These Euro Gaps

This is a discussion on These Euro Gaps within the General Trading Chat forums, part of the Reception category; Im not a great follower of gaps in forex as a genuine gap rarely appears. Those that use indicative charting ...

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Old May 12, 2012, 11:52am   #1
 
Lord Flasheart's Avatar
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These Euro Gaps

Im not a great follower of gaps in forex as a genuine gap rarely appears. Those that use indicative charting packages will find more gaps over the weekends. It appears that we have two gaps on the Eur/usd and the Eur/Gbp. The gaps down are from last Fridays close until Sunday evening. The Eur/usd nearly closed the gap,or is that close enough to count? History has told us that all gaps are filled,but in what timescale. There are others in similar situation.
The Chf/jpy looks to have just filled its gap
The Eur/jpy looks to have just filled its gap
The Gbp/chf has not filled its gap

Are gaps as relevant as they were? could this be the gap that is never filled? could it be filled next week. etc,etc. any thoughts
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Old May 12, 2012, 4:21pm   #2
 
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Re: These Euro Gaps

Quote:
Originally Posted by Lord Flasheart View Post
Im not a great follower of gaps in forex as a genuine gap rarely appears. Those that use indicative charting packages will find more gaps over the weekends. It appears that we have two gaps on the Eur/usd and the Eur/Gbp. The gaps down are from last Fridays close until Sunday evening. The Eur/usd nearly closed the gap,or is that close enough to count? History has told us that all gaps are filled,but in what timescale. There are others in similar situation.
The Chf/jpy looks to have just filled its gap
The Eur/jpy looks to have just filled its gap
The Gbp/chf has not filled its gap

Are gaps as relevant as they were? could this be the gap that is never filled? could it be filled next week. etc,etc. any thoughts

Hi Lord,
In my experience Gaps always fill.... I am talking here about EURUSD that are the ones I follow...
I trade them, and consider they magnetism along the week (if they don't close soon enough) for the rest of my trading, everyweek, and by now, for me, there is no indication at all of them stopping to work....
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Old May 12, 2012, 6:43pm   #3
 
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Re: These Euro Gaps

Gap traders may have experienced big gaps in their accounts waiting for eur/usd to close the gap.

To paraphrase - gap can stay open longer than you can stay solvent
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Old May 12, 2012, 7:29pm   #4
 
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Re: These Euro Gaps

The fact that so many gaps close doesn't necessarily lend them any significance. After all, how many prices on a given day, after losing for a while will EURUSD return to in the same day? Quite a few I'd say. What about return to that price within the week. Most.

Say you had entered a position in EURUSD in 2009. At any point. Price has since returned to those prices in 90-95% of cases during 2010-2012. And if we include 2009 too and whether it returned, you'd be looking at 99.9%. And that's any price, any time. The ones that it hasn't returned to are understandably at the extremes of price in that year. Does that help trading? Not much for me. I think Zen Archer has a point. What are the claimed stats of gap's being filled and within what timeframe and/or drawdown?
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Old May 12, 2012, 7:35pm   #5
 
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Re: These Euro Gaps

I have no experience playing gaps in forex, but in equities gaps form because something good or bad happened to the business. Depending on the type of gap it is, but usually large breakaway gaps in equities never fill because the company is going out of business or they lost a significant chunk of their business that never will return. Or they suddenly acquire some big chunk of business. At least, that's what I've seen. I am sure you could find some correlation in the forex market, but I don't know the fundamentals of the forex market, so I would just be guessing.
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Old May 12, 2012, 7:48pm   #6
 
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Re: These Euro Gaps

Quote:
Originally Posted by ZEN archer View Post
Gap traders may have experienced big gaps in their accounts waiting for eur/usd to close the gap.

To paraphrase - gap can stay open longer than you can stay solvent
Obviously one has to build a way to trade those gaps to make it successful, and cannot just take a position of certain lots and wait and see (and pray) if it closes or not....
doing that.... the account won't last that much...lol
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Old May 12, 2012, 10:38pm   #7
Joined Sep 2008
Re: These Euro Gaps

Quote:
Originally Posted by jacknapier View Post
I have no experience playing gaps in forex, but in equities gaps form because something good or bad happened to the business. Depending on the type of gap it is, but usually large breakaway gaps in equities never fill because the company is going out of business or they lost a significant chunk of their business that never will return. Or they suddenly acquire some big chunk of business. At least, that's what I've seen. I am sure you could find some correlation in the forex market, but I don't know the fundamentals of the forex market, so I would just be guessing.
This is a good point for anyone switching over to forex from equities. In my experience with equities if the large opening gap does not fill during the 1st day there's isn't much hope of it filling in the near tern. Forex however tends to fill most sunday night gaps often within the next trading session or at worst sometime within the week.

I don't usually play gaps because the draw down can be rather large at times but I will take a stab if the gap is significant and is against the daily trend.

Peter

Last edited by wackypete2; May 12, 2012 at 10:52pm. Reason: spelling
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