Just Because Trading is Closed, It Doesn't Mean You Have to Be

By DailyFx | December 15, 2011 AAA

Just Because Trading is Closed, It Doesn't Mean You Have to Be

By James Stanley

One of the greatest aspects of the FX Market is that it is a true 24 hour a day market. As business is closing at 5:00 PM Eastern Time in New York during the business week, Sydney is preparing to open for the day; and then Tokyo; and then London; followed by the US. As a speculator in the FX Market, I have access to all of these market centers through my trading platform.

Traders wishing to speculate at all hours of the night can certainly do so. This allows traders to arrange their schedules and working hours around the commitments in their lives; whether that be taking care of children or working at a 'day job.' For traders like me that think about prices and charts all day, this can become a comfort blanket.

Can't get to sleep?

That's ok; the Trading Station platform has 63 currency pairs with prices moving. Sleep can wait.

You have plans with a friend, and they cancel?

Who cares? Charts can furnish a much more productive use of time, even if it's just practicing on the demo.

The benefit of this relationship can also be a challenge. After getting acclimated to constant opportunity; of continuous access to the largest market in the world, those periods in which I cannot trade become especially torturous. And on most retail FX platforms, that time is the weekend.

But just because trading is closed - it doesn't mean you have to be. This is where practice can come into play. The weekends are opportunity; an opportunity to prepare for, and strategize around the week ahead.

Below is a list of potential activities for the Weekend Warrior; the trader that doesn't want to take weekends off.

Education

This is one of the more common ways to spend trading time over weekends when most FX brokers are closed for trading. Many education services are open while trading may be closed, and this allows traders to access materials for weekend study.

For example, the DailyFX Education team offers an On-Demand Video Course that is available 24 hours a day, 365 days per year. Any trader with access to DailyFX PLUS can access the On-Demand Course for weekend study.

Many traders may feel they are comfortable with the concepts presented in the On-Demand Course or any other educational offering.

I encourage you to revisit these materials. Trading education can work much like education in general, in which the more experience and knowledge that we have gained can drastically enhance the manner in which we perceive the material.

I recently re-read Moby Dick by Herman Melville, and was able to understand the book on an entirely different level than when I had read it in 7th grade.

When I read the book in 7th grade, it was a story about a man and a whale. After re-reading as an adult, I can understand the layers of symbolism intended by Herman Melville. The book is now entirely different after I was able to incorporate these elements and appreciate the work for the masterpiece that it really is.

For those traders that don't yet have access to DailyFX PLUS, you are certainly welcome to sign up for a trial at the below link. You can request and sign-up for a trial to DailyFX PLUS from the box located to the bottom, right of the page under 'Free Forex Trading Signals Demo Account."

DailyFX PLUS Demo Sign-Up

DailyFX PLUS On-Demand Video Course

Manual Back-Testing

This is my personal favorite activity to fill time on the weekends. The process of Manual Back-Testing involves 'simulating,' a market environment of past, historical prices.

This can function as an excellent way of testing a strategy before actually employing it in live conditions. The process of Manual Back-Testing involves literally scrolling to an earlier date and time on the chart (to a period in which you are unfamiliar with price action), 'locking the view,' and scrolling forward one candle at a time to 'simulate,' price action.

The Trading Station 2 platform is built with this capability in place, by default.

Now, an important note is in order: Just because a strategy performed in a particular manner in the past, it doesn't mean that it will perform in that way in the future. The goal of Manually Back-Testing is to simulate the variability that happens when we trade live, the fact that nobody knows what the next tick is.

If you would like more information on Manual Back-Testing, the article I had authored 'Manual Back-Testing; Practicing the Art of Trading,' should help with some additional information.

Manual Back-Testing; Practicing the Art of Trading

Important Note: The Trading Station 2 Application is closed on many weekends so that FXCM can perform server maintenance. For those times in which Trading Station 2 isn't available, you are more than welcome to use any of the free charting packages from DailyFX, available at the link below:

http://www.dailyfx.com/charts/

Strategizing for the Week Ahead

One of the benefits of trading being closed is the fact that it allows us, as traders, to take a step back to evaluate the week that has just passed. This can be a phenomenal time to account for the week's trading activities and grade performance.

Many traders keeping and following a 'Trading Plan,' may use this time to review, edit, and modify their plans based on recent observations. If you don't yet have a Trading Plan, the weekend can be a great time to build one. The article linked below can certainly help in that process:

The Trader's Plan

For traders that are already comfortable with their plan, they can look to the week ahead in an effort to best focus their approaches given the expected economic docket. The DailyFX Economic Calendar allows for traders to organize events based on release date, importance, and currency pair. Below is an example of a filtered Economic Calendar. In this particular case, I am only looking at European, Japanese, and American economic releases deemed of 'high importance.'

The filter button, located to the top right of the calendar, includes the areas with which I can specify what data I want to see.

Just_because_trading_is_closed_body_Picture_1.png, Just Because Trading is Closed, It Doesn't Mean You Have to Be
Source: http://www.dailyfx.com/calendar/

By analyzing the scheduled slate of announcements, I can begin building in expectations for which strategies might be operative given the expected news. The economic calendar is another service that is available around-the-clock, 365 days a year whether trading is open or not.

You are more than welcome to navigate there from the link below to begin strategizing for the week ahead.

http://www.dailyfx.com/calendar/

--- Written by James B. Stanley

To contact James Stanley, please email Instructor@DailyFX.Com. You can follow James on Twitter @JStanleyFX.

To be added to James' distribution list, please send an email with the subject line "Notification," to Instructor@DailyFX.com.

Research Referenced in this article:

DailyFX PLUS On-Demand Video Course

Manual Back-Testing; Practicing the Art of Trading

The Trader's Plan

"What is the Number One Mistake Forex Traders Make?"

"When is the Best Time of Day to Trade Forex?"

DailyFX PLUS Demo Sign-Up

DailyFX PLUS On-Demand Video Course

http://www.dailyfx.com/calendar/

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