Should stock trades be left for the weekend?

In the world of finance and investment, the question of whether stock trades should be left for the weekend is a hot topic for many traders and investors. In this article, we will look at various aspects of this topic and try to answer it.

How exchanges function on weekends

International financial markets are usually closed on weekends, with the exception of cryptocurrency exchanges. Consequently, the prices of various securities remain fixed during this period. However, when a new trading session begins, they can change significantly. These changes can be influenced by many factors – from political events to natural disasters and man-made accidents.

While in the case of political events one can try to predict how events will unfold and take appropriate measures, with natural and man-made disasters, most often one can only hope for fate. Most traders, especially those who are just starting their career, focus on this uncertain factor, which often leads them to close their positions before the weekend. By doing so, they try to minimise possible risks arising from the unpredictability of events on non-working days.

For what term it is possible to open a deal?

A deal can be opened for any term at the trader’s discretion. There are no restrictions on its closing. If the need arises, or there is a probability of a change in the trend, the investor has the right to make a decision on early closing of the deal, which will help to avoid financial losses. But it should be taken into account that it will not be possible to close the deal on weekends.

Long-term positions, which are held for several weeks, months or even years, require careful calculations and well-thought-out strategy, which significantly reduces risks.

Speculators who work on short-term signals and open positions several times a day can face big losses if they leave a trade for the weekend. The beginning of a new trading week may lead to a sharp change in the trend, which will affect such a deal negatively.

Therefore, the decision to close positions before the weekend largely depends on the chosen strategy, trading tactics and general market condition.

What scenarios could develop for a deal left over the weekend

Before heading into the weekend, it is crucial to familiarise yourself with the news. At the beginning of the week, the market may be faced with major political or economic events. The emergence of such information can change the value of a stock dramatically, and often in an unexpected direction.

In this case, recommendations of experienced analysts, who have considerable investment experience and are able to foresee the development of events, will be useful. As practice shows, they are often right about critical market situations.

Those who do not have sufficient trading experience should not count on luck and put their funds at risk. It is better to be safe and close a trade at the slightest doubt, which will reduce potential losses.

Although sometimes the appearance of news on the weekend may not affect the market much. In this case, the price may change direction slightly before returning to the established support and resistance levels. For investors without leverage, this will only result in a small drawdown, while leveraged traders can quickly lose all their funds.

When choosing trading positions for the weekend, it is necessary to take into account not only potential events in the world news, but also your financial resources. In particular, it is important to assess whether your deposit will be able to cope with possible losses if any negative information arises at the beginning of the week.

When to leave trades over the weekend

Numerous experienced traders, investors and analysts recommend holding open positions over the weekend only in certain situations:

• If there are clear signals that the current trend is continuing. Technical analysis should not be neglected, as a small error in calculations can result in serious losses.
• If no significant economic news is expected at the beginning of the week. If serious summits with discussion of key issues are planned for the weekend, it is better to close positions.
• If the trader has a profit on the deal. However, if the position is at a loss, many advise to close it in order to save most of their funds.
• It is important to consider the general mood of the market. If there are signs of a possible trend reversal or its slowdown, it is advisable to close the deal before the weekend. The history of trading knows examples when the crowd changed the direction of the trend in a matter of hours or even minutes.

You should not rely on stop losses. If you analyse the chart over a long period of time, you may find price gaps that often occur at the beginning of a new trading week. In such cases, the set loss limits may be ineffective and the trade will close when the balance reaches zero.

Be sure to remember that leaving trades over the weekend may result in the following risks:

1. UnforeseenEvents: Unforeseen events such as political crises, natural disasters and others may occur during the weekend that may affect the market. If you have left a trade for the weekend, you may miss the opportunity to react quickly to such events.
2. Technical Problems: During the weekend, there may be technical problems with trading platforms or internet connection, which may result in inability to execute trades.
3. Price changes: Theprices of financial instruments may change over the weekend, which may result in losses or lost profits if you do not follow the market.

On the other hand, leaving deals for the weekend can have advantages:

1. Time saving : If you leave trades to the weekend, you can save the time you would normally spend analysing the market and making decisions.
2. Stress Reduction: If you don’t follow the market on weekends, you can reduce the level of stress associated with constant price fluctuations.

Deciding whether to leave trades for the weekend depends on your strategy and the level of risk you are willing to take.

Here are some guidelines that can help you make a decision:

• If you are new to the market, it is better not to leave trades for the weekend, as you may not have enough experience to make the right decisions.
• If you are an experienced trader, you can consider leaving trades for the weekend, but only if you are confident in your strategy and are willing to accept the possible risks.
• Use market tracking tools: If you leave trades over the weekend, use market tracking tools such as news feeds, economic calendars and others to stay informed.
• Set stop losses: If you are leaving trades for the weekend, set stop losses to limit potential losses.
• Don’t leave large sums of money: If you leave large sums of money over the weekend, it can lead to significant losses if the prices of financial instruments fall sharply.

In conclusion, the decision whether to leave trades for the weekend should be based on your strategy and the level of risk you are willing to take. If you are not confident in your knowledge and experience, it is better not to leave trades for the weekend.