The practice of keeping trading positions open over the weekend, from Friday market close through Sunday/ Monday market open. Many prop firms prohibit or restrict weekend holding due to the risk of price gaps when markets reopen.
Why It Matters
- 1Futures markets close on Friday afternoon and reopen Sunday evening.
- 2During this gap, geopolitical events, economic developments, or natural disasters can cause prices to open significantly higher or lower than Friday's close.
- 3A weekend gap against your position can breach drawdown limits before you have any chance to react.
- 4Firms that prohibit weekend holding require all positions to be flat before the market closes on Friday.
- 5Some firms might automatically liquidate all positions before the market closes.
Example
- 1A trader keeps a long position in EUR/USD open from Friday market close at 1.1000, intending to hold it over the weekend.
- 2By Monday, unexpected economic news causes the pair to open at 1.0900. The $0.0100 drop over the weekend is called a weekend gap, and because the position was held over the weekend, the trader suffers an immediate loss without the chance to manage the trade.
- 3This illustrates the risk and why many prop firms prohibit weekend holding.
Common Mistakes
- ✖Relying on stop-loss orders that may not protect against gaps, leading to
- ✖Leaving positions open over the weekend despite firm rules prohibiting it.
- ✖Underestimating the size of potential weekend gaps and the risk to drawdown limits.