Weekend Trading With Binary Options

Binary options weekend trading allows traders to trade seven days a week on certain instruments. With markets like cryptocurrencies and some weekend versions of indices open across Saturday and Sunday – there are opportunities outside of traditional hours. However, weekend trading comes with considerations owing to lower trading volumes and potentially smaller payouts.

This beginner’s guide explains the best markets for weekend trading, the benefits and drawbacks, plus top tips. We also reveal the best binary brokers for trading on the weekend.

Best Brokers For Weekend Trading

We’ve tested each of these binary brokers during weekend trading sessions and they stand out as the best, providing opportunities across Saturday and Sunday:

Benefits Of Weekend Trading

Firstly, why should you swap a relaxing day out for trading binary options online over the weekend? Perhaps for any of the following reasons:

• Profit potential – You have two extra days to trade during the weekend. That’s two additional days to generate more earnings. If you’ve not had such a good week, the weekend gives you an opportunity to try new setups.
• Time – Trading on the weekend allows you to trade multiple currency pairs, for example, and still have plenty of time to evaluate each trade. On top of that, you don’t have to rush decisions, whereas in the week you may desperately be trying to get in and out of the market at certain price points.
• Strategies – During the weekend when the markets are on pause, you have the time to develop more complex trading strategies. In addition, some trading plans will perform better on the weekend. As a result, certain strategies could generate greater profits at the weekend vs in the week.
• Undivided attention – Understandably, many people work throughout the week. Therefore, finding the time to concentrate on trading too can be a challenge. This is why weekend trading gives you an opportunity to focus solely on your trade activity. On top of that, fewer distractions could result in enhanced trade decisions.
• Preparation – Weekend trading can be more than just entering and exiting positions. While most of the markets take a breath, you can conduct in-depth technical analysis. As a result, you could hone your strategy and be better prepared by the time the opening bell rings on Monday morning.

Drawbacks Of Weekend Trading

Despite the number of benefits, there are also certain downsides to trading binaries at the weekend:

• Reduced options – There are fewer instruments available for trading at the weekends. Many stocks, in particular, will be unavailable. However, crypto and forex weekend trading is often available, with the latter through over the counter/synthetic pricing.
• Weekend bias – There is a danger of carrying a weekend bias with you into Monday. For example, you may have tweaked your trading plan or be desperate to make up for a loss. If you’re not careful, this can result in an unprofitable Monday.
• Reduced volume – Low trading volumes can lead to problems, such as a reduced ability to validate price shifts and lower payouts on binary platforms. Furthermore, a lack of volume can lead to flat markets and unhelpful charts.
• Trading hours – Weekend binary trading may not suit your body clock. Some Middle Eastern markets, for example, can be active over the weekend. This means if you’re based in the West, you may have to be prepared to trade during anti-social hours.
• Liquidity – Without as many institutional and retail investors to take the other side of trades, markets are often less liquid. Reduced liquidity can then lead to an increase in volatility. The result of which can be less favorable pricing and payouts. This can make generating profits even more challenging.

What Markets Can You Trade At The Weekend?

Cryptocurrencies

Weekend trading in cryptocurrency binaries is on the rise. Bitcoin and Litecoin are just two popular digital currencies that have binary options offered for them, but many binary brokers we’ve used on the weekends offer many more tokens.

Because cryptos are predominantly an internet creation, they can be effectively traded 24/7.

On top of that, some binary options brokers provide specific weekend options that start on Friday at the end of US trading and last until Europe’s opening on Monday morning. These options have even been carefully engineered to cover weekend events, including economic data releases from China and G-7 meetings.

Synthetics

Another option if you want sufficient volume and volatility is to consider trading synthetic products, like those offered by binary broker, Deriv. These custom products are not influenced by market liquidity and instead mimic the types of price movements and volatility real indices may experience.

They include products like Volatility 75 and Crash 150 and Boom 150, with price ticks coming in every second and crash/boom events around every N ticks (e.g. 150 ticks), offering frequent short-term trading opportunities even on weekend days.

Stocks And Indices

Many of the traditional instruments and markets you trade in during the week will be off the cards at the weekend. For example, the NASDAQ and other US stock exchanges are closed from late Friday to early Monday.

However, some parts of the Middle East have weekdays running from Sunday to Thursday and Saturday to Wednesday. The catch is that these aren’t available at many binary brokers from our research. In this case, you may want to consider a CFD broker, some of which offer seven day trading weeks and a range of local stocks and indices.

