Friday ny closing

Beginner Questions
1

Hi all!

:smiley:

Im wondering, on friday an hr before ny closing, would the spread on the pairs still be at their average or due to the dried up liquidity it would widen already?

Example eu would be around 2?

And also, what’s the largest mon opening gap you guys have encountered?
Just curious, thanks!

2

Last summer, someone started a thread called “Spreads go crazy at 5pm EST”, and claimed that enormous spikes occurred in forex spreads right around 5pm New York time every day.

Most of the people who replied on that thread said they weren’t seeing huge spikes at that time. (I don’t know whether the OP (of that thread) ever got his problem resolved, or not.) I posted a tick chart on that thread, showing Bid and Ask prices around the 5pm time period on a Thursday — 301 Moved Permanently

You’re asking specifically about the [I]Friday[/I] close. Well, today is Friday, so you might want to pull up a similar tick chart around 4pm EST today, and see what happens as the market approaches the close. I predict that pretty much nothing out of the ordinary will happen.

But, Sunday afternoon might be a different story. If you’re willing to do the research to answer your own question, then try this. Check your trading platform to see what time it typically opens on Sunday. Shortly after that opening time, pull up a tick chart of the EUR/USD, scroll back to the Sunday opening and find the widest spread. (You won’t be able to scroll back very far — 2 hours, maybe — because tick charts just can’t accommodate a very long look-back period.)

It’s not unusual for [I]prices[/I] to spike on the Sunday opening, as brokers make abrupt adjustments in order to catch up with the market, after being closed for 44-48 hours. Remember, retail brokers were closed over the weekend, but the market wasn’t.

In addition to price spikes, there can also be spikes in [I]spreads[/I] at the Sunday opening.

For this reason, most of us never hold positions over the weekend.

3

ah thanks for the reply clint!

Well i currently have a chf jpy trade on and my SL is around 80 pips.

so i was wondering if that is enough to accomodate the average gap that might occur over weekend.

one qns though, lets say i have a SL placed and price happen to gap through it. will my stop be executed at worst price?

or will it totally get missed out?.

thanks!

4

If there’s a gap-opening (against you) on Sunday, it probably will be less than 80 pips.

But, suppose the gap indicates the short-term bias in the CHF/JPY. In other words, suppose the market gaps 50 pips against you on the open, and then trades another 50 pips in the same direction. Then, you’re stopped out at -80 pips, and for what?

Since you know that a gap is possible, why are you holding a position over the weekend? Isn’t that just about as risky as holding a position during NFP?

It sounds to me like you’re willing to roll the dice with the weekend gap:

if it gaps in your favor, you grab some pips that you would have missed otherwise

but, if it gaps against you, you’re just hoping that it won’t cost you any more than 80 pips.

…one qns though, lets say i have a SL placed and price happen to gap through it. will my stop be executed at worst price?..

That’s a question for your broker to answer, not me. And, if you call and ask your broker, be prepared for a very hedged and qualified answer. They will probably use phrases like “depending on market conditions”, etc.

I don’t know whether you watched your platform close today, as I suggested. But, I watched the FXCM platform close on a tick chart, made some notes on the chart, and took a screen-shot of it. Here’s how FXCM closed for business today:

1280×877

Going back to the question in your original post, you can see that nothing extraordinary happened to the spread in the minutes prior to the close of FXCM’s platform.

But, notice the end-of-day/end-of-week squaring-up that FXCM did 53 minutes after the close of trading. Looking at the chart, you’d never guess that 53 minutes went by, between the last 2 ticks. I happened to be watching this chart when the last tick occurred at 4:53pm. It surprised me, so I checked the time with the clock on my desk.

There’s nothing particularly sinister about this squaring-up. I simply point it out as an interesting factoid. The adjustment was well within the narrow range that price had settled into in the final 6 seconds of trading — and, therefore, it likely did not trigger any resting orders (TP’s and SL’s).

Anyway, good luck with that CHF/JPY trade on Sunday. And, in the future, you might want to consider stepping out of the market over the weekend. If you’re trading real money, being out of the market from Friday to Sunday will keep you from worrying, and help you sleep like a baby.

5

Hi clint, thank you very much for your detailed anlysis and explanation.

Yes i am convinced now that it would be best to close a trade and reopen them againthe following week.

Silly mistake on my part, nonetheless something to learn from!

Cheers! :smiley: