Do you know what is "Open Gap"? - Page 52
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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. #511
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    If you ought to assume well properly, you'd see that the European ballot then created a large gap within the monetary unit pairs, thus I ought to understand that the news has large effects on the gaps that happen. Well, I feel having the ability to form analysis matters once it involves forex mercantilism, the candle, and my strategy reveals additional to me and additionally once I haven't any clue I do stand back of the market.

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  3. #512
    Trader Obaforex's Avatar
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    Open gap is a very common thing in the forex market, usually they occur when a significant political or economic event occur during the weekend therefore causing the close price of the previous week to differ significantly from the following week's opening price. This is why it is very safe and preferable to ensure that you close your trades before weekend, because should such gap go against your trades, your trades will not be closed at your stop loss price but rather at market open price

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  4. #513
    Trader layigold's Avatar
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    Quote Originally Posted by layigold View Post
    At the opening of the market this week , watch out for a serious gap on USD correlated pairs as a result of US government shutdown on Saturday . For the first time in five years , the US government officially shutdown on Saturday as the Senate rejected a short term spending bill to keep federal government running . I expect currency pairs like GBPUSD , EURUSD , NZDUSD and AUDUSD to gap up as the market opens this week and that is why day traders are always advise to close their positions on Friday for the avoidance of gap that could affect their trades. I will give update when market opens later today with some charts to support my view .
    Sequel to my last post on this topic , I said that USD correlated pairs would experience a gap as a result of US government shutdown which was expected to weaken the US Dollars . Just like I said previously , I hereby attach charts of some currency pairs to show as a matter of follow up that the market gap occurred as anticipate:

    gap1.jpg

    gap2.jpg

    gap3.jpg
    You can now see why we encourage day trader to ensure that all his positions are closed on Friday because anything can happen during the weekend that could affect the market seriously which eventually will make trades already profits end in serious loss

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  5. #514
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    Quote Originally Posted by Obaforex View Post
    Open gap is a very common thing in the forex market, usually they occur when a significant political or economic event occur during the weekend therefore causing the close price of the previous week to differ significantly from the following week's opening price. This is why it is very safe and preferable to ensure that you close your trades before weekend, because should such gap go against your trades, your trades will not be closed at your stop loss price but rather at market open price
    Yes this tool is specially connected to weekend when market is off so economic activity always interfere in it movement so for earning and forget success from this market we need to understand such changes which will give trader better mean of trading through we will gain success here .

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  6. #515
    Trader Yayami's Avatar
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    Quote Originally Posted by fahaddd View Post
    Yes this tool is specially connected to weekend when market is off so economic activity always interfere in it movement so for earning and forget success from this market we need to understand such changes which will give trader better mean of trading through we will gain success here .
    it's quite so simple for you sir to say success would easily come after learning and understanding open gap movement alone. back on the yard to open gap first, it's just a skipped movement we won't see during holiday or weekend when there are no trading activities allowed since market is closed. it's still mystery for me why market able to change its price and create gap. yet success has wide meaning and not simply considered and enough by only knowing how to trade with open gap market.

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  7. #516
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    Quote Originally Posted by Yayami View Post
    it's quite so simple for you sir to say success would easily come after learning and understanding open gap movement alone. back on the yard to open gap first, it's just a skipped movement we won't see during holiday or weekend when there are no trading activities allowed since market is closed. it's still mystery for me why market able to change its price and create gap. yet success has wide meaning and not simply considered and enough by only knowing how to trade with open gap market.
    This an explication as an experience trader it is our duty to tell our junior how they work to trade in these gaps because if we mislead them we may lose money and face losses , most of people say that market will cover its gaps but i think it is not specific way for trading we see losses always if we never understand market direction over the results .

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  8. #517
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    Gap will happen in each week, in the beginning of open market in Monday always had gap. Gap is happening because
    there is differences when the market is closed in Friday and opening market in the Monday. Gap could be up or down
    in the opening, depending on condition of each pair.

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  9. #518
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    I recognize about this open gap motion and this is one among many risky but unstable movement in this foreign exchange marketplace. I have stuck with it few times which my orders, they all had been ended up in a big terrible amount due to large reversal movement and I never observed that.

    I used to be bowled over when I were given up in morning and saw my account misplaced its stability to 0. And when I saw the chart, boom it turned into fantastic.

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  10. #519
    Trader Sixteen's Avatar
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    It's not all the time that gaps will occur in the market but in some occasions where there was a high volatile news in the weekend, it can cause open gaps once the market opens and this tells us that there was some huge movement when the market was closed. We must understand this open gaps and know that it do not respond to any take profits or stop loss levels in our trade. So we must be careful and make the best decision in our trade.

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  11. #520
    Trader layigold's Avatar
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    For those who have been following this thread , they should have know what gap is all about in forex trading and its possible causes . For those who are day traders, the best thing for them is to close their trades before market closes on Friday because when there is a gap , protective stop loss may not protect your account from having a serious drawdown . In case the market gaps beyond your stop loss target , the market will have to adjust your stop loss orders to a price level closer to the opening price and that will be a huge loss. This may not be a serious problem to those who trade long term because their stop loss target to the entry point are usually wide

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