Year-end cleanup: what do you do with open positions?
Closing the year: flatten everything, or hold the positions you believe in through the holiday gaps? The decision combines tax thinking, gap risk and the psychological value of starting January clean.
What's your practice?
- whether you flatten or hold into the year change
- the risk rules for year-end holds
- the January gap that greeted a held position
The weekend gaps guide covers the holiday gap mechanics.
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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