Open position for the weekend. Close or leave?

Forex is a specific market that works 24 hours a day, 5 days a week. However, nothing prevents us from remaining open for the weekend. Brokers disable access to quotes and prevent orders from being placed on Saturday and Sunday. During the weekend, important macroeconomic events take place from time to time, e.g. a meeting of the G7 countries, as a result of which markets can open with a large price gap (in this case, commonly called weekend gap). This raises some dangers ...

Due to the fact that at the weekend we can not do anything with our positions macro data taking place at that time, if we have an open position we can start a new week with increased profit or loss, depending on which way the gap is going to be. This is one big unknown for us on Friday. It's really hard to predict how the G7 meeting will end, not to mention the market reaction.

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Open position for the weekend. What to do with her?

Closing? Risk and leave? Well, the matter is a bit more complex. Mainly it will depend on the time horizon in which we play and what risk we accept.

For short-term transactions, where SL and TP they are usually small and the volume is moderately large, it seems better to end the trade on Friday evening because a large weekend gap may strongly affect the result of this single transaction.

In a long-term game, where the position's time horizon is even several months, the use of financial leverage is usually very small. Usually, SL and TP are distant then, and even a large weekend gap should not have such a significant impact on the transaction balance. Of course, despite everything, the risk can be further minimized by closing the position on Friday night and repeating the opening on Sunday. However, it depends on the individual preferences of the investor. There is also the question of tracking macro events and economists' expectations ...

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The probability of a weekend gap increases when we see in the calendar that an important meeting will take place on a given weekend. Then some key decisions for the global economy may be made. The same is true of economists' forecasts - if they are very divergent, then the danger that the data may surprise the market increases as well. This will certainly affect the quotation of instruments. The estimation of the risk of a gap should additionally encourage us to reduce or close the position.

If you decide to leave your position for the weekend, it is better to avoid a situation in which a large part of the funds has been used. Big leverage combined with an equally large volume of transactions with a relatively small deposit due to the price gap, it can create an overdraft that will eventually have to be settled.

Or is it better to only tighten Stop Loss?

Unfortunately not. This solution can not help us. If we set Stop Loss closer to the market price before Friday's closing, and on Sunday the opening will have a gap that will exceed (no matter how much) our SL level is the broker and will execute our transaction at the first market price (opening price).