Weekend trading is growing at a good pace in the area of finance. Many of the daily traders are inclining towards weekend trading as well. Extended Forex weekend trading hours have made this possible.
With no restrictions & regulations currency can be traded whenever any global market is operating, be it UK, New York, Shanghai or Hong Kong. You can also trade bitcoin and other crypto currencies over the weekend.
Some brokers now also offer weekend trading on indices as the growth in day trading part time continues. Here we have provided details of some market, strategy, instruments & risks to consider while doing weekend trading.
Can You Trade On The Weekends?
Many people have the misconception that trading took place only during weekdays, and that is somewhere right, but it’s not completely right. Obviously, many would want their precious Saturdays & Sundays off to have some relief.
Nasdaq weekend trading, and trading in India, plus the U.S stock exchanges are all off the cards from 16:00 on Friday, until 09:30 on Monday morning.
However, there are some markets which open during weekends as well & which is due to the world’s different time frame. The Middle East’s trading hours, for example, work Sunday to Thursday, and in some places, Saturday through to Wednesday.
Hence, the answer to the above question is YES!You can definitely start trading during the weekend. In fact, weekend trading in binary options, currency, stocks, CFDs, and futures is growing rapidly.
Some of the most popular stock indexes available during the weekend are:
- DFM Index – This index is based on the Dubai stock exchange, which is one of the major exchanges in the United Arab Emirates.
- Kuwait Stock Exchange – This is the national stock exchange in Kuwait and includes the biggest companies, banks, insurance companies, and real estate.
- Tadawul Index – This is the only stock exchange located in Saudi Arabia.
- Tel Aviv 25 Index – This is composed of the top 25 companies by market capitalisation in the Tel Aviv Exchange, Israel.
In addition to the above, few brokers are now offering weekend trading on European & US indices, which includes FTSE, DAX & Wall Street. Make sure to read terms and conditions of weekend trading, as there is some difference between terms in daily and weekend trading. Because brokers might prevent using some technical indicators at weekend trading, particularly stop-loss.
Why Trade On The Weekend?
So, whilst there are weekend trading markets available, it’s an entirely different question as to whether you should get involved. Here are several reasons why you might want to:
- Strategy friendly – Whilst some strategies will turn handsome profits in a high volume week, others will perform better on the weekends.
- More trading = more profit – While this is not always the case, in general, the more time you spend trading the greater opportunity you have to turn profits. If it’s a choice between housework and generating revenue, many will opt for the latter.
- Flexibility – For some, trading in the week simply isn’t an option. The weekend is 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 hectic, the weekend may come with fewer distractions. This could translate into greater concentration and enhanced trading decisions.
Restrictions on Weekend Trading
- Limited Instruments
- Low Volume
- Varying Time Zones
- Brokers Hours
- High Volatility
Weekend Trading Strategy
1. Gap Trading Strategy:
Price gaps are simply areas on a bar chart where no trading has taken place. In an uptrend, prices open above the highest price of the previous day. In a downtrend, the day’s highest price is below the previous day’s low. There are three types of gap; the breakaway, runaway & exhausting gaps.
- The Breakaway Gap: This usually occurs at the completion of an important price pattern, and usually signals the beginning of a significant market move. Breakaway gaps usually occur on heavy volume.
- The Runaway Gap: After the move has been underway for a while, somewhere around the middle of the move, prices will leap forward to form a second type of gap called the runaway gap.
- The Exhaustion Gap: The final type of gap appears near the end of a market move. After all objectives have been achieved and the other two types of gaps have been identified, one should begin to expect exhaustion gap.
2. Bollinger Bands:
This technique was developed by John Bollinger. Two trading bands are placed around a moving average. Bollinger bands place two standard deviations above & below the 20 days moving average. Using two standard deviations ensures that 95% of the price data will fall between the two trading bands.
As a rule, prices are considered to be overextended on the upside when they touch the upper band. They are considered overextended on the downside when they touch the lower band.
As Paul Tudor Jones aptly highlighted, “The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.” Whilst practice makes perfect, you need to absorb as much information as possible. So, consider spending the weekends pursuing the following:
- Courses – There are numerous online courses that will help you get to grips with intricate strategies, taught by veteran traders.
- Books – You’ll find a whole host of books and ebooks that provide invaluable advice and guidance. If you’re looking for some of the most highly regarded, see our books page.
- Podcasts – If you’re busy on the weekend, or on a long drive to the in-laws, why not put a podcast on? You’ll find asset-specific audio casts written and recorded by experts. Just one useful tip could make the difference between a financially flailing strategy and a profitable one.
Just like day trading, the weekend is another opportunity to make profit. As most of the big traders are on holiday during weekends, you have a good opportunity to make use of it. Though the market is volatile, hence participants are required to make strategy accordingly.
While many brokers & exchanges are close but you can trade with those we mentioned above. And at last trade with discipline & proper system.