Weekend gaps: what do you do with open positions on Friday?
The market closes Friday evening and reopens Sunday, and the reopening price can be well away from Friday's close — through your stop, and sometimes past it. A stop-loss is not a guarantee of your exact price.
What's your Friday routine?
- do you close everything, or hold positions over the weekend?
- have you ever been gapped through a stop? What was the fill?
- has your broker ever widened margin over a weekend?
The mechanics are in weekend gaps explained.
Background: Weekend gaps: why prices jump when the forex market reopens
Currencies stop trading on Friday evening, but the news doesn't. What happens to your positions and stops when the market reopens at a different price.
What is a weekend gap in forex?
A difference between Friday's closing price and the first price when the market reopens on Sunday, caused by news or events over the weekend.
Will my stop-loss protect me from a gap?
Not fully. A standard stop is triggered when the market reopens and fills at the first available price, which can be beyond the stop. Guaranteed stops, where offered, avoid this for a fee.
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