Some of the indices which provide the volume for trading in the weekends are:

• Tadawul Index – The Saudi Arabian index represents the largest economy in the region. As a result, this is one of the most popular indexes found amongst brokers offering weekend trading.
• Tel Aviv 35 – Previously known as the TA25, it is now formed of the 35 largest Israeli companies. Those interested in the IT and pharmaceutical industries could be well suited.
• DFM Index – Some of the most significant players in the United Arab Emirates can be found here.
• Kuwait Stock Exchange – The Kuwait economy is diverse. Therefore, this stock exchange hosts companies from the financial, insurance, and real estate sectors.

Now that Saudi Arabia has moved its workweek to align with neighbours, foreign traders now have better access than ever before. As they continue moving towards full access, liquidity may increase and weekend traders might benefit from greater profit potential.

Opportunities for weekend trading are only likely to increase as trader activity and trading volume grow.

Weekend Strategy

The first thing to note is yes, the weekends do effect trading strategies. Major market players are offline, leading to unusual dynamics over the weekend. As a result, volatility can spike and volume can diminish.

Fortunately, however, there are strategies that have been specifically developed for trading on the weekends. Below is one popular approach.

Trading The Weekend Gap

Gaps are simply price jumps. Something causes the price to shift either up or down while skipping the levels in between. Usually, gaps are a result of beginning new movements or accelerating movements. However, these gaps require significant trading volume. But due to major market participants being out of the game on the weekend, you don’t normally see these type of gaps. Instead, weekend trading can focus on closing gaps.

Gaps can close when just a limited number of traders create them. For example, some people may invest in the same direction, whether it’s by accident or not. As a result, the market will rise or fall. Many traders may then be unsure what is going on. Often they end up thinking the price has gone too high or too low. So, they try to profit from the apparent mistake by trading in the opposite direction.

• Upwards gap – An upwards gap will see traders sell their securities. The market may then drop and the gap might close.
• Downwards gap – In a downwards gap, traders will buy, the market could rise and again the gap might close.

Gaps sometimes close in low-volume markets, such as the weekends. This makes weekend gap trading an attractive strategy.

Strategy Implementation

Armed with the knowledge the gap may close, although there’s no guarantee, you can try and capitalize on market conditions. This is because you also know several key bits of information. Firstly, you have your price target, because the market may move until the price hits the level of the initial candlestick that makes up the gap. If an upwards gap, it could sink to the high of your first candlestick.

You also know the potential expiry. This is because you know the market is poised to hit the target price within the next period. Therefore, you can use a high/low option. Alternatively, a one-touch option may be suitable.

Also note, you could try an option with a price target inside the gap, plus an expiry shorter than a single period.

This is often thought of as a traditional forex weekend gap trading strategy. But in actual fact, this technique can be tried with binaries too.

Risk management is important when trading binaries on the weekend. Only trade a small amount of your balance per trade to protect against losses.

How Else Can You Capitalize On The Weekends?

If you’ve had a long trading week and you want a break from actually entering and exiting positions, there is a whole host of useful activities you can pursue on the weekends. Some of the best uses of time include:

• Back-testing – Using historical price data, you can simulate previous market environments to test a potential strategy. This is a good way to identify and remedy any problems before you put your plan into action on Monday morning.
• Performance analysis – Getting a moment to reflect in the middle of a busy trading week is often challenging to say the least. That’s why the weekends are a perfect time to sit down and go through your trading journal and recent performance. Where did you go wrong this week? What changes do you need to make to your current strategy? Did you let emotions drive your decision-making process?
• Risk adjustments – By conducting performance analysis, you can decide whether adjusting your risk parameters is sensible. For example, if your strategy is generating more consistent profits, perhaps you can increase your risk tolerance and position size, and vice versa.
• Future planning – Weekend trading can also consist of planning for the upcoming week. For example, is there any events coming up in your economic calendar that may impact share trading? If so, have a plan in place to capitalize on the price fluctuations they will trigger. As Benjamin Franklin asserted, “by failing to prepare, you are preparing to fail”.
• Education – Weekend day trading can also consist of immersing yourself in educational resources. There are now courses, webinars, books, ebooks, podcasts, as well as a host of useful websites available. All can be used to learn about a new strategy or build on your market knowledge.

Bottom Line

Although often overlooked, there remain opportunities for those looking to start day trading binaries at the weekends. Binary options are accessible from Friday evening to Monday morning, especially via products like cryptos and synthetics.

However, you will need to amend your normal strategy or employ a weekend-specific plan. Alternatively, if you don’t want to actually trade, you can use the weekends to further your trade education and prepare for the upcoming week.

FAQ