Trading Gaps

This is a discussion on Trading Gaps within the Forex Net Trap forums, part of the Specialists' Corner category; 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 ...

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Old Oct 11, 2010, 11:13am   #33
Joined Mar 2009
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
Joined Feb 2006
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
Joined Aug 2010
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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