Weekend trading with binary options allows traders to trade seven days a week. Weekend forex trading has been possible for a while – with no central market, exchange rates can be traded wherever global markets are open. This article explains weekend trading in detail and how you can succeed in weekend trading online.

This article answers the following questions:

  • Can I trade on weekends?
  • Why trade on the weekend
  • Limitations of weekend trading
  • Strategy

With this information, you will be able to succeed in your weekend trading with binary options.

 

 

Can I trade on weekends?

Most binary options traders intuitively assume that they cannot trade binary options on the weekend – which is a misconception. Of course, the Western world provides every indication to support this thesis. Fortunately, there is more than just the Western world.

Other cultures have different work weeks. As a result, their stock exchanges are open on different days of the week. For example, in the Middle East, the workweek runs from Sunday to Thursday in some places and Saturday to Wednesday in others. Stock exchanges follow this model.

To trade binary options, you need an open stock market. As the market moves, you can make predictions about where it will go. As long as there are some open markets in the world, you can trade binary options.

The Middle East alone is enough to warrant an open market over the weekend. With some stock exchanges open on Saturdays and some on Sundays, the weekend is full of trading opportunities.

Traders who prefer to trade currency and commodity based binary options can use weekend trading to follow the trend they found on Friday or accomplish other trading goals. Currency pairs are not traded on a central exchange, as long as there is at least one major market open (Hong Kong, Sydney, New York, etc.) the exchange rate can be speculated on. There are even courses in special ‘weekend effects’ trading strategies – highlighting the popularity.

Top weekend broker

 

Why trade on weekends?

There are three main reasons why traders choose to trade on the weekend. They are:

  1. Weekends provide the ideal trading environment for several strategies. When only a few Asian markets are open, it behaves differently than when most of the European and American markets are open. Different market environments help some traders execute their strategies better than any other market environment. We will cover a few of these strategies later.
  2. More trading time means more profit. With a profitable strategy, more trading time means more profit. Traders with free weekends can use binary options as a beneficial alternative to TV and boredom. Dedicated traders can trade seven days a week.
  3. Some people can only trade on weekends. If you are busy on weekdays, weekends may be your only chance to make a few trades. With a broker that allows you to trade at your leisure, you have the opportunity to combine a career in trading with a busy schedule.

These reasons are the reason why so many traders enjoy the weekend trading opportunity. On the other hand, weekend trading also suffers from some limitations. To help you weigh both, let’s take a look at the disadvantages of weekend trading.

Limitations of weekend trading

While you can trade binary options over the weekend, there are some limitations. They are:

Limit 1: Only a limited selection of assets

At the end of the week, you can only invest in a limited selection of assets. Stocks and indices are traded at their home stock exchanges. For example, Google, Apple, and McDonald’s are American companies and are traded on the New York Stock Exchange. When the New York Stock Exchange is closed, you cannot trade binary options based on these assets.

At a time when only the Middle East market was open for business, you could only invest in their stocks and indices. For serious technical analysts, this shouldn’t be a problem – they’re just trading price movements anyway and don’t care about the underlying asset.

For traders who want to trade the news or want to know something about the assets they trade, however, this is a problem. They may be faced with a choice of stocks and indices they have never heard of before. This can be a tricky situation for some traders making weekend trading impossible.

These indicators are available for weekend trading:

  • DFM  Index (Dubai, United Arab Emirates),
  • Tel Aviv Index 25 (Tel Aviv, Israel),
  • Kuwait Stock Exchange (Kuwait),
  • Tadawul  Index (Saudi Arabia).

If you can work with these indicators, go ahead. In addition, brokers are starting to offer weekend access to a number of markets that were previously unavailable. For example, IG offers weekend trading on the FTSE, DAX and even US indices. Any “weekday” positions are left alone (so stops and open orders will not be processed) but the broker will offer new trades, from 8am on Saturday, until 10:40 p.m. Sunday. Other brokers are forced to follow suit.

Weekend Forex trading hours extend even further. With no central market, currencies are traded globally. When London stops trading, Hong Kong will still take the example. This means forex trading is possible 24 hours a day, for almost 6 days a week. At the end of the week the gold and oil trading markets are similar. However, during certain times, the volume will be very low. This leads to markets and flat charts.

