There is a belief that trading Forex is opposite from every-day job. At regular job you are working every day for little salary. But in Forex is opposite, it's enough to trade one day per a week only if you see a good chance for trade setup.
I like to trade GAP'S!
Trading gap's is an old and not so popular, but profitable trading strategy.
On the Forex market we can find gap's on Sunday opening.
First of all, I need to say that there is half gap and full gap.
Half gap is when price is open only half of way.
Full gap is when price is open all the way.
What does it mean "price is open"?
On the market opening at Sunday (FOREX case) starting price is different from the
last week which means that gap is open.
There is a belief that price would come back to previous price which means that gap is closed.
In my opinion, there are 4 different GAP'S.
There is certain place where gap can appear:
If we have turning point:
-Price can gap in a direction of a new trend and such gap does not have to close because
it started a new direction.
-Price can gap in same direction, testing the old turning point, and such gap will close because
it's in an extreme position.
If we have price movement:
-Price can gap in the started direction busting up the trend (acceleration) and such gap doesn't
need to close.
If we have side-way trend:
Such gap will probably close and my best experience is to trade SELL when gap is up open and
to BUY when it's down open, for closing.
There is one more thing. When price gap's up or down I do not enter in a position right away, but
wait for a little bit and when price goes further more in a gap direction for 20-30 pip's
then I put order in a place for gap closing. I do that because this extra 20-30 pip's gives me advantage.
I have noticed that if gap didn't close, it would go back to the gap opening price.
I hope that I didn't reveal to much for you!
Labels: trade gap