Trades open trough the weekend, dangerous???

[cup243]

Hi, how dangerous is to leave a trade open trough the weekend??? I mean I know there could be a global event that would make the markets gap like crazy on Monday's open, but how likely is this???

What do you do regarding this???

Should I close a trade before the close on Friday, and reenter at the open paying an extra spread???

Thanks

 

[Zack45]

You have to decide what kind of trade you have open.Scalpers and day traders should close, stay with what you know.Swing and position traders don't even blink, our stops are wider than almost any short term swing in the markets.Same goes for big announcements like GDP or NFP....I don't even get up to watch them..........

 

[cup243]

You have to decide what kind of trade you have open.Scalpers and day traders should close, stay with what you know.Swing and position traders don't even blink, our stops are wider than almost any short term swing in the markets.Same goes for big announcements like GDP or NFP....I don't even get up to watch them..........

I trade reversals after the price reacting with a trend line, with stops at only -15 pips (I do very high risk reward ratios). However on average, on Friday's close, I should have an overage of around 20 pips, so that's a gap of around 35 pips.

Do you think I should close on Friday? How often something happens during the weekend that makes the markets to take a considerable gap??? Thanks

 

[Aesop20]

Probably quite hard to judge, I've not done it personally and i have similar stops to you.. if anything i tend not to do a whole lot of Fridays

 

[candle7779]

I don't like trading on Fridays. There are two reasons of this fact. From one hand because it's quite diffucult to concentrate on work before weekends, and from the other hand it's rather dangerous for me as a newbie.

 

[jefx68]

If you are worried about the market gaping on the Sunday open, you could go flat (go long and short so you are hedged) into Friday. This way you would be locking in any profits on Friday.

 

[malaguti]

If you are worried about the market gaping on the Sunday open, you could go flat (go long and short so you are hedged) into Friday. This way you would be locking in any profits on Friday.

so if it does gap up, you are left with a loss as you have a short position open..:smart:

 

[jefx68]

so if it does gap up, you are left with a loss as you have a short position open..:smart:

Your equity would remain the same (- the spread). Just make sure you are using a broker that offers hedging or a US broker that offers netting capabilities.

Example, you cannot hedge or get netting at FXCM US, but you can at FXDD US.

 

[malaguti]

Your equity would remain the same (- the spread). Just make sure you are using a broker that offers hedging or a US broker that offers netting capabilities.

Example, you cannot hedge or get netting at FXCM US, but you can at FXDD US.

yeah I got that, but now you have 2 positions open, 1 long (now in profit) and 1 short (now in a loss) so you have incurred 2 charges going into the weekend and you have to close the short right? Cant keep it open. So you need to bank the loss.
Price starts going down now to close the gap, want you gonna do then? all of a sudden you've just banked a loss to keep a profit thats now going down..
So now you need a strategy for not keeping it open over the weekend but for what to do with your unwanted "hedged" trade afterwards..not as simple as just hedging..you must be doing this, or else im sure you wouldnt be advising it...so how have you handled that?

 

[jefx68]

yeah I got that, but now you have 2 positions open, 1 long (now in profit) and 1 short (now in a loss) so you have incurred 2 charges going into the weekend and you have to close the short right? Cant keep it open. So you need to bank the loss.
Price starts going down now to close the gap, want you gonna do then? all of a sudden you've just banked a loss to keep a profit thats now going down..
So now you need a strategy for not keeping it open over the weekend but for what to do with your unwanted "hedged" trade afterwards..not as simple as just hedging..you must be doing this, or else im sure you wouldnt be advising it...so how have you handled that?

I wasn't advising it, some brokers don't even allow it and there are too many variable to just say to hedge it.

Hedging just helps reduce your risk exposure i guess. Example .. if i am long EUR/CHF from the 1.20 floor peg, but i am worried that the peg wont hold and the SNB not following through with their commentary, so i throw a short position on at 1.20. Then i place a stop loss on the short position at 1.2050. If it pops to 1.2200 i am in the money by net +150 pips then I liquidate the long. If the SNB just let it go and it drops to 1.15, then i am flat (- both long and short spread) and would just liquidate both positions.

 

[forever_young]

I would just set SL, if there is no any sign of big changes. However it would be dangerous on the market with high volatility and with broker with often gaps and slippage... So in this way it's cheaper to close now the order and open buy limit\sell limit (at specially for EURUSD, where spreads are tight).