Traders need to think about holding trades over the weekend in the forex market. This is especially important for those using My Funded FX accounts. Traders keep positions open from Friday’s market close until Sunday’s market open. This can expose them to unique market conditions and risks.
In this blog, we will answer the question if you can hold trades over the weekend with My Funded FX.
How Does Forex Market Work?
The forex market is the biggest and most liquid financial market worldwide. In this market, people buy, sell, and exchange different currencies. The exchange rate determines how much one currency is worth compared to another. It operates 24 hours a day, 5 days a week, with trading volumes exceeding $6 trillion per day.
No single entity controls the exchange rates or sets the prices of currencies in the forex market. It is highly decentralized. It is dominated by a global network of computers and brokers from around the world.
The market is made up of two levels—the interbank market and the over-the-counter (OTC) market. The interbank market is where large banks trade currencies for purposes such as hedging.
Let’s take a look at some common terms:
- Price: The value of one currency relative to another. This is determined by supply and demand forces in the market.
- Swap: A fee charged by forex brokers for rolling over a position overnight.
- Profit: The financial gain made from a forex transaction.
- Risk: The potential of losing money on an investment.
- Equity: The value of a trader’s account, including open trades.
- Slippage: The difference between the expected price of a trade and the price at which the trade is executed.
- Fees: Costs associated with forex trading, including spreads, commissions, and overnight financing charges.
The forex market has high liquidity and diverse trading options. It’s accessible and has low transaction costs. However, the forex market has drawbacks like high volatility and the risk of leverage. It also faces high competition. Various factors influence the forex market, such as economic data, geopolitical events, and central bank policies. Traders must understand these factors and how they affect currency values.
Is Holding Positions Over Weekends Profitable?
Holding positions over weekends with My Funded FX account can be profitable. Yet, it is important to consider the risks and potential outcomes. On average, only 1 out of 4 trades is profitable after the weekend gap.
Trading on weekends comes with special challenges like market gaps, wider spreads, and less activity. To determine whether holding positions over weekends is profitable, consider the following factors:
- Risk Management: Implement a risk management plan to minimize losses and maximize profits.
- Trading Strategy: Choose a trading strategy that aligns with your risk tolerance and market conditions.
- Gap Risk: Be aware of the potential for market gaps, which can lead to losses or gains.
- Spreads: Monitor spreads closely, especially on Friday evening and Sunday evening, as they may widen and impact your positions.
- Liquidity: Be aware of lower liquidity during weekends, which can lead to increased volatility and wider spreads.
- Profit Objectives: Close positions before the weekend if the price is close to your profit objective.
- Stop Losses: Set stop losses at least 40 pips away from the current price to account for spread widening.
Holding positions over weekends might make money, but you must think about the risks. To succeed, have a smart trading plan, manage risks well, and stay aware of market conditions.
Can You Hold Trades Over the Weekend with My Funded FX?
There are no weekend holding restrictions during the challenge or simulated prop trading phases.
Is Simulated Trading Crypto on the Weekends Allowed?
Yes! You can trade cryptocurrency on weekends! MyFundedFX currently offers simulated crypto trading on weekends.
About My Funded FX
MyFundedFX is a prop trading firm that offers traders up to $600,000 in simulated funding. The company offers a simulated trading environment where live market trading isn’t involved. If traders pass the assessment, the company gives them a live simulated account to trade in a live simulated environment.
MyFundedFX provides a two-step evaluation process. It includes a demo account and a verification account. Traders can trade all available instruments, and their trading style is completely up to them, subject to certain rules and objectives. The company doesn’t give advice or recommend actions based on the information and materials provided.
MyFundedFX is committed to ensuring informed and compliant trading practices and has a privacy policy accessible on its website. The company reserves the right to suspend, replace, modify, amend, or terminate its agreement at any time and within its sole and absolute discretion.
