Trading Gaps in the Forex – Not Trendy, But Very Profitable!
Practical isn’t common, more young children know who’s on the “Surreal Life” than know where Mexico is located, of course, if really not new, it’s not “trendy” or “hip. very well While this general mischief seems to have nothing at all to do with Fx trading, why is it so very long effective trading strategies are disregarded because they’re “simple” or “old? ” trading gaps
Why spend hours a day on an advanced, new fangled, supposedly revolutionary (read: complicated and confusing) trading system when this “boring” version is profitable?
Isn’t revenue the point? Isn’t it better to be old, boring, and profitable than new, flashy, and doubtful? Isn’t profit the bottom level line here?
Gap trading is nothing new. Is actually been used in the stock market and in commodities trading for years, and takes good thing about the difference, or “gap” between closing price of the day before with the opening price of the next day, but this tactic is ignored in the Fx. Why is that?
Very well, gaps rely on a market close, and when the Forex market never closes, it’s really hard to get a distance or take good thing about it. In fact, during an entire trading week, there is merely 1 time when using gap trading strategies in the Forex market is even possible! Sunday evening at the open is the only time that gap trading Forex is possible.
Boring? For almost all of us, yeah. Pointless? Wow heck no. While different trading systems are looking for that. 5% or that 1% above the 50% mark, some symptoms and indicators claim that the Forex gap approach is correct over 85% of times.
No, that’s not a typo, and gowns not hype. Once per week may be boring, but those numbers make it worthy of the wait and should have you ever drooling at the possibilities.
What exactly is trade the gaps on the Forex market?
Initially, understand that there are 3, and ONLY 3, things that the price can do between Friday’s close and Sunday’s open up. They will:
1. Open up above Friday’s close, which is called “gapping up”
2. Open below Friday’s close, which is called “gapping down”
3. Open up at the same price, signifying there was no difference
There can be large gaps, often referred to as “full gaps” in cost, or small breaks, known as “partial breaks. ” As far as strategy, there’s no big difference between the two. Very good gap trading strategy works for a lot of types of spaces. The single thing to watch away for is gap size. I don’t recommend trading a gap unless there is a 15 pip difference, and this strategy is best used with the major currency pairs.