Forex trading over the weekend: the good, the bad, the future

Author: Albina Zhdanova

Technically, forex trading is available at any hour seven days a week. In reality, it closes on Friday afternoon and only reopens on Sunday evening. In the gap between trading sessions, the world continues to spin with events happening that affect currency prices.

To make the most of the market, many traders use the so-called Weekend Gap strategy to trade, relying on Sunday's opening price to roll back Friday’s closing price. Just like any forex trading strategy, trading over the weekend is a high gain, high risk situation. It is up to each trader to analyse the individual risks and see if potential profits outweigh possible losses. There are pros and cons to this, and today we look into both.

What are the benefits involved in Weekend Gap trading?

New clients

Forex trading on the weekend opens up the opportunity to trade for those with jobs that overlap with market working hours. Thousands of people across the world only have free time on the weekend and can join the forex world on Saturdays and Sundays.

Additional trading time

This one is pretty self explanatory. The more you trade, the more chances you have to make bank.

Strategies diversification

Trading gap over the weekend represents one of the trading strategies that brokers can utilise and, consequently, lower their risks.

What are the risks involved in Weekend Gap trading?

Increased costs

Weekend is a low trading volume period. It is not uncommon for brokers to increase the spreads and use it as a tool to compensate for low volumes and, therefore, lower the total profits.

Volatility

Just like forex trading in general, trading over the weekend is a high risk activity. Some experts consider it even more volatile than trading during the work week. Although investors might get lucky, there is a big chance of making a loss. The future of forex trading on the weekend

While it was possible to trade over the weekend to some extent, the market has long been waiting for a proper solution. The world doesn’t stop on Friday afternoon, so it is just a matter of time until the industry shifts completely, and over the weekend trading becomes a normal thing to do.

The first step has been taken by enabling access through the new TFB add-on application which accesses Weekend FX liquidity from LMAX Global. We have designed the add-on with no separate interface which is installed on top of the liquidity bridge. It will power trading on Saturday and Sunday, giving investors more time to trade, and brokers more services to offer their clients, and potentially more profits.

Interested in more details? Please email us at sales@t4b.com.