You already have a drink in your hand and ready for some weekend activities , but you still have one trade open. Should you close trades before the market shuts down for the weekend or not? Multiple traders will give you many different answers. I decided to look into it. Scenario one shows a trade setup where the trade was kept open over the weekend. Scenario two shows a trade setup where the trade was closed before the weekend.
These examples will not show that one is better than the other, but rather that whether or not to close trades over the weekend can make a big difference. The following scenarios show why. You decide to keep the trade open. On the other hand, consider this: Since you have a rule in your trading plan to never keep trades open over the weekend, you decide to close the trade. Multiple approaches, multiple results. The temporary fluctuations over a weekend will very likely not affect your position too much, so you keep your trades open.
If you trade off the 1H or the 4H, you might keep trades open for a couple of hours until a few days. To know exactly what to do, you should look at the next couple of factors. This is of course very much dependent on the size of your stops, so this is a consideration each trader has to make for him or herself.
The actual number is something every trader needs to decide on their own. Another approach could be to look at the ATR and if the distance to your stop loss is more than say 2x ATR, leave it open. Again, the specific value is something you need to decide.
Certain times can have a relatively bigger probability of something unexpected occurring than other times. If you know Brexit negotiations are currently happening, it might be wise to close out any GBP trades you have open before the weekend. You get the idea. What makes up an unstable fundamental climate is very subjective, of course. Your trading plan and trading journal should provide the necessary insights as to whether closing trades for the weekend works for you or not.
A trading journal should provide you with the possibility to add custom statistics on your trades whether you just keep this in an Excel document or have trading journal software. A good trading journal that I use and which supports custom statistics is Edgewonk.
Over a significant sample set of trades, this will give you invaluable information on what to do. You should base your decision on objective statistics, rather than some gut feeling however good your gut feeling might be. For every trade, you should track at least these two things:. This is because trading on Fridays often slows down a bit. A lot of traders will stop early on Friday, which reduces liquidity and leaves room for potentially unpredictable moves.
Additionally, not opening trades on Friday afternoon will automatically result in fewer trades I might need to close because of the weekend.
Finally, closing your trades gives you some peace of mind. On the other hand, if you closed your trades, you can enjoy some free time, review your past trading week and plan for the upcoming week without worrying if you will still have a good trade when the market opens again on Monday. Whether or not to close trades before the weekend is something that should be in your trading plan. Let me know in the comments! I'm a full-time, independent forex trader.
I've been trading for over 10 years and specialize in price action trading, reversal trading, trading psychology and algorithmic trading. If you're determined to become a pro trader, I offer select consulting and coaching services. When I'm not trading, I'll either be travelling the world or rock climbing likely both. Read my story here. How to come up with a forex trading strategy - Smart Forex Learning. July 15 - Smart Forex Learning. October 8 - Smart Forex Learning. Please consider carefully if such trading is appropriate for you.
Past performance is not indicative of future results. Articles and content on this website are for entertainment purposes only and do not constitute investment recommendations or advice.
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