To Trade, or Not to Trade… on Friday

Filed under: Learn Forex Trading |

Screen shot 2013-01-18 at 11.21.03With regards to trading the forex markets, the decision of whether to make trades on Friday is entirely up to each individual trader. For me personally, making a trade just a few minutes before the markets close on a Friday makes no sense. Although the forex market is a 24-hour market, they do close over the weekend (from Friday night until Sunday night UK time), and as such, there can sometimes be market gaps between these times due to weekend news or events.

 

Therefore, rather than making a trade on a Friday night, I would personally wait until the open of the market on Sunday night, and revaluate the setup then. If you took the trade on Friday night and the market gapped against you, then you could take a heavy loss (and even beyond your stop loss with some brokers). Of course, the market could also gap in your favour, but to me, holding a position over the weekend is not something I really want to be getting into the habit of doing if possible.

 

However if a trade opportunity came on Friday morning or mid-Friday, particularly on the lower timeframe charts, then if it was a good solid setup I would take it without hesitation. Many trades taken off of the intraday charts (namely the 4-hour or 1-hour timeframes) are opened and closed within the space of just a few hours, so it would make no sense to hold off on these trades. However, if I have a trade already in play at the close of the market on Friday, I tend to hold on to it because closing it and then reopening it on Sunday means that the spreads will begin to take large portions of any profits. Therefore, this is not something that you really want to be doing either

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