Charts and skipped stops

[_coda]

Hello

How are forex trades, kept open over the weekend, handled? Does the broker close the position at the closing value and then open it again at the defined opening value?

Is the mechanism dependent on the broker?

How is the new opening value calculated? I assume that there is some housekeeping done after closing and the adjustment is made to reconcile things? Any one able to describe what happens here? Is there anyone trading after the official close?

Finally, what happens to a a stop or limit, that should have triggered due to the price movement between between the closing and opening prices?

thanks

 

[Rhody Trader]

How are forex trades, kept open over the weekend, handled? Does the broker close the position at the closing value and then open it again at the defined opening value?

Is the mechanism dependent on the broker?

How is the new opening value calculated? I assume that there is some housekeeping done after closing and the adjustment is made to reconcile things? Any one able to describe what happens here? Is there anyone trading after the official close?

Finally, what happens to a a stop or limit, that should have triggered due to the price movement between between the closing and opening prices?

How it all works is definitely broker dependent. Some do actual rolls (end of each day open positions are closed, then reopened). Many do not. Most charge/pay carry interest, but some don't. I know of at least one broker that actually executes trades over the weekend, but most do not.

And there is no "official" open/close. Some brokers use 4pm Eastern. Some use 5pm Eastern. Likewise with price feeds.

 

[_coda]

Hi Rhody

helpful as always.

How it all works is definitely broker dependent. Some do actual rolls (end of each day open positions are closed, then reopened). Many do not. Most charge/pay carry interest, but some don't. I know of at least one broker that actually executes trades over the weekend, but most do not.

And there is no "official" open/close. Some brokers use 4pm Eastern. Some use 5pm Eastern. Likewise with price feeds.

If there is no official close, does trading continue at the exchanges/banks/ during the period. I'm trying to understand the price change.

Do you/anyone know what happens to stops that would have been triggered by the price movement?

Thanks again.

 

[Rhody Trader]

If there is no official close, does trading continue at the exchanges/banks/ during the period. I'm trying to understand the price change.

Do you/anyone know what happens to stops that would have been triggered by the price movement?

There are no exchanges in forex (except in futures). Basically, trading is done whenever two folks come together and agree upon a price, regardless of what day or time. Granted, there is very little trade over the weekend, but you can find it if you really want it.

If you have a stop that you carry over the weekend and the market gaps through it, you should get filled at the opening price level once the market opens, the same way you would in an exchange-traded market.