Trading Gaps

This is a discussion on Trading Gaps within the Forex Net Trap forums, part of the T2W Archive category; Originally Posted by peterf1966 A long hard slog over night, with nothing doing. Just closed it 20 mins ago for ...

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Old Oct 11, 2010, 9:57am   #31
Joined Oct 2009
Re: Trading Gaps

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Originally Posted by peterf1966 View Post
A long hard slog over night, with nothing doing. Just closed it 20 mins ago for 15pips, got bored with waiting for 20. Can I go to bed now?

Edit, and of course the second I closed it it dropped to my target of 45...
Your huge position of £1000/pip probably did that

I got away with 25 pips. I set a TP and SL of 25 pips, and given that it's the first time I staked 10p a pip
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Old Oct 11, 2010, 10:19am   #32
 
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Re: Trading Gaps

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Originally Posted by zorba_g View Post
Your huge position of £1000/pip probably did that

I got away with 25 pips. I set a TP and SL of 25 pips, and given that it's the first time I staked 10p a pip
Tell you what Zorba, if I had the bank for £1000 a pip, I wouldn't be getting up for 6.30 net trapping, I'd pay some other monkey to do it.
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Old Oct 11, 2010, 11:13am   #33
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Re: Trading Gaps

Looking last night charts, I had traded AUS/USD, EUR/JPY, EUR/USD and GBP/EUR at 10.00 pm wit 20 SL and TP
Will be +80 banked, at 100 a pip... http://www.trade2win.com/boards/imag...n_rolleyes.gif
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Old Oct 11, 2010, 1:12pm   #34
 
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Re: Trading Gaps

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Originally Posted by antonio2010 View Post
Looking last night charts, I had traded AUS/USD, EUR/JPY, EUR/USD and GBP/EUR at 10.00 pm wit 20 SL and TP
Will be +80 banked, at 100 a pip... http://www.trade2win.com/boards/imag...n_rolleyes.gif

Very easy to devise a trading plan AFTER the event has happened. Try this live next week and you may lose -80 pips!

Hence I like to only target taking profit in pips of 25% of each total gap size, stacks the odds in your favour. Gap 20 pips, target TP 5 pips, Gap 40 pips, target TP 10 pips, Gap 80 pips, target TP 20 pips.

M
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Old Oct 11, 2010, 1:27pm   #35
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Re: Trading Gaps

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Originally Posted by mark120169 View Post
Very easy to devise a trading plan AFTER the event has happened. Try this live next week and you may lose -80 pips!

M
For sure!!
Also I believe its better go for 25% of the gap. But what is your SL?
By the way, do you trade yesterday with SML or IG?
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Old Oct 11, 2010, 2:02pm   #36
 
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Re: Trading Gaps

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For sure!!
Also I believe its better go for 25% of the gap. But what is your SL?
By the way, do you trade yesterday with SML or IG?
Hate getting stopped out so negative RR time for me again! I calc SL to be 2 x TP with min 10 and max 30.

So 5 TP would be 10 SL , 10 TP = 20 SL, 15 TP = 30 SL, 40TP = 30 SL.

Used both IG and SLM last night, however SLM need much bigger margin requirements than IG Index, but spreads are better. Only traded Eur/Usd on IG as it had the same 2 pip spread as SLM.

M
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Old Oct 15, 2010, 10:22am   #37
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Re: Trading Gaps

Hi guys,

I would like to try this, but I'm struggling for some reason understanding this technique!!!
Could someone put it into laymans terms for me please?
Is it a case of seeing which way the market is going before it closes or......?

Regards
DS
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Old Oct 15, 2010, 10:42am   #38
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Re: Trading Gaps

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Originally Posted by dsinclair999 View Post
Hi guys,

I would like to try this, but I'm struggling for some reason understanding this technique!!!
Could someone put it into laymans terms for me please?
Is it a case of seeing which way the market is going before it closes or......?

Regards
DS
Lets say GBPUSD closes Friday night at 16000; at 9pm opening on Sunday it is at 16050; 50 pips higher; what tends to happen (no guarantee) is that the price then goes down again over a couple of hours or so to "close this gap" back towards 16000; so we can look to place a sell, maybe for half the pips, 25 here say, target is entirely up to you. Hopefully the price heads downwards and closes the gap and banks your pips. The reverse trade would be the case where the Friday close is higher then the Sunday opening, so the gap to close on Sunday is upwards so we place a buy. Make sure the gap is big enough to cover the spread on the trade, whilst leaving enough target space to make a few quid - there were about 4 trades last Sunday where the gap was about 30-40 pips i think so a few 20/25 pippers were possible if you wanted to go that far - some set a target of 10 pips to be safe and more guarantee of success i guess - does that help?
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Old Oct 15, 2010, 10:52am   #39
 
