Weekend trading with binary options allows traders to trade seven days a week. With the Forex markets trading hours spread out for 6 days of the week, and some markets and indices open on Saturday and Sunday – there are lots of opportunities. This article explains the details of weekend trading and how you can be successful in doing online trading on weekends.
This article explores:
Trading on Weekends – Advantages and Drawbacks
WHY TRADE IN WEEKENDS – AVAILABLE MARKETS AND ASSETS
Weekend Strategy – Specific Strategies & 3 Top Tips
With this information, you will be able to be successful in weekend trading with binary options.
weekend business
While most of the Saturday morning market is in bed, some people are up bright and early to start the weekend day. From forex and futures to stocks and cryptocurrencies, many are sleeping and drinking their way through two days of potential profits. Therefore, this page will examine both the advantages and disadvantages of day trading on the weekend before covering strategies, trading hours, plus top tips.
Benefit
Firstly, why should you swap a rest day for online trading on the weekend? Probably for any of the following reasons:
Profit Potential – You have two extra days to trade over the weekend. Two extra days to generate more earnings. If you haven’t had such a great week, the weekend gives you an opportunity to improve your account balance.
Timing – Trading on the weekend allows you to trade multiple currency pairs, for example, and still have plenty of time to evaluate each trade. On top of that, you don’t need to make decisions while you are trying to exit the market at certain points in the week.
Strategies – During the weekend when the markets are on break, you have time to develop more complex trading strategies. Also, some trading plans will perform better on weekends. For example, Asian markets often behave differently on Saturdays and Sundays than Western markets. As a result, some strategies can generate greater profits at the weekend than at the end of the week.
Undivided attention – In particular, many people work throughout the week. Therefore, even finding the time to focus on trading can be a challenge. This is why weekend trading gives you a great opportunity to concentrate completely on your trading activity. On top of that, fewer distractions can enhance business decisions.
Preparation – Weekend trading can be more than just entering and exiting positions. While most of the market takes a breath, you can perform 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.
Drawbacks
Despite the number of gains, the weekend may see some downside in day trading:
Fewer Options – There are fewer instruments available to trade on the weekend. Notably, many stocks will be unavailable. However, currency weekend trading is readily available as the markets run 24/7.
Weekend bias – There is also a danger of carrying weekend bias with you on Monday. For example, you may have changed your trading plan or may have been desperate to make up for a loss. If you’re not careful, this could result in an unprofitable Monday.
Low Volume – Even though forex, oil and gold trading is still available over the weekend, low trading volume can lead to problems, such as the ability to reduce price shifts. Furthermore, a lack of volume can lead to flat markets and unfiltered charts.
Limited Brokers – Many brokers do not offer trading on weekends. They feel that it is not of quantity or interest, whereas they make it their worth. Therefore, if you are committed to a specific broker, you may be unable to trade until you move elsewhere. Fortunately, IQ Option, 24option, eToro, FXCM and Nadex all offer weekend day trading facilities.
Trading hours – Day trading on weekends may not suit your body clock. Middle Eastern markets, for example, are often active on weekends. This means that if you are based in the West, you may need to be prepared to trade during non-social hours.
Liquidity – Without money managers to take the other side of trades, markets are often less liquid. Then reduced liquidity can lead to an increase in volatility. The result of which is a wide spread between the bid and the ask. This can make production more challenging. That said, a higher level of volatility can also mean increased profit potential.
Why trade on weekends?
Trading Stocks and Indices
Many traditional instruments and markets that you trade during the week will be out of the cards on the weekend. For example, the NASDAQ and other US stock exchanges are closed from 16:00 on Friday until 09:30 on Monday. However, Sunday to Thursday and Saturday to Wednesday are the weekdays in the Middle East.
In addition, brokers and platforms in the currency and CFD markets are offering seven-day
Adding Week and a range of local stocks and indices. Some of the indices providing the most volume for day trading on the weekend are:
Tadwul Index – Saudi Arabia The index represents the largest economy in the region. As a result, it is the most popular index found among brokers offering weekend trading.
Tel Aviv 25 – Also known as the TA25, it is made up of the 25 largest Israeli companies. Those interested in IT and Pharmaceutical industries may be well suited.
DFM Index – Some of the most important players from the United Arab Emirates can be found here.
Kuwait Stock Exchange – The Kuwait economy is diversified. Hence, this stock hosts companies from the financial, insurance and real estate sectors.
Now that Saudi Arabia has changed its scope to align with neighbors, foreign businessmen now have better access than ever. As they continue to move towards full access, liquidity will increase and weekend traders will benefit from higher profit potential.
However, this did not go unnoticed by the brokers of the traders who traded over the weekend. Some now offer trading on markets that have traditionally been closed. For example, NOW offers weekend access to the FTSE and DAX indices as well as Wall Street. The rules for stop loss etc. change slightly (weekday trades are unaffected by anything that happens on the weekend, for example). This reflects the increasing volume of trading done over the weekend – driven by cryptocurrencies such as bitcoin and ripple that are not restricted to market hours.
