Trading with Gap (up side gap)
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Thread: Trading with Gap (up side gap)

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    Trading with Gap (up side gap)

    What makes this pattern special is that generally a Gap Up may mean bullish strength especially if the first bar of the day was also a strong bull bar. But if you notice it had a tail on top and also failed to get any follow through. Furthermore it was a Bear Trendline breakout failure and reversed down as expected. The Bulls still held on to the hope of a Bull Trend day and bought the pullback test of the Gap. When that failed resulting in a lower high, the cause of the bulls was lost and the market turned into a trend from open Bear Trend Day.



    • Market gaped up on the open but could not hold higher levels.
    • Bulls bought on a what they thought was a pullback on a gap open day.
    • The market then formed a lower high and reversed down in a failed breakout.
    • For those who missed out there was a second entry short at the EMA in the from of a bear flag.

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    This thread is very good example of gap trading and we will learn many new things with it. Today market is open with some gap and your tips are really helpful for us to trade with it. I also think that when market is open with some gap then its must filled it after some time then follow a trend and move towards its targets.

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    Quote Originally Posted by mao View Post
    This thread is very good example of gap trading and we will learn many new things with it. Today market is open with some gap and your tips are really helpful for us to trade with it. I also think that when market is open with some gap then its must filled it after some time then follow a trend and move towards its targets.
    Yeah this is based on gap trading strategy and if you are understand the gap then you can easily make money on forex and this gap trading is also help traders to know about the market trend and possible next movement. Which is really important for all traders and when traders are focus on their learning they are earn good profit from their trades easily.

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    I do not like trade with market gap because this is so much risky. When market is open on Monday then some time its totally change its trend. No one know that how this market is move and which is its new trend. Your trading way is good and if we want some earning then we must need to take some risk. I will learn this trading way then think to use it.

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    Thank you very much for your observation about the gap up market as seen here . The market actually gap up an that gives an impression of been a bullish market , but any trader who has good understanding of candlestick formation will know that the bar up that comes with the tail is what is called the FAKEY. it is a bullish reversal formation that gives the opinion of a downtrend market even though i do not know under the time frame that this has been taken.

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    Quote Originally Posted by glory3 View Post
    Thank you very much for your observation about the gap up market as seen here . The market actually gap up an that gives an impression of been a bullish market , but any trader who has good understanding of candlestick formation will know that the bar up that comes with the tail is what is called the FAKEY. it is a bullish reversal formation that gives the opinion of a downtrend market even though i do not know under the time frame that this has been taken.
    Market gap is not give us any confirmation of market trend because you can see on the above chart gap is bullish but market is move with bearish trend. SO this is really important to understand the market movement because when bullish gap is seen then market is must fill that gap and when its goes back down to fill that gap ita change its trend and move some down side trend.

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    One main thing that i have every known about the gap in the market is that it will always get filled up almost the same day and only very few of them do fail . Most of the gap i have seen in this market has got filled up without too many days interval, at least about 80% of gap will get filled up and the case you presented is not wrong but most of them are always filed almost the same day.

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    Trading gaps is not easy, there are many times that it will work but sometimes, it is better we avoid pairs that have this characteristics than trading it and at the end of the day make losses which we are going to regret thereafter, I believe that gaps happen more with GBP USD pairs and most times with the indices.

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    Forex trading is very risky business and when traders are trade on Monday with gap then our risk is more increase because on Monday market is move with new trend and if market gap is open bullish then we can do short trade when market is show us any reversal sign because market is must fill the gap to follow its new market trend.

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    When it comes to gap trading we really have to be careful too. There are so many beliefs among traders about gap trading. While some believes that the gap must be filled back, some will do believe that that the market gap must not fill. This is forex and nothing is guaranteed here. We should learn to use what we are seeing in the market to analyze our trade and not what we actually feel that would happen.

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