Risks of Weekend Trading

Risks of Weekend Trading

Most stock exchanges are open only from Monday to Friday and that too from 9:00 hours to 16:00 hours. However, there are a few stock exchanges that operate during the weekends because of the difference in the working hours in those countries and this has led to an increase in the number of weekend day traders.

Although weekend trading offers numerous advantages such as increased chances of making profit, less traffic, and few others, it also offers certain risks and limitations to its traders. This article presents to you a full review regarding the limitations of weekend trading.

  1. Different time zones – This is the most common limitation during the weekend trading. Although you are all set to make some money by switching over to a different time zone, your body may resist this urge because your internal body clock begins to shut down if you are residing in the US and is eagerly waiting to trade in the stock exchanges of the Middle East. Therefore, you will be forced to think twice before putting your health at risk.
  2. A lower number of assets – As you already know that most stock exchanges remain closed on weekends, you will be presented only with a limited number of trade instruments to trade with over the weekend. For example, all those traders who rely on assets and news for information are in for a big fix because big multinational companies such as Intel, Verizon Communications, Ford Motors, and others are all closed for the weekend, hence you cannot trade on these companies. However, traders those who rely on technical analysis while trading assets and study price movements before making a call in the trade market, are in for trading and will be able to generate some profit.
  3. Reduced volume of trade options – This is bound to happen as when a company in London closes, another in Hong Kong begins its operations. Similarly, traders are in for a jolt because the oil and gold markets are also similar. Hence, traders will face the problem of low trade volumes, which will ultimately result in charts with insufficient data points and flat markets.
  4. Increased volatility – The market functions because of volatility but what happens when normalcy is not maintained? Volatile over boils which is not a good thing when it comes to trading. Hence, this increases the risks involved in trading over the weekends.
  5. Fewer brokers hours – Despite all the existing troubles, you are faced with yet another challenge from the brokers who will ultimately decide whether to open their platform for trade or not based on the number of active traders over the weekend.

However, this list is just for your information so that you will be more cautious while trading over the weekends. Good trading strategies and the right opportunities will always help you keep going.

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