Should You Leave Trades Open Over the Weekend?

Greetings to you, fellow forex traders!

A question that sooner or later begins to trouble everyone who trades on the D1 and H4 timeframes. The arguments about whether it is worth leaving open positions over the weekend have not died down for a long time. Traders have split into two opposite camps - some believe that you need to strictly follow the rules of the system and close positions only when the TS indicates it, while others are afraid to carry orders over because of possible gaps and close out on Friday evening.

Today we will try to figure out what is more correct - to try to close all positions by the weekend or not to pay attention to the weekend.

First of all, in order to test various exit options, I wrote an EA. It is very simple - it opens a trade at the start of Friday, and closes it, depending on the settings, either at 23:00 on Friday or at the start of Monday. Buy trades are made in even months of the year, sell trades in odd months. I decided to provide the following testing options:

This trading system, of course, cannot produce a positive result, but we do not need that. What matters is looking at the results in comparison with each other. I will call this simple system the "Basic" one.

Nevertheless, one trading system will not give us reliability, especially one this simple. It is quite possible that its rules happen to suit a specific closing method. Therefore it makes sense to look at one more system and, preferably, a genuinely working one. For this, I added rules for closing all trades on Friday at 23:00 to a successfully working EA. Separately, I decided to test the option with closing only losing trades on Friday and only profitable ones. From now on I will call this system the "Working" one.

Below I will present to you the results of all tests of the basic system and begin with closing on Friday:

Next come the results of the basic system with closing on Monday:

And finally, the results of the basic system with profitable positions closed on Friday at 23:00 and the rest at the start of Monday:

For convenience in analyzing the data, I put all the results obtained into a combined table:

From the table we can see that closing all trades on Friday is the worst option. The best one is closing only profitable trades on Friday while carrying losing ones over the weekend. Nevertheless, individual currency pairs produce better results when all positions are carried over to Monday.

As you can see, none of the options has an unambiguous advantage. Perhaps the test results of a real EA will be able to clarify the situation, and we will be able to determine the advantage of one of the methods.

Below is a set of tests of the working system without interference:

Next come the tests of the system with all trades closed on Friday:

Next come the tests of the system with profitable trades closed on Friday:

Next come the tests of the system with losing trades closed on Friday:

And for convenience in analyzing the results, I put all the data into a single table:

Judging by the table, closing all trades on Friday again turned out to be the worst option. Next comes closing losing trades on Friday, a little better is closing profitable trades on Friday. The best figures belong to the system without interfering with the trading rules.

As you can see, the system without interfering with the position-closing rules showed the best results. That is why you need to modify the rules of your TS very carefully and not put them into use without thorough testing.

In both systems, fully closing all trades on Friday evening showed the worst results. This suggests that such an approach to managing open positions still does not justify itself and that there is no need to be afraid of gaps. At the same time, it is quite possible that more sophisticated rules for closing positions on Friday can still improve the system. For example, you can try closing on Friday only those profitable trades that have already been in the market for more than a week (or some other period).

So, the desire to get rid of positions by Friday evening turned out to be yet another trader phobia, not supported by facts in any way. Before applying one or another popular rule for opening, modifying, or closing a position, it is simply necessary to thoroughly test its effect on the final result of your system on historical data.

And, of course, you should never blindly believe everything that is written somewhere, no matter how authoritative the source may seem. Develop in yourself the habit of thinking critically and practice the scientific approach. This, of course, will not automatically bring you a lot of money, but it will save you from a mass of delusions and save the time that you lose wandering along winding and false paths on the way to profitable trading.

Sincerely, Dmitry aka Silentspec TradeLikeaPro.ru