Weekend trading with cryptocurrencies

A couple of years ago I commented that some broker started offering weekend trading; those days so “boring” and covered by sports betting, especially football.

On that occasion I had a premonition and I finished the article saying the following:

Options that I guess will increase over time, so I would not be surprised to see how one day we can operate every day of the week in some markets, such as Bitcoin.

In the end, that prediction was fulfilled and today we have not only Bitcoin, but the entire cryptocurrency market negotiating on weekends, taking trading to the 24/7 concept.

Undoubtedly we are talking about a very significant comparative advantage compared to other markets such as stocks, those of the old school.

Evolution of online trading

At first we only had actions from Monday to Friday and from 8 to 4.

Then we introduced some indexes that opened until later, and later we introduced the Forex, with the possibility of trading 5/24, in what seemed like no more than trading.

At the time, this concept of being able to trade without interruptions at night made the Forex reach a huge popularity among all those interested in the world of trading.

Not only could you do day trading in the London session, but also tie with New York, then Tokyo and later Sidney, leaving your orders limited of any kind during the time you went to bed without many worries.

Not a few complained that the shares were not very efficient to trade because they closed at 4 and could not do anything after that time; with the consequent risk that there is always in the hours after-hours (imagine that there is a mega terrorist attack at night, for example).

Well, it seems that the Forex fell short and now we have reached the Nirvana of world trading, with the cryptocurrencies offering us the possibility of “making money” 24 hours a day, yes and also, every day of the year.

Is that beneficial for traders?

Yes and no.

Let’s explain.

For example, many of us would like the stock market to have the possibility of having more opening hours.

Ideally the same as cryptocurrencies, every day, day and night. This would save us a lot of dislike of that news after the closures, which sometimes benefit us (very positive results) and sometimes destroy our operations (results much worse than expected).

That’s why there has always been a lot of pressure to do day trading in the stock and index markets, with the excuse of avoiding those post-closing events. When reality says that doing day trading in stocks or even indexes is not the best, but carry those operations to several days, weeks or months; and of course, for this we need to leave open positions at night.

With the cryptocurrency market all this is fixed, because we no longer have to be so afraid of those bad news that can sink the price and have us “tied” without being able to do anything until the opening.

For example, if there is bad news with Bitcoin on Sunday, the market will fall, but if I have my automated trading in some way, for example with a stop order, the logical thing is that I could avoid much greater losses if the price continues to fall throughout the day (or night).

Therefore, with this type of trading we enter a perfect territory for the swing traders, who like to do operations of several days or weeks, and to whom it is very good to have a market that never closes, with their protection orders always working

That’s a blessing for trading, I admit it.

I wish we had the same in stocks or indexes.

In the Forex we already have something similar, but we are talking about a relatively different and much more complicated market.

Should you do cryptocurrency trading on weekends?

In principle you can do it.

Supposedly, weekends are days as good as others and if we buy or sell everything should depend on if we get a good opportunity.

Now, we have to consider one thing: that on weekend there is less liquidity and also, as a consequence, more volatility.

Why is there less liquidity?

Because those two days the banks are closed and this makes the amount of money flowing through the network in general is much lower, with fewer possibilities to deposit, and so on. It is true that cryptocurrencies can be used without problems those days, but the bulk of the money that moves online is still FIAT type.

However, the fact that there is less liquidity does not mean that it cannot be negotiated, but it does have to take into account that we will probably have worse conditions than for the day.

For example, if the average Bitcoin spread is 1 on weekdays, we should not be surprised that the weekend is 2.

Depending on the characteristics of our trading, these differences can become extremely important.

Anyway it will always be good to look in each broker what are the differences between the conditions between week and weekends.

Will other markets end up negotiating also on weekends?

Honestly, I do not think so.

I do not see the shares trading on Sundays.

Although we can never rule out anything, especially in this new digital age, in which it is so easy to automate things, so if you want, you could put a digital trading system that manages the vast majority of transactions the Weekends, with only some programmers to check bugs or errors.

I would settle for that the stocks could be negotiated 24 hours Monday through Friday, at least. That would be a great advance for those systems that like to let the benefits run but at the same time do not like the “market gaps”.

Although there are certain exchanges, such as in Saudi Arabia, Kuwait or Israel, which allow some stock trading on weekends, we are still far from seeing the great American and European indices doing the same.

How long will we have this weekend trading?

Well, I believe that even Bitcoin fever lasts, which according to some may be forever or at least for a long time.

According to others, it will not last forever; not even much.

Conclusion

I’m not saying we should not do cryptocurrency trading on weekends.

I’m just saying that we should study the conditions well and if it’s a good idea to carry out many operations on those days.

If the conditions are acceptable then there is no problem.

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