Weekend trading opportunities are only likely to increase as trader activity and trading volume increase.
cryptocurrencies and binary options
Weekend trading in cryptocurrencies and options is also on the rise. Bitcoin and Litecoin are just two popular digital currencies for which binary options are offered. Because they are primarily an Internet creation, they can effectively be traded 24/7.
Major currencies get the most attention in the week. But trading volume in cryptocurrency options starts to pick up late on Friday.
On top of that, some binary options brokers offer specific weekend options that start at the end of US trading on Friday and last until the European open on Monday morning. These options have also been carefully engineered to cover the weekend’s events, including economic data releases from China and the G-7 meetings.
weekend strategy
The first thing to note is that, weekends do make for effective trading strategies. Major market players are offline, leading to unusual dynamics over the weekend. As a result, volatility may increase and volume may decrease.
Fortunately, however, there are strategies that have been developed specifically for trading on the weekend. One of the most effective and simple to install has been detailed below.
weekend gap trading
The interval just jumps the value. Some reason the price shifts either up or down while skipping the levels in between. Typically, lag is a result of beginning new movements or accelerating movements. However, these gaps require significant trading volume. But with major market participants being out of the game on the weekend, you don’t normally see these types of gaps. Instead, weekend trading focused on the closing gap.
Gaps can close when only a few traders make them. For example, many people may invest in the same direction, whether by accident or not. As a result, the market will rise or fall. Most traders will then be unsure what is going on. Often they think that the price has gone too high or too low. So, they try to profit from the obvious mistake by trading in the opposite direction.
Upward Gap – Traders will sell their securities on seeing an upward gap. The market will then fall and the gap should be closed.
Downward Gap – In a downward gap, traders will buy, the market will move up and gap close again.
Gaps often close in low volume markets, such as the weekend. This makes the weekend gap an ideal strategy.
strategy implementation
Armed with the knowledge that the gap will be closed, you may be able to capitalize on market conditions now. This is because you also know several important bits of information. First, you have your price target, as the market will move until the price hits the level of the initial candlestick that created the gap. If there is an uptrend, it will sink to the high of your first candlestick.
You also know expiry. This is because you know that the market is ready to hit the target price within the next period. Therefore, you can use a high / low option. Alternatively, the one-touch option can further increase your returns.
Also note, make sure you use an option with a price target inside the gap, as well as an expiration period shorter than the one.
This is often thought of as a forex weekend gap trading strategy. But in fact, this technique can be used with both options and commodities as well.
Finally, you can
Increase your volume by exploring weekend intraday trading with Expert Advisors (EA). Following pre-defined criteria, these algorithms allow you to execute far more trades than was possible before manually.
How big can you capitalize on the weekend?
If you have had a long trading week and you really want a break from entering and exiting positions, there are a whole host of useful activities for you to do over the weekend. Some of the best uses of time include:
Back-testing – Using historical price data, you can simulate past market environments to test a potential strategy. This is the perfect way to identify and remedy any problems before you put your plan into action on Monday morning.
Performance Analysis – Finding a moment to reflect in the middle of a busy trading week is often challenging to say the least. That’s why the weekend is a perfect time to sit down and go through your trading journal and recent performance. Where did you go wrong this week? What do you need to change in your current strategy? Do you let emotions drive your decision making process?
Risk Adjustment – By conducting a performance analysis, you can decide whether it is prudent to adjust your risk parameters. For example, if your strategy is generating more consistent profits, perhaps you can increase your risk tolerance and position size.
Planning for the future – Weekend trading can also include planning for the coming week. For example, are there any events coming up on your economic calendar that could affect share trading? If so, they will have a plan in place to capitalize on the price volatility that they will trigger. As Benjamin Franklin said, “By failing to prepare, you are preparing to fail”.
Education – Weekend day trading can also involve immersing yourself in educational resources. There are now courses, webinars, books, e-books, podcasts, as well as a host of useful websites available. All can be used to learn about a new strategy or to build on your market knowledge.
3 Top Tips for Weekend Trading
Whether you are interested in currency, stocks or futures weekend trading, there are several useful tips that can help you avoid losses and potentially profit. Contains:
- check spread
Because spreads often widen as a result of low trading volume and liquidity, finding a competitive broker is even more important. In fact, spreads can be particularly large at the close and open of trading on weekends due to low liquidity. So, look for competitive events the broker offers on the weekend. - slippery slope
Low liquidity and the possibility of gaps can cause slippage during weekend trading. To deal with this problem, use certain categories such as the market range or maximum divergence features available on Metatrader.
These features enable you to decide on the maximum possible slippage you are prepared to accept. Set it to zero, for example, and you won’t suffer any reduction.
- use of news
Weekend day trading brings with it unusual trading practices. Most of the volatility and activity will be driven by news announcements. So, stay up to date with any news events relevant to your market. Financial Juice, CNBC and Yahoo Finance are all sensible sources.