Strategy Implementation
Armed with knowledge, the gap will close, now you can take advantage of market conditions. This is because you also know some important bits of information. First, you have your price target, because the market will move until the price reaches the initial candlestick level that forms the gap. If the gap is up, it will sink to the top of your first candle.
You also know the expiration date. This is because you know the market is ready to reach the target price in the coming period. Therefore, you can use the high / low option. Alternatively, one-touch options can further increase your returns.
Also note, make sure you use options with a price target inside that gap, plus an expiration shorter than one period.
This is often considered a forex weekend gap trading strategy. But actually, this technique can be used with both options and commodities as well.
Finally, you may be able to increase your income by exploring weekend gap trading with an expert advisor (EA). Following predefined criteria, this algorithm allows you to execute more trades than you could manually.
How Can You Capitalize on the Weekend?
If you have a long trading week and you want to take a break from actually entering and exiting positions, there are various useful activities you can spend the weekend doing. Some of the best uses of time include:
- Retesting – Using historical price data, you can simulate previous market environments to test potential strategies. This is the perfect way to identify and fix any problems before you make your plans on Monday morning.
- Performance analysis – Finding time to reflect in the middle of a busy trading week is often challenging to say the least. That’s why the weekend is the perfect time to sit down and go through your trading journal and recent performance. Where did you go wrong this week? What changes do you need to make to your strategy now? Do you let your emotions drive your decision making?
- Risk adjustment – ​​By running a performance analysis, you can decide whether adjusting your risk parameters is justified. For example, if your strategy is producing more consistent profits, perhaps you can increase your risk tolerance and position size.
- Future planning – End of week trading can also include planning for the coming week. For example, are there any events coming up in your economic calendar that might impact stock trading? If so, have a plan to take advantage of the price fluctuations that will be triggered. As Benjamin Franklin pointed out, “by failing to prepare, you are preparing to fail”.
- Education – Weekend day trading can also involve itself in educational resources. There are now courses, webinars, books, ebooks, podcasts, as well as many useful websites available. All can be used to learn new strategies or build your market knowledge.
3 Best Tips for Weekend Trading
Whether you are interested in currency, stocks or weekend futures trading, there are some useful tips that can help you avoid pitfalls and potentially increase your profits. This includes:
1. Check Spreads
Because spreads often widen as a result of decreased trading volume and liquidity, finding a competitive broker is even more important. In fact, spreads can be very large at the close and open trades on weekends, due to low liquidity. Therefore, look for brokers that offer competitive spreads on weekends.
2. Overcoming the Decline
Low liquidity and possible gaps during weekend trading can cause a decline. To combat this problem, use the market range or maximum deviation feature available on certain platforms, such as MetaTrader.
These features allow you to decide on the maximum potential you are willing to admit. Set it to zero, for example, and you shouldn’t experience any degradation.
3. Take advantage of
daily trading Weekend News brings with it unusual trading behavior. Much of the volatility and activity will be driven by news announcements. So, get the latest information related to your market. Financial Juice, CNBC, and Yahoo Finance are all sensible sources.