Day trading on the weekend is a growing area of finance. Weekend trading hours in Forex have extended far beyond the traditional work week. Without a central market, exchange rates can be traded whenever a global market exists – be it London, New York, Hong Kong or Sydney. For similar reasons, Bitcoin and other cryptos can also be traded over the weekend. Some brokers now also offer weekend trading on indices, as part-time day trading grows. Discussed here are some of the markets for weekend trading, strategy choices and some benefits and risks.

 

 

Can you trade on weekends?

There is a popular misconception that you cannot trade on the weekend. Perhaps it is because it is understandable that many in the financial world would like their precious Saturdays and Sundays. Nasdaq weekend trading, and trading in India, plus the US stock exchanges, are all off the map from 4pm on Friday to 9.30am on Monday morning.

However, technology has been the catalyst for globalization and not everyone in the world works according to the same schedule. For example, the trading hours of the Middle East operate from Sunday to Thursday, and in some places, from Saturday to Wednesday.

The answer is yes, you can definitely start trading online this weekend. In fact, weekend trading in binary options, currency, stocks, CFDs and futures is growing rapidly.

Some of 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 most important exchanges in the United Arab Emirates.
  • Kuwait Stock Exchange – This is the national stock exchange in Kuwait and contains 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 – it consists of the top 25 companies by market capitalization in the Tel Aviv Stock Exchange, Israel.

In addition to the above, some brokers now also offer weekend trading on European and American indices, including the FTSE, DAX and even Wall Street. Always make sure you read the terms of weekend trades, especially if you use stop losses. At IG, for example, setting stop losses during the week will not be activated on the weekend. At the same time, trades made during the weekend can be left open during the official opening hours of the markets. These conditions can play an important role in your strategy, so make sure you understand them. As more brokers begin offering weekend trading, the differences between their operations will grow.

Why trade on the weekend?

While markets have been trading for the weekend, whether you should get involved is a whole other question. Here are some reasons why you might want to:

  • Strategy friendly – while some strategies will deliver handsome profits in a high volume week, others will do better on weekends. Asian markets, for example, are different from many Western markets. It is in the hands of certain traders with strategies that are better suited to the different market conditions.
  • More trading = more profit – although this is not always the case, the more time you spend trading, the greater the opportunity to profit. If it is a choice between domestic work and generating income, many of them choose the latter.
  • Flexibility – for some, trading during the week is simply not an option. The weekend is ideal for those with busy schedules and commitments during the week. You have the freedom to choose the hours that suit you.
  • Focus – If your week is special, the weekend can have fewer distractions. This can lead to greater concentration and improved trading decisions.

Restrictions on weekend trading

Despite the many advantages of weekend day trading, there are still a number of limitations. The most problematic of these are listed below.

  • Limited Instruments – Fewer assets are available on weekends. If you like to trade with news and with instruments that you have a good understanding of, you may face problems. For example, Nokia, Ford Motors and Twitter are all trading on the New York Stock Exchange over the weekend and off limits. However, those who trade on the price movements through technical analysis should still be able to make a profit.
  • Low Volume – Trading hours for weekend in Forex span both Saturday and Sunday. If London closes up shop, Hong Kong is still going strong. Gold and oil trading markets for the weekend are very similar. The problem is that the trading volume will be unusually low at some points. This leads to flat markets and useless cards.
  • Time Zones – This limitation is rather self-explanatory. Your body clock probably doesn’t look favorable on the trade this weekend. For example, stock exchanges in the Middle East operate at less friendly hours than if you are in the UK or the US. If you don’t want to get up in the middle of the night, you might want to think twice.
  • Broker Hours – Many brokerage firms feel that there are not enough clients to open their doors on the weekends. This means that you should check the trading hours of your broker. If they are not open, you should go elsewhere. 24option, Metatrader, Scottrade, Etrade and FXCM all offer weekend trading platforms, as do IG and Nadex.
  • Dangers of Volatility – Although volatility also offers many opportunities to profit, it also carries risks. Since normal market participants are not active, there are often large differences between bid and ask prices for stocks. This results in some traders being beheaded.

Practice trading strategies on weekends?

Yes they do. Because of the big players spending their profits over the weekend, the markets can behave in peculiar ways on Saturday and Sunday. You will find increased volatility and fluctuating volume.

All this means that you need to adjust your strategy in accordance with the new market conditions. Alternatively, you want a unique strategy for weekend trading.

Below are various strategies carefully designed for weekend trading.

Closing Gaps – Gap Trading Strategy

The market conditions are ideal for weekend gap trading in forex and options strategy. Gaps are simply pricing systems. At some point, something moved the market, resulting in a price jump to a higher or lower level, while the prices in between were locked out.

First, what causes the gaps? Any number of things could be the cause, from new movements to accelerated movements. The one thing they do require is significant volume. With the big players out this weekend, you’ll struggle to find these gaps. Instead, you find gaps open.