Limit 2: Different time zones

Each stock exchange operates in its own time zone. Stock exchanges in the Middle East are far from the United States and many other places, which is why there are significant time delays. To trade the stocks and indices of these stock exchanges, you must account for these delays.

For binary options traders who prefer to invest in stocks and indices, this means a significant change in their trading habits. They may have to wake up in the middle of the night or at least trade at different times than during the week. If this is not possible or of no value to you, you should focus on trading stocks and indices on weekdays.

Limit 3: Broker trading time

Some binary options brokers close their trading floors on weekends. In their view, there are very few traders who want to spend their weekend doing technical analysis whose efforts are simply not worth it.

If you want to trade on the weekend, check your broker’s trading times or contact customer support. If your broker is closed for the weekend, there is nothing you can do but switch brokers. If weekend trading is important to you, check out our broker list for a few good tips.

Some brokers will simply reflect our market opening in question – most will remain open as the forex market for example. Tools like Metatrader 4 (MT4) will work on historical data or live data, but only when the market is open.

 

 

Strategy

The market environment is different during weekend trading than during the business week. While this does not mean that you need completely new strategies, you must understand the unique characteristics of the market and combine them with the right trading strategies.

Here are three strategies that can help you do just that.

Strategy 1: Gap at the end of a trade in currencies

Closing Gap Trading requires an ideal market environment for the weekend. By trading currency exhaustion gaps at the end of the week, you get the best environment for this type of strategy throughout the week. Weekend gap trading on forex is a popular system.

Gaps are price jumps. From one stage to the next, something forcefully moves the market, causing the price to jump from one price level to a higher or lower level while ignoring the price in the middle.

Gaps happen for a number of reasons. For example, they can be the result of starting new movements or speeding up movements. But these gaps require a high volume of transactions. To initiate or accelerate movements, many traders must support the change. Otherwise, it will quickly run out of power. At the end of the week there are simply too few traders around for these types of gaps.

At the weekend, the big Western bankers are at home. Most day traders are out with their families, and small investors take a break. Without these key players, starting new movements would be impossible. You are more likely to see gaps closing.

Gaps close when only a few traders make them. Sometimes, a small number of people invest in the same direction, either by coincidence or because they are all drawn to the same sign. The market jumps up or down, and the rest of the traders are confused. They see progress as a mistake, believing that the new price is too high or too low, depending on the direction of the gap. These traders will immediately invest in the opposite direction, trying to profit from the mistake.

  • In case the gap goes up, traders will sell their assets. The market will fall and close the gap.
  • In case the gap goes down, the trader will buy the Market will rise and close the gap.

When you find gaps in a low volume market environment, there is a high chance they will close. The weekend is a low volume trading environment, making it the perfect time to trade this strategy.

Knowing that a gap will close, you have everything to trade binary options with high payouts.

  • You know the price target. The market will move roughly until it reaches the price of the first candle that makes up the gap. After the gap goes up, it will probably fall to the high of the first candle; after the gaps go down, it will probably rise to the low of the previous candle.
  • You know the expiration. The market is likely to hit the target price in the next period. Only for extremely short periods of time, you should consider choosing a longer shelf life.

With this information, you can trade the high/low option, but you can also invest in a one-touch option, which generates a higher payout. Choose an option with a target price inside the gap and an expiration shorter than a period of time. If your broker does not offer such an option, choose a high/low option with an expiry of a period of time.

We recommend using this strategy with currencies or commodities. With most of the world on holiday, you know that trading volumes for these asset classes are lower on weekends than during the week. On the other hand, the Middle East stock market can still be high volume as traders in these countries are still working. As a result, the Western weekend has little effect on trading volume.

Strategy 2: Breakout Currency Trading

This strategy uses a similar philosophy to the first but adapts it to different market phenomena – breakouts and pullbacks. A breakout occurs when the market completes a price formation or breaks a resistance or support level. At these prices, many traders place orders in the same direction, resulting in fast, strong movement.

