Iam just wondering how come prices closes while economies keep moving?:56:
Price DOES move over the weekend. In fact, the big players who actually influence price movement will do their thing if some big piece of news comes out over the weekend…like if the Japan nuclear reactor melt-down hit on a Saturday or something.
It’s just us retail traders who are out over the weekend. Mostly because the retail brokers want to close up shop and go home every weekend instead of work and answer phones. If traders are trading, you can be assured that the phones are ringing.
This is why people worry about the market “gaping” against them come the open of the market Sunday evening. It’s also why brokers will lower leverage limits over the weekend. They don’t want some nutter leveraged to the hilt and come the open of the market find that things have gaped against the guy 100 pips.
Yes, they often keep moving, hence the weekend trading gaps you see. These trades are usually banks trading with each other. After hours trading is much more obvious looking at the NYSE or NASDAQ. Oftentimes, the biggest movements of the day occur in after hours trading when the average retailer doesn’t/can’t trade. Many traders close their positions no matter what before the Friday close to avoid gaps.
On Fridays, Forex Brokers close their dealing desks and reopen on the Monday mornings. There are however many countries where the financial institutions are open over weekends and there are also many news, political and financial events that will move the market on Saturdays and Sundays. Because of this the Friday price is often considerably different on a Monday morning when Brokers reopen their trading facilities. This is known as the Forex Weekend Gap.
It must also be noted that these gaps are Broker specific. Not all Forex brokers close and open their dealing desks at the same worldwide time.
Based on a some observations on gaps and weekend movements, 80% of price movements close within the same day that they occur. By close I mean the Monday price returns to the Friday price, whereby closing the gap.
The above facts immediately create two Forex trading opportunities that experienced traders have taken advantage of for years.
The first is the weekend straddle which, if you can find an appropriate broker, is the lowest risk trade in Forex trading. You would simply straddle the price at the close of trading on the Friday with pending orders and close any activated deals on the Monday morning. Although this sounds quite simple there are some trading skills involved.
The second opportunity is created by knowing that 80% of gaps close in the same day. This gives you the information you need for your next trade. You would simply enter a deal in the direction of the Friday closing price when the Monday morning price is known and trading commences. This trade is also not as simple as it sounds and care should be taken to use appropriate sized stops. Many traders use the fact that some brokers open earlier than others on a Monday morning to get advanced price movement information to assess the market sentiment for closing the gap.
When the gap is not closed the currency price often runs for hundreds of pips which creates a third online forex trading opportunity.
Weekend market gap happens due to important event or news that occurred during the weekend after the market is closed.
Although there is no trading activity during the weekend, the market is already pricing in the effect of a particular event or news.
Guys, do you know any broker with MetaTrader 4 platform who allows trading on weekends?
There is plenty of trading over the weekends, just not by retail traders. It is the same as after-market and pre-market trading at NYSE.
No. Retail trades are closed for weekends internationally.
Oanda does, but the spreads are RIDICULOUS, and the chart feeds are dead.
However, I don’t think you can use MT4 there on the weekend, but their proprietary platform lets you make trades. (again, the chart feeds are non-existent)
Give yourself a break during the weekend :24:
I don’t think that the prices move on weekends because the market close.
i also think that forex market should be opened on saturday and sunday, because i also feel bore and i just wait for monday that market will start and i can trade and enjoy my trading…and also it will be good because we will be attached to forex market all the days and we can make more good progress and learn forex trading and market more and well…
Yes, this is a good idea to have a rest… but sometimes I do not have enough time for trading during the working week so I want to do some trading on weekend. Also I thought that on weekend the trading can be a little bit different so we may invent new strategies which work on weekends data only, who knows…