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Forex markets, or foreign exchange markets, have a significant global reach underpinned by international trade and commerce. Despite their worldwide operation, they are not available for trading 24/7. This article aims to show why the forex market closes over the weekend and whether you can trade forex during this time. We’ll also look into alternatives, such as weekend cryptocurrency trading.
Can You Trade Forex on Weekends?
You can not trade forex on weekends because all forex brokers turn off trading on Friday night. However, some forex brokers such as Exness or XM allow only cryptocurrency trading during the weekend. Unfortunately, other CFDs such as forex, indices, commodities, equities, bonds, and ETF CFDs traders can not trade on weekends.
Forex markets operate five days a week, opening on Monday morning in Asia (Sunday evening in the U.S.) and closing Friday afternoon in the U.S. (Saturday morning in Asia). This schedule stems from the ‘working hours’ of global banks and financial institutions which handle forex transactions.
The trading week begins in Sydney, Australia, then moves across the globe through Tokyo, London, and finally, New York as traders begin their workday. This rotation enables traders to trade forex pairs continuously during the week.
However, all these financial institutions close on the weekend, bringing forex trading to a halt. This pause is why you usually cannot trade forex pairs on the weekends.
Weekend Trading Limitations
The primary reason behind the weekend closure of forex markets is the lower trading volume. With most major banks and businesses closed, liquidity – the ease with which assets can be bought and sold – is significantly reduced. This situation can create wider spreads between currency pair prices and increase the risk of slippage when market orders are filled at a different rate than expected.
Also, the potential for unexpected events or news breaking over the weekend could lead to sharp price movements when markets open again. Traders refer to this as a ‘gap’ in the market. Given these risks, most forex brokers turn off trading over the weekend to protect themselves and their clients.
Let us see a few examples:
For example, the above is presented screenshot where trading time is explained for cryptos on the HF Markets website. At HFM, you can not trade cryptos on weekends. The HFM Metatrader Platform, utilized for Foreign Exchange trading, operates between Monday 00:00:51 and Friday 23:59:59 as per Server time. The Server time is adjusted according to Daylight Saving Time (DST), which is in effect from the last Sunday in March to the last Sunday in October. Server time follows GMT+2 during the winter months, whereas in the summer (DST), it changes to GMT+3.
Cryptocurrency Trading Over the Weekend
While traditional forex trading is off the table, weekend trading is possible through cryptocurrencies. Since cryptocurrencies operate independently of traditional banking systems, trades can be executed 24/7, including on weekends.
Some forex brokers like Exness and XM have adapted to this unique feature of cryptocurrencies, offering weekend trading for these digital assets. Traders who want to continue their activities over the weekend might find this option appealing.
However, it’s essential to note that trading cryptocurrencies come with its own set of risks. The volatility of cryptocurrencies is generally much higher than that of forex pairs, meaning the potential for profit and loss is magnified. Investors must be comfortable with this risk before deciding to trade cryptocurrencies.
Exness crypto trading during weekend
Exness is a well-established forex broker offering a variety of financial trading instruments, including forex pairs, stocks, commodities, indices, and cryptocurrencies.
Forex markets traditionally operate 24 hours a day during the five business days of the week. This is due to the global market, with different trading sessions opening and closing worldwide at different times. Hence, forex pairs and other CFDs, often tied to traditional financial markets, are available for trading five days a week.
Cryptocurrency trading at Exness (and most brokers that offer this asset class) is available 24 hours a day, seven days a week. This is possible because cryptocurrencies operate on decentralized blockchain networks, which are not bound by the traditional operating hours of any particular country or financial exchange.
See an example from the Exness website where you can trade crypto during the weekend:
XM crypto trading during weekend
XM is a reputable online trading broker offering various financial instruments, including forex, stocks, commodities, indices, precious metals, and cryptocurrencies. The broker is well known for its flexible trading conditions, tight spreads, and advanced trading platforms.
One of the critical features of XM.com is its 24/7 cryptocurrency trading. As cryptocurrency markets operate continuously without any central exchange’s opening hours, they are available for trading every day of the week.
VISIT XM- Zero Swap Product: XM.com can hold trades overnight without incurring swaps or rollover fees. This is particularly advantageous for traders who employ long-term strategies.
- Up to 1:500 leverage: Leverage is a loan the broker gives the trader to open more prominent positions with a small amount of capital. XM.com provides leverage of up to 1:500, meaning you can control a position of $500,000 with just $1,000 of your capital. But it’s worth noting that while leverage can magnify profits, it can also magnify losses.
- Going short/long according to market moves: At XM.com, traders can speculate on rising and falling markets. If you believe the price of a particular cryptocurrency will rise, you can go long (buy); if you believe it will fall, you can go short (sell).
- An attractive investment alternative besides Forex: Cryptocurrency trading is becoming a popular alternative to traditional Forex trading. With the volatility and potential for significant price movements, cryptocurrencies can offer potentially high returns, albeit with a high level of risk.
- Tight spreads and NO re-quotes: Spreads are the difference between an asset’s buying and selling price of an asset. XM.com offers competitive spreads, potentially allowing traders to profit with smaller price movements. The no re-quotes policy means that your trades will be executed at the price you see, not a new one, which could have been changed.
To trade with XM.com, one would need to create a trading account, deposit funds, choose the desired platform (like MetaTrader 4 or MetaTrader 5), and then can start trading.
See the screenshot from the XM website as proof that this broker allows crypto trading during the weekend:
VISIT XM
Mitigating Weekend Trading Risks
If you’re considering weekend trading, especially with cryptocurrencies, there are some strategies to mitigate potential risks.
- Stay Informed: Stay updated with the latest news about the cryptocurrencies you’re trading. Since news events can influence the crypto market, being informed will allow you to anticipate potential price movements.
- Use Stop-Loss Orders: Stop-loss orders can protect you from extreme price movements by automatically selling your assets when they reach a specific price.
- Diversify Your Portfolio: Diversification can help mitigate the risk associated with the high volatility of cryptocurrencies.
- Leverage Sensibly: While leverage can amplify your profits, it can also magnify your losses. Therefore, it’s crucial to use leverage sensibly when trading cryptocurrencies.
Conclusion
In summary, while forex markets do close over the weekend, cryptocurrency markets offer an alternative for those interested in continuing trading activities. While ripe with opportunities, this avenue has risks due to high volatility and market unpredictability. Therefore, it’s crucial to be well-informed and employ risk management strategies to navigate the market effectively. Always remember the goal is to make profits and safeguard your investment capital.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