Only gaps can be created by single traders. For whatever reason, a few people invest in the same direction. The market then starts to increase and everyone else is left scratching their heads. So what do they do? They think it must be a mistake and trade in the opposite direction, trying to take advantage of the mistake.

  • Upward Gap – Traders will sell their assets. The markets will then fall and the gap will close.
  • Downside Gap – Traders will buy assets. The market will then rise and the gap will close.

If you see gaps in low-volume markets like weekends, chances are they will close.

Application

Because you know the gap will close, you have all the information you need to make a profit. You know:

  • The price objective – The market is going to rise until the price reaches the level of the first candlestick that constitutes the gap. With downside gaps, it should rise to the low of your previous candlestick. If there are gaps upwards, they should fall to your first candlestick.
  • The expiration – You know that the market must reach the strike price within the next period. So you can trade a high/low option. In addition, you can trade a one-touch option, which can give you a larger payout. Make sure you invest in an option with a price target within the gap and that expires in less than one period.

This strategy is simple and can be applied to currencies and commodities. All you need are your weekend trading cards and you can get to work. You can even follow the weekend gap with Expert Advisors (EA).

 

 

Bollinger Bands

This is an effective strategy to add to your weekend arsenal. Bollinger Bands highlight a price channel that the market should not exit. You will find that this price channel can be extremely accurate on the weekends. This makes it the ideal base for your weekend strategy.

The band consists of three lines:

  • Top line – The moving average plus twice the standard deviation. It works as a resistor.
  • Lower line – The moving average minus twice the standard deviation. It works as a support.
  • Midline – A moving average of 20 periods. It can be either support or resistance, depending on whether the market is trading above or below it.

Generally, you will find that the market will turn when it approaches your Bollinger Band.

Weekend use

These bands produce the best results on the best weekend. This is because news events and major traders can start new moves during the week, and thus the trading area fluctuates more. If the standard deviation is moving, you should also do the upper and lower Bollinger Bands. Strong movements will stretch the bands and carry the limits on the trends. This can render predictions useless.

However, the reduced volume over the weekend makes the market more stable. A significant number of traders are unlikely to jump on a movement and disrupt the status quo.

Application

You only need to follow three steps to implement your new strategy.

  1. Build your chart –  decide on an instrument and then set up your price chart with your Bollinger Bands.
  2. Be patient – now you can sit back and wait for the market to approach your tires. You must remain patient until the market is within one of the three Bollinger Band lines.
  3. Make your prediction – now is the time to enter your position that the market will turn. For example, you can use a high / low option that predicts that the market will not breach the Bollinger band.

Because it’s so simple to apply, it’s ideal for experienced traders and beginners alike.

Alternatives

If you don’t want to spend your weekend trading bitcoin or the stock market, there are other ways you can be productive. The weekend is an opportunity to analyze past achievements and prepare for the coming week.

Below are several worth exploring on weekends.

Education

As Paul Tudor Jones aptly highlighted, “The secret to being successful from a business perspective is to have an inescapable and an incessant and unquenchable thirst for information and knowledge.” Although practice makes perfect, you should record as much information as possible. So consider spending the weekends doing the following:

  • Courses – There are numerous online courses that will help you learn complex strategies taught by veteran traders.
  • Books – there are quite a number of books and e-books that offer valuable advice and guidance. Check out our books page if you’re looking for some of the most popular people.
  • Podcasts – If you’re busy this weekend or on a long drive to the in-laws, why not put on a podcast? You’ll find asset-specific audio broadcasts written and recorded by experts. Just one helpful tip can make the difference between a financially diversified strategy and a profitable one.

Manual backtesting

There is no better way to predict how the markets will behave in the future than to look at the past. You can use those lazy Sunday hours to simulate past market environments to test potential strategies.

Although it must be said that past performance is no guarantee of future performance, it can be a strong indicator. Not to mention, you can iron out any creases so your plan is ready to go when you go online at 9:30 a.m. Monday morning.

Evaluation

When the markets are open, you can often get caught up in a whirlwind of emotions and trading activity. The weekends are fantastic for giving you the opportunity to take a step back. You can look back and highlight mistakes.

This will help you implement a more effective trading plan next week. You may need to adjust your risk management strategy. Maybe it’s time to try a different breakout strategy this week. So, if you are not interested in trading stocks on the weekend, sit down and identify areas for improvement.

Planning

The weekend also gives you the opportunity to investigate any upcoming events that may affect your market. For example, the DailyFX Economic Calendar lets you identify important economic dates, such as policy reform. You can then adjust your action plan to account for future events that will affect market conditions.

Final Word

For the switched-on day trader, the weekend is just another opportunity to deliver profits. While some of the major traders are out of town, you can find volatility in markets around the world to take advantage of. Although many brokers and exchanges close, there is always activity, especially in the Middle East. If you do want to trade, remember to adjust your strategy according to the different market conditions. Also, choose one of the weekend-specific strategies above.

If you want a break from the actual trading, you can still prepare for the upcoming week. You can use any of the educational resources above, or you can start with the test and strategy for Monday.