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Re: Trading Gaps

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Originally Posted by stoneyxk8 View Post
Lets say GBPUSD closes Friday night at 16000; at 9pm opening on Sunday it is at 16050; 50 pips higher; what tends to happen (no guarantee) is that the price then goes down again over a couple of hours or so to "close this gap" back towards 16000; so we can look to place a sell, maybe for half the pips, 25 here say, target is entirely up to you. Hopefully the price heads downwards and closes the gap and banks your pips. The reverse trade would be the case where the Friday close is higher then the Sunday opening, so the gap to close on Sunday is upwards so we place a buy. Make sure the gap is big enough to cover the spread on the trade, whilst leaving enough target space to make a few quid - there were about 4 trades last Sunday where the gap was about 30-40 pips i think so a few 20/25 pippers were possible if you wanted to go that far - some set a target of 10 pips to be safe and more guarantee of success i guess - does that help?
And by "Gap" we mean "A Gap" , "A hole" , "A set of missing candles on the chart with a nice space of fresh air in the middle" .

Look at the IG Index chart for EUR/USD on last Friday Evening / Sunday Evening 8th / 9th October. You will see the 40 pips odd gap between the Close and Open prices with fresh air inbetween! The Gap did close by 50% (20 pips) before retrace and I took 10 of these.

It really is shockingly simple DS ?

M

Last edited by mark120169; Oct 15, 2010 at 11:45am.
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Old Oct 15, 2010, 10:59pm   #40
 
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Re: Trading Gaps

I'll be having a look at this on sunday, seems very interesting!
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Old Oct 16, 2010, 5:39pm   #41
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Re: Trading Gaps

Hi,

I have also looked at this, but I still do not understand. Let's take the GBP/USD, which is closed at friday night 22:00 hours at 15990 ......... When do you see when it GBP/USD opens? Is this on Sundayevening at 22:00 hours exactly? When do you see the gaps for the first time? Is this 22:00 hours Sunday evening. If so, are you not to late then to check for multiple currencypairs? When en how do you place your trade then based for example on the 25% TP of the Gap (like Mark suggests)? Do you place your trade on the INT (so instantly in going into the market)? or do you open an order with the entry some bit away from opening?

Hope somebody will help us.

gr Caspar
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Old Oct 16, 2010, 5:42pm   #42
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Re: Trading Gaps

I see now on the chart on IG Index that it opens at 21:00 hours on Sunday evening........ Do I have to handle very quickly then for multiple pairs to check where the gaps are? How quickly do you guys do this?

gr Caspar
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Old Oct 16, 2010, 7:15pm   #43
 
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Re: Trading Gaps

I haven't done this yet but i'm guessing that most people will be checking the charts from 9PM seeing what the gaps are for the major pairs then checking what pairs look like the possible trades. Seems like the time to place the trades would be from 21:45-22:00. Advise you to look into other spread betting companies due spread costs differing substanstially between certain pairs. I would have thought there'll be some good heads up posted on this thread though!
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Old Oct 16, 2010, 10:31pm   #44
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Re: Trading Gaps

Slopius_jim started this thread
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Originally Posted by haighton View Post
I see now on the chart on IG Index that it opens at 21:00 hours on Sunday evening........ Do I have to handle very quickly then for multiple pairs to check where the gaps are? How quickly do you guys do this?

gr Caspar
Caspar,

The markets open at 21:00 and depending upon your spreadbetting provider (IG opens at 21:00 whilst Smart Live Markets is 22:00) you can take a position at any time that you want from the market open i.e. you go straight into the market as its completley up to you. There are no moving average indicators, scholastics etc. to watch as you are purely looking for a gap.
As previously posted I usually wait until 21:45-22:00 before taking any positions but there have been times that the gaps start to close right from the market open an example of this can be seen on GBP/USD last Sunday evening. Where this happens I tend to leave the trade as to chase it would be wrong and could result in a potential loss. Remember the gap is not guaranteed to close, its just a likely possibility.
Finally its important not to be greedy, set yourself a target and stick to it. Mark has written a few posts on this thread about his targets and I would suggest that you read those as they make some good points.

Hope that this helps,

Neil
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Old Oct 17, 2010, 2:46am   #45
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Re: Trading Gaps

Neil, do you have any previous results for this or is it a hunch? I think i remember reading somewhere that gap trading is -ve equity, I'll see if I can find it.
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