Weekend Trading: Tips, Strategies & What To Trade

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Updated: 26 August 2020

For traders who are seeking more opportunity to realise that extra bit of profit, weekend trading is just the ticket. Not only do you have more opportunity to trade, weekend trading also enables you to reduce risk by hedging your weekday positions. We’ll cover this and more in the following guide, including:

  • What weekend trading is
  • What you can trade on weekends…and how
  • Which brokers allow weekend trading
  • How to get started
  • Advantages of weekend trading

What Is Weekend Trading?

Weekend trading is being able to access and trade financial markets on Saturday and Sunday. Cryptocurrency markets offer weekend trading, as do some markets in the Middle East, while some brokers provide access to weekend trading on markets in Europe and the US.

Can You Trade on Weekends?

Yes, you can. Cryptocurrency markets are available to trade 24/7. However, the more traditional markets available to trade on weekends are limited. IG markets offer weekend trading on more familiar asset classes, while exchanges in the Middle East are open and available to trade if you can find a broker who provides the opportunity to trade them.

What Can You Trade On Weekends?

You can trade cryptocurrency markets on weekends, but there are also Middle Eastern equity markets that can be traded such as the Kuwait stock exchange, the DFM index, or the Tel Aviv 25 index. IG markets also offer the opportunity to trade the weekend GBPUSD, FTSE 100, Germany 30, Wall Street and Hong Kong HS50.

Which Brokers Allow Weekend Trading?

IG Markets offers weekend trading on more traditional asset classes Cryptocurrency brokers also offer the opportunity to trade over the weekend.

Weekend Trading

What Markets Trade On Weekends?

There are some markets in the Middle East that trade on weekends. These are the Tadawul index, the Kuwait stock exchange, the Dubai stock exchange, and the Tel Aviv 25 index. Some brokers also offer other weekend markets that trade separately to their weekday counterparts.

How To Trade on Weekends

To trade weekends you will need to open an account with a broker that offers weekend markets. Alternatively, you could trade cryptocurrencies which are available to trade 24/7. There are a variety of cryptocurrency exchanges and brokers that you can choose from.

What Can You Trade Over The Weekend?

In some territories, weekend trading is readily available. Trading in the Middle East, for example, often runs from Saturday to Wednesday.

The major indexes open on the weekend are:

  • Tadawul Index – Saudi Arabia
  • Kuwait Stock Exchange – the national stock exchange in Kuwait
  • DFM Index – based on the Dubai stock exchange
  • Tel Aviv 25 Index – the top 25 companies in the Tel Aviv Exchange in Israel.

But, you will be hard-pressed to find a broker in Europe or the US who will offer you the ability to trade these markets

So, what about trading markets we are more familiar with, with brokers in our regions

Well, some well-known brokers offer weekend trading. If you take a look at IG, you will see that they offer a weekend market on the GBPUSD. They also offer weekend markets on various well-known indices such as the weekend FTSE 100 and the weekend Dax.

However, it is crucial to note that these markets are separate from their weekday counterparts and IG will price them based on volatility, liquidity and news over the weekend.

What Markets Trade On Weekends?

What Are The Advantages Of Trading On The Weekend?

Outside of having access to additional trading opportunities and potential for extra profits that come with it, there are a couple of key advantages to be aware of:

  • Flexibility – More time to focus and analyse the markets
  • Hedging – Reduce your weekday risk

Flexibility

For example, you may have more time over the weekend to focus on the markets, helping you to make better trading decisions. Essentially, you can analyse the various assets in peace. This ties into the fact that the weekend gives you the flexibility and option to trade if you simply cannot do so during the week.

Hedging

Hedging is defined as an investment that reduces the risk of adverse price movements in an asset. It consists of taking an offsetting position in an asset.

Now, that can be a little difficult to understand, so let me give you an example

Let's say we hold a buy position in the GBPUSD on Friday, and we hold it past the weekday close. Then, on Saturday morning news comes out that there will be no trade deal between the UK and the EU.

Well, as the weekend GBPUSD and weekday GBPUSD markets are separate and separately traded, we cannot close our long position

But, we can use the weekend GBPUSD market on IG to hedge and sell the currency pair, offsetting our risk. A really great tool to use if it's available.

What Are The Disadvantages Of Trading On The Weekend?

On the flipside, weekend trading does have limitations.

Low volatility is definitely one. As it is the weekend, there will be little to no economic data being released, and financial or geopolitical news may be scarce, leading to minimal movement in price.

Low volatility also leads us to a reduction in liquidity for much of the same reasons mentioned above. The lack of news and data means there will be a minimal amount of participants in the market, and this will lead to another disadvantage which is wide spreads

Brokers will usually set their prices based on liquidity in the market. If there is a minimal amount of participants, then liquidity will be extremely low, and brokers will make sure their spreads are wider.

Our final negative is that naturally, there are fewer assets and limited instruments available on the weekend. Brokers, especially in the US and Europe, are not willing to provide a lot of assets to trade, and so your options will be limited.

There is also the time zone factor if you want to trade open markets. Nearly all of them are in the Middle or the Far East, so you may find yourself having to get up in the early hours of the morning.

Which Brokers Allow Weekend Trading?

Do We Recommend Weekend Trading?

In truth, we have to say that the potential costs and low liquidity associated with trading European and US markets over the weekend don't make it a good idea.

However, if you can find a good broker that offers you the ability to trade the open exchanges in the middle and far east, then why not!

But, in our opinion, that is rare, and we haven't seen a broker that offers those exchanges so far. So we feel the weekend is a perfect time to get to grips with new strategies or to educate yourself

Take some time to learn how to trade CFDs or any other instrument you're interested in, recap data or catch up on some weekly trend analysis.

In the long run, this will make you a better trader when there is real action in the markets during the week.