Do you know what is "Open Gap"? - Page 2
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Thread: Do you know what is "Open Gap"?

  1. #1
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    Do you know what is "Open Gap"?

    Forex trading won't always stay steady all of the times and we always need to be prepared for anything worse that might just happen. If we want to make a good income in this business, then we need to specially watch the weekend's position. As for the reason, the chance of open gap is very high compared to ordinary days trading. I won't say things like open gap won't happen in ordinary days trading as well. They might be if a high news impact just suddenly got released.

    As for the open gap in the weekend, every traders will need to watch out for the possible jump. And as how to check it, you need to check the news on the saturday and the sunday. If you find a breaking news or a high impact news, then there is a chance the market will open in a big gap whether it's going upwards or even downwards.

    Here's the example:


    You might think again about closing the position over the weekend or just hope to earn even more money from the gap.
    But let me tell you something, even if you used stop loss in this kind of event, it won't work at all if the gap is further than your stop loss.

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  2. #11
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    Like now there is a gap in all NZD related pair and that is because of the strong news release that just occurred. That is the reason why most of the pairs gives gap on weekends and then on business days too. But then you see, if we were following the trend the gap will be in our favour, just like all NZD related pairs.

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  3. #12
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    Quote Originally Posted by splash View Post
    Like now there is a gap in all NZD related pair and that is because of the strong news release that just occurred. That is the reason why most of the pairs gives gap on weekends and then on business days too. But then you see, if we were following the trend the gap will be in our favour, just like all NZD related pairs.
    you have said a good thing, the gap can occur at any time it may be caused by news over the weekend, it can be caused by the mind of traders too and what they believe the market will do. in that sense, i can not believe traders can trade the gap very well, it can not be the way to trade with good work.

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  4. #13
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    Quote Originally Posted by splash View Post
    Like now there is a gap in all NZD related pair and that is because of the strong news release that just occurred. That is the reason why most of the pairs gives gap on weekends and then on business days too. But then you see, if we were following the trend the gap will be in our favour, just like all NZD related pairs.
    I do not notice this gap you said on the NZD until on Thursday's morning, the market gaped so much on almost all the pairs that has that currency. Above all, traders should be very careful about the gaps in the market, it can not be traded at best, so it is at the best interest of the trader to leave the gap trading alone.

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  5. #14
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    Quote Originally Posted by cozard007 View Post
    I do not notice this gap you said on the NZD until on Thursday's morning, the market gaped so much on almost all the pairs that has that currency. Above all, traders should be very careful about the gaps in the market, it can not be traded at best, so it is at the best interest of the trader to leave the gap trading alone.
    Like I said when we follow the trend it will be in our favour, I took the GBPNZD buy trade a day before the gap occurred, so therefore you see it went in my favor, nothing to be scared of, in as much as we can make analysis we can actually benefit from the gap and make money. That is why analysis is the ultimate thing that we need in forex trading.

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  6. #15
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    When you are experienced in CFD trading or index trading then you will see many open gaps in a week. I am fond of DAX trading. And most broker allow it to trade for few hours in a day with few hours of gaps. But we see trades go on and it is closely related to USD and EUR prices. When price of USD or EUR change it bring dramatic change in DAX price. Often you will find 100/200 even 400/500 pips gap in a day and I faced several stopped out in last month. On the other hand few 100/150 pips gap in EURUSD, EURJPY, GBPUSD, GBPJPY is often seen in forex due to big impact news. So I try not to keep a trade open for Monday morning for some unexpected results.

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  7. #16
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    Quote Originally Posted by nkhan2810 View Post
    When you are experienced in CFD trading or index trading then you will see many open gaps in a week. I am fond of DAX trading. And most broker allow it to trade for few hours in a day with few hours of gaps. But we see trades go on and it is closely related to USD and EUR prices. When price of USD or EUR change it bring dramatic change in DAX price. Often you will find 100/200 even 400/500 pips gap in a day and I faced several stopped out in last month. On the other hand few 100/150 pips gap in EURUSD, EURJPY, GBPUSD, GBPJPY is often seen in forex due to big impact news. So I try not to keep a trade open for Monday morning for some unexpected results.
    even on the stock market as well, there are usually more gaps in there too, it seldom occours in the forex market well, and being that I trade the longer time frame from the daily to the least, I don't much experience the gap on those currencies, most at times the gaps are been filled up.

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  8. #17
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    there was a style that i used to know the direction of the market gap and that was using basket trading where you look at which currency had changed in the direction of the trend during the week so when the institutional traders come they create a gap as they use the weekly charts to trade

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  9. #18
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    Quote Originally Posted by splash View Post
    even on the stock market as well, there are usually more gaps in there too, it seldom occours in the forex market well, and being that I trade the longer time frame from the daily to the least, I don't much experience the gap on those currencies, most at times the gaps are been filled up.
    Yes you are right, even the gap on the stocks market are more than the ones on e the forex market. This is why I believe that traders should not trade during the time that gap would surface. The gap is not tradable and if any trader tells you that they are trading gaps, just know that the trader is not telling the truth and he is gambling at the sane time.

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  10. #19
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    Quote Originally Posted by nkhan2810 View Post
    When you are experienced in CFD trading or index trading then you will see many open gaps in a week.
    all aspect of financial market are getting gaps during the weekend time, the market will open to react to that on monday. and the index you made mention will have gaps during the day trading to, they are very volatile and dangerous to trade. traders should not be using them with low equity of trading.

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  11. #20
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    Quote Originally Posted by kagho View Post
    there was a style that i used to know the direction of the market gap and that was using basket trading where you look at which currency had changed in the direction of the trend during the week so when the institutional traders come they create a gap as they use the weekly charts to trade
    I do not accept your comment sir, I do not believe that any institutional traders creates the gap, the market is absolutely closed during the weekend, and I know that it is mainly the economic situations that the market is reacting upon during that time created the gap. Also, gaps can not be traded, I have not seen any trader trading it successfully.

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