Forex Trading – Gaps

[asiaforexmentor 10]

Forex Trading – Gaps

 

Gaps happen when the forex market closes and the forex market have some movements before the market opens.

When the gap forms, What will they happen.

If you had read out previous post about gaps.

It will come as no surprise to you.

Ans: Gaps usually closes. The market will usually close back the gap that is formed.

There are plently of gaps the formed when monday opened, such a wonderful thing.

Got quite a number of pips just by closing the gaps.

These 2 charts are some of the example of the gaps these week, but there were plenty besides these 2.

 

Ezekiel Chew

Asia's #1 Forex Mentor

[Obsidian 10]

any statistical info on gaps?

[joshdance 10]

Gaps happen when the forex market closes and the forex market have some movements before the market opens.

 

Well, since the market is closed, it can't really "have some movements before the market opens." Want to try again, or rephrase?

[Mysticforex 13]

Well, since the market is closed, it can't really "have some movements before the market opens." Want to try again, or rephrase?

 

Gaps can be classified into 4 groups.

 

Breakaway

Exhaustion

Common

Continuation

 

Here is a thorough explanation:

 

Playing The Gap

[joshdance 10]

Gaps can be classified into 4 groups.

 

Breakaway

Exhaustion

Common

Continuation

 

Here is a thorough explanation:

 

Playing The Gap

 

Thanks Mystic. All of those are simply subjective ways to interpret the resulting gap, and the article does not explain the mechanics of a gap either. I was referring to the fact that the #1 forex mentor in all of Asia (by his own opinion) didn't quite get it right regarding what a gap is and why it happens. Perhaps it's just semantics to some people, but I think understanding the mechanics of a gap, and what a gap is may really be quite useful. I was giving Asia's best an opportunity to explain it in more detail.

[Mysticforex 13]

Joshdance...

 

I think I know what you mean now. Transactions when the markets are closed.

 

Let's say bank "A" sells 5 Billion euros to bank "B". How does the market record that transaction and open lower on Sunday evening?

 

Beats the heck out of me.

[joshdance 10]

Joshdance...

 

I think I know what you mean now. Transactions when the markets are closed.

 

Let's say bank "A" sells 5 Billion euros to bank "B". How does the market record that transaction and open lower on Sunday evening?

 

Beats the heck out of me.

 

Actually, I wasn't referring to that at all... in an OTC market like forex, a transaction like this does not have to be recorded (i.e., be made public), and may forever go unknown to everyone except the two parties involved. In fact, that's the whole thing with OTC; there is no way to know volume or transactions or anything like that.

 

Let's say euro closes (I'm talking generally here, as there is no real price for forex) at 1.2500 on Friday. On Sunday when the first markets open, the opening price is around 1.2550 -- the question is, why? It is no secret of course, and the answer is easily found, but I think asking a provocative question is likely to stimulate more thought than simply blurting out the answer. When people talk about gaps, I think it should be understood why a market opens at a different price than when it closes, when no transactions occur during that period. It's not like the market was bought or sold during that time.

 

Personally I don't concern myself with the notion of gaps too much, and I certainly don't put much statistical weight into whether one is likely to be filled or not, but I'm giving Asia's #1 forex mentor an opportunity to demonstrate his understanding of gaps, since he's #1.

[ctcalls 10]

I am not sure if until now there are many traders using the Gap on trading forex here. Because we know here, the Gap thing is not easy. If we are profit, then we will make money, but on the other side, we can lose money as much as we expect to make on the gap ..

 

Regards,