Should I leave deals for the weekend?
Greetings, friends forex traders!
A question that sooner or later begins to bother everyone who trades on the timeframes D1 and H4. The debate about whether to leave open positions for the weekend has not subsided for a long time. Traders were divided into two opposite camps - some believe that it is necessary to strictly follow the rules of the system and close positions only when the TS indicates this, while others are afraid of transferring orders due to possible gaps and close on Friday evening.
Today we will try to figure out how to do the right thing - try to close all positions by the weekend or not pay attention to the weekend.
Testing tools and procedures
First of all, in order to test various exit options, I wrote an adviser. It is very simple - it opens a transaction at the beginning of Friday, and closes, depending on the settings, either at 23 o’clock on Friday or at the beginning of Monday. Transactions in purchases are made in even months of the year, in sales - in odd months. I decided to provide the following test options:
- All transactions are closed on Friday at 23 hours;
- All transactions are closed on Monday at the opening of the market;
- On Friday at 23 hours only profitable trades are closed, all the rest are closed on Monday at the opening.
This trading system, of course, cannot bring a positive result, but we do not need it. It is important for us to look at the results in comparison with each other. I will call this simple system “Basic.”
Nevertheless, one trading system will not bring us reliability, especially since it is so simple. It is possible that its rules are suitable just for a certain method of closure. Therefore, it makes sense to consider another system and, preferably, a really working one. To do this, I added rules to the closing of all transactions on Friday at 23:00 in a successfully working adviser. Separately, I decided to test the option of closing on Friday only losing trades and only profitable ones. I will call this system "Worker" in the future.
Below I will present you the results of all the tests of the base system and start with the closing on Friday:
The following are the results of the base system with a close on Monday:
And finally, the results of the basic system with the closing of profitable positions on Friday at 23 hours and the rest at the beginning of Monday:
For the convenience of data analysis, I reduced all the results to a combined table:
From the table we see that closing all deals on Friday is the worst option. The best is to close on Friday only profitable trades with the transfer of unprofitable ones over the weekend. However, individual currency pairs bring better results when transferring all positions to Monday.
As you can see, none of the options has a clear advantage. Perhaps the test results of a real adviser can clarify the situation, and we can determine the advantage of one of the methods.
Below is a set of tests of a working system without intervention:
The following are system tests with the closing of all transactions on Friday:
The following are system tests with closing profitable trades on Friday:
The following are system tests with the closing of losing trades on Friday:
And for the convenience of analyzing the results, I reduced all the data to a single table:
Judging by the table, closing all deals on Friday again turned out to be the worst option. Then comes the closing of losing trades on Friday, a little better - closing of profitable trades on Friday. The best performance of the system without interference with the rules of trade.
As you can see, the system without the interference in the rules for closing positions showed the best results. That is why you need to very carefully modify the rules of your TS and not accept them for execution without rigorous testing.
In both systems, the complete closing of all transactions on Friday evening showed the worst results. This suggests that, nevertheless, this approach to managing open positions does not justify itself and that you should not 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 to close on Friday only those profitable trades that have been in the market for more than a week (or another period).
So, the desire to get rid of positions by Friday evening turned out to be another trading phobia, not supported by facts. Before applying this or that popular rule of opening, modifying or closing a position, you just need to thoroughly test its influence 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 a habit of thinking critically and practice a scientific approach. This, of course, will not automatically bring you a lot of money, but it will save you a lot of delusions and save the time you lose, wandering along winding and wrong paths on the way to profitable trading.