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Friday, 16 August 2019

Trader's Outlook About Weekend Trading

In the past, when I first learned about forex trading, there were trader friends who gave advice, you should not trade on weekends, or rather on Friday. He was so serious in giving this advice that the impression that I caught at that time was: forex trading on Friday is "taboo".

As a result, for several weeks every Friday, I just open the platform and have fun observing the charts, sometimes for hours, without daring to open positions. Fortunately, then I tried to find a second opinion, ask my fellow traders, is trading weekend really dangerous? Why? Do they also not open positions on Fridays?

There were many answers that I received at that time. Starting from the serious, like: yes, you should really be careful when trading on Friday, especially in the final hours before the market closes. The reason? He said anyway because Friday for most traders is the last day to chase the weekly target, so many are rather determined to take profit.

There is also the answer which is more straightforward. He said, for him there was no difference between Friday and other days, as long as the trading system he adopted supported open positions, he was the open position. Well, even he said, often one position he had left floating for weeks!

Or even more ridiculous even answer: oh ... yes, right ... Friday was not a "good day" for trading, especially Friday Kliwon. If this one uses the occult indicator possible. Hehehe!

Because so many answers came up, I finally decided: to know what and how trading effects on weekends, I have to try it myself. It's not good enough, if everything is not experienced alone. Including also experiencing their own loss or profit, because of the gap that sometimes occurs at the beginning of the week.

Also Read : Trading Strategies Without Stop Loss

Weekend Phenomenon: Gap
So finally I often try to trade on Fridays. As a result, sometimes nothing special happens. In a sense, the movement of a pair is not much deviated from its original nature, and at the beginning of the week later also no gap occurred. Well, if the gap is only about 5 pips, it's still normal.

But, sometimes there is also a fairly large gap at the beginning of the week. I said it's not bad, because it can directly exceed TP (Target Profit) or snatch our SL (Stop Loss), hehehe ...

What and what exactly is that "gap"?

In general, the gap is a large difference between the closing price of the weekend and the opening price at the beginning of the following week. So, the opening price at the beginning of the following week is not exactly the same as the closing price. Gap can be as small as a few pips, to infinity.

The reason why there is a gap can be explained because the value of a country's currency is influenced by many factors, including of course economic, political and other factors related to the activities and events experienced by the country concerned. These various kinds of events certainly do not know the name "holiday", so that inevitably continues to run and occur, even on weekends, when the market closes. Well, sometimes special events or events can cause a country's currency to surge or plummet, so that when the market opens at the beginning of the week, there is a spike or a drop in prices on one pair. That is what we often refer to as a gap.

Then, how do we respond to the possibility of these gaps? Well, it goes back to the trading style of each trader. Some do prefer to avoid the gap so they tend to close positions before the market closes.

There are also those who leave a position open on weekends, it's just protected by Stop Loss or hedging / locking. There are even those who seek profit from the expected gap by placing a pending order just before the market closes.

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