Traders usually find their targets getting hit or the trade closing right in front of their stop margin. But what should you do during the weekend? There are times when there is a favorable trade, and you don’t know whether to hold it during the weekend or not. It is a tough choice, but there is no surefire answer that will help. According to Forex Academy, it totally depends on your judgment and experience.
Wondering what Forex Academy is? Well, it is a news and research website on the Forex industry. It is the largest online news source for cryptocurrencies, metals, indices, and commodities.
Understanding the situation
Price action depends on the flexibility of the market. So, when you are in a dilemma to hold your Forex trade during the weekend or not, you should understand two things: your state of mind and the state of the trade. This will help to assess the situation better. Trading experts from Forex Academy suggest you should take all the factors into consideration before deciding.
1) State of trade
The state of the trade depends on a few factors, such as what type of trader you are, the overall trend, the price in relation to your target profit and stop loss, and if there would be any significant news during the weekend. Let’s break down these factors one by one.
Type of trader – if you are one of those scalper types, don’t hold your trade. Exit the trade before the weekend and wait for the market to reopen. Scalpers usually don’t trade for long periods. On the other hand, if you have a habit of trading weekly or monthly, then you can take the risk of holding the trade.
Market trend – what is the overall trend? It’s not always bad to go with the crowd sometimes. The Forex market operates 24 x 5. But the gap during the weekend can be favorable. So, always follow the market trend. Going against it may be riskier.
Price relation with target profit and stop loss – those who are already on the negative side with their trade, it would be wise not to hold the trade during the weekend. This will help to cut your losses. However, if you see that the price is closer to your target profit, you should go all the way to see where it closes at the end of the day. If the price doesn’t fluctuate, hold the trade. But make sure you keep an eye when the market opens next week.
Big event during the weekend – Forex Academy advises that you keep your eyes and ears open for any international event that might affect the market condition.
2) State of mind
Now that you know the state of trade, you should question your state of mind. This usually means how much you rely on your instincts while trading. Are you usually greedy when you see favorable trades? Do you follow what you note down in your trading journal? The thumb rule for Forex trading is you shouldn’t be greedy. Most importantly, you should avoid the mistakes that you noted in your trading journal.
If you can figure the balance between your state of mind and the state of trade, you will be able to decide whether to hold or leave the trade over the weekend.