Why Is It Best Not To Have Open Positions Over Weekend
Never trade in situations where you don’t have control. – Paul Tudor Jones
This week opened with a big gap for GBP pairs (153 pips on GBP/Usd, 190 pips on GBP/Jpy, 72 pips on Eur/GBP). The reason behind this big move is considered to be the result of another poll about the Scottish Referendum. As I mentioned before, I don’t believe that the reason is important. It’s just for entertainment purposes as far as trading is concerned. What is important is a money management lesson that can be learned from the price move in GBP over this weekend.
Namely, the tremendous risk a short-term trader exposes himself to if he leaves open trades during the weekend. The fact that forex is a very liquid market and most of the time the Sunday night gaps are very small or nonexistent might give a trader a false sense of security. But as it is proven once again, complacency is very dangerous. It is my belief that the best way to protect your trading account and enjoy the weekend at the same time, is to close all positions on Friday night.