To start a sustained, breakout movement requires a high volume of trading. When volume is low, the breakout lacks the support of the majority of traders. Not enough confidence in the movement, which drives traders to invest in the opposite direction and bring the market back – this movement is called a pullback.

For example, suppose that an asset is stuck in a sideways price channel. It has tried to leave the channel a few times before, but every time the market approaches the upper or lower boundary, it turns back.

At the end of the week, the market tried to break out of the formation again. This time it moved over the boundary. During the week, this event could end the formation and start a new movement. But at the end of the week, the trading volume of currencies is so low that it is more likely that the market will turn back.

In general, reliable breakouts are accompanied by a high volume. Movements beyond the boundaries of the formation accompanied by low volume can be a false signal. At the end of the week, the possibility of false signals is so high that it makes sense to predict a drop for each payout.

You can trade pullbacks in a number of ways. These ways are:

  1. With high/low options. When you find a breakout at the end of the week, invest in a high/low option predicting that the market will turn back inside the formation. Use expires about 2 to 4 hours. For example, on a 10 minute chart you would use 20 to 40 minute expiry. This strategy may give you a higher percentage of your trades, but it produces a relatively low payout per winning trade. We recommend this strategy to risk-averse traders.
  2. With one-touch options.You win a one-touch option when the market hits the predefined target price. After the weekend breakout, you can use the boundary of the price formation as your target price. The market is likely to pull back at least for now. Using the longest still gives you a target price in this range and you have a good chance of winning the trade. This strategy is a bit riskier than using the high/low options, but it will get you a higher payout. We recommend it for traders who want to take a little more risk.
  3. With ladder options.Ladder option is a combination of one touch option and high/low option. They determine a target price and you can predict whether the market will trade above or below this price when your option expires. When you find a breakout at the end of the week, you can use laddering options to predict that the market will soon trade within the boundaries of the formation again. Using Expires Between 2 and Four This is the riskiest of these three strategies, but it is also the one that generates the highest payouts.

Each of these three strategies can work equally well. Choose the one that best suits your character.

Strategy 3: Trade Bollinger Bands with Currencies

The Bollinger Bands define a price channel from which the market is unlikely to leave. At the end of the week, this price channel produces exceptionally accurate predictions, making it the perfect basis for a trading strategy.

Bollinger Bands consist of three lines:

  1. A midline. A 20 period moving average.
  2. One line above. Moving average plus twice the standard deviation.
  3. One line lower. Moving average minus twice the standard deviation.

The lower line acts as a support, the upper line as a resistance. The midline can be either support or resistance, depending on whether the market is currently trading above or below it. In general, the market is likely to turn around when it approaches the Bollinger Bands.

Bollinger bands can be a great help at any time of the week, but they work even better on weekends. During the week, unexpected news can change the market environment and many active traders can start new movements or end old ones at any time. Therefore, the transaction range is more variable.

These events are not inherently bad, but they make the use of Bollinger Bands more difficult. As the standard deviation changes, so do the upper and lower Bollinger bands. Strong movements up or down will lengthen the Bollinger Bands and carry their boundaries on the move. Predictions made on these bands will quickly become useless.

At the end of the week, low volume makes the market much more even. The probability that a large group of traders will join a movement and suddenly change the market environment is much lower, which makes it easier and more accurate to use Bollinger Bands.

Here’s what you do with this strategy:

  1. Create your chart. Select an asset, open the price chart, apply bollinger bands.
  2. Wait for the market to approach a Bollinger Band. Wait until the market moves close to one of the three lines of the Bollinger Bands.
  3. Predict that the market will turn around. Investing in a high/low option predicts that the market will fail to break the bollinger band.

This strategy is very simple. Even novices can immediately implement it.

Conclusion

Weekend trading with binary options offers unique opportunities in a unique market environment. To take advantage of weekend trading, you need a broker that offers these trading times and is willing to trade currencies and commodities or stocks and indices from the Middle East.

You can trade stocks and indices from the Middle East with typical binary options strategies. However, when you decide to trade currencies and commodities, you have to adjust your strategy with significantly lower trading volumes at the end of the week. There are enough opportunities to make a trade over the weekend that are worth working on and reading up on.