Is it possible to trade on weekends?

Foreign currency is one of the most appealing markets for traders since it trades nonstop 24 hours a day, seven days a week, from the Monday morning open in Wellington, New Zealand, to the Friday evening close in New York. Trading 24 hours a day, seven days a week is simply not enough for some traders. Weekend trading is available at LMAX and IG Markets for clients who need to hedge their positions even when the market is closed.

Effects of Cryptocurrency Spillover

Retail weekend trading is a relatively new phenomenon, owing solely to the popularity of cryptocurrencies. Cryptocurrencies trade nonstop across all exchanges 24 hours a day, seven days a week, and many younger traders see this as a huge benefit since it allows them to continue to utilize their trading models over the weekend.

Weekends, in particular, are seen as critical for bitcoin traders. Various weekend achievements were announced in a CNBC article:

Weekends have seen some of Bitcoin's most dramatic price fluctuations.

Since December 2017, about 60% of Saturdays have witnessed a 5% or larger move during the weekend.

Bitcoin has increased by at least 3% on 82 percent of weekends.

Because of the popularity of weekend cryptocurrency trading, some brokers have begun to provide weekend trading on Forex and other instruments to their customers. With global markets becoming more interconnected, efficient capital markets are becoming increasingly important, and as “conventional asset classes” catch up to cryptocurrencies, we may witness a trend toward 24/7 trading in the coming years. Another advantage of weekend trading is the ability to react quickly to critical, unscheduled geopolitical news or events that would otherwise cause a gap to appear when the Forex market opens on Sunday evening. To summarize, the globe is linked, and money is always awake. So, why shouldn't we be allowed to trade 24 hours a day, seven days a week？

Trading Hours and Weekends in Forex

Let's have a look at the official open and closure hours for several marketplaces before we talk about trading over the weekend. Varied marketplaces, obviously, have different open market hours. Stocks, stock indices, and commodities each had their own cash session, which is when the traditional “trading pit” was open. The cash session has the maximum liquidity, and the majority of large players trade during this time. The New York Stock Exchange and NASDAQ, for example, have open market hours for normal stocks between 9:30 a.m. and 4 p.m. EST. After-market trading hours (4 p.m. to 8 p.m. Mon-Fri) are also available, although they normally come with higher trading expenses and less favorable execution prices. Similarly, the German Dax cash session is open Monday through Friday from 9 a.m. to 5:30 p.m. CET.

Because the CME Globex enables electronic trading 24 hours a day, seven days a week, from Sunday at 18:00 EST to Friday at 17:00 EST, most CFD brokers display continuous price charts for most assets.

When does the foreign exchange market close on Friday？

The trading hours for forex are varied. The Forex market is a hybrid of the stock market (with clearly defined cash and electronic trading sessions) and the cryptocurrency market (which trades nonstop 24 hours a day, 7 days a week). The Forex market is open 24 hours a day, but only from 17.00 EST on Sunday (the Wellington open) through 17.00 EST on Friday (the New York close). The 24-hour Forex trading day is covered by four distinct money centers:

Wellington: 17:00 EST to 02:00 EST the next day,

Tokyo: 19:00 EST to 04:00 EST the next day,

London: 03:00 EST to 12:00 EST,

New York: 08:00 EST to 17:00 EST.

Liquidity vs. Volatility

Traders who have a regular day job and are unable to trade during the week may find trading on weekends appealing. However, if you're trading over the weekend, you should be mindful of the following pitfalls:

Trading expenses are greater, and liquidity is lower.

It's no coincidence that Bitcoin's biggest changes occur on weekends: there's less liquidity and hence less money streaming into the market. In certain circumstances, far lower order volumes are required to “move” the market significantly.

On the one hand, because of the heightened volatility, many active traders view the weekend as a source of opportunity. On the other hand, cryptocurrency traders should exercise extreme caution since, due to limited liquidity, uncontrolled trading, and a lack of obvious circuit breakers or fundamental values, prices can increase or fall much further than anybody expects.

Weekend trading is a novelty offered by cryptocurrency traders, and traditional asset classes are slow catching up — partly because habits are difficult to break, and most financial markets are used to the weekend vacation.

Weekend trading on anything other than Bitcoin or other cryptocurrencies is now difficult to justify due to poor liquidity, higher transaction costs, and a smaller selection of products. You should only consider hedging your position on Saturday or Sunday if you have an open position that is vulnerable to a large unplanned geopolitical event over the weekend.

Regardless of the method you use, you should have plenty of trading chances over the week. Trading over the weekend is not the best choice if you can't find time to trade during regular market hours. Adopting a trading technique that works for you is a superior option.