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arco
08-09-2008, 01:31 PM
Seeing all these amazing gaps today, it made me think there must be some mileage in trading them.......the rules state all gaps are eventually filled.........although I'm sure there must be exceptions to that rule.




What is a Gap?
A gap is a change in price levels between the close and open of two consecutive days. Although most technical analysis manuals define the four types of gap patterns as Common, Breakaway, Continuation and Exhaustion, those labels are applied after the chart pattern is established. That is, the difference between any one type of gap from another is only distinguishable after the stock continues up or down in some fashion. Although those classifications are useful for a longer-term understanding of how a particular instrument reacts, they offer little guidance for trading.

So now we need to define some rules to trade the gaps.

Any ideas or thoughts?

arco
08-09-2008, 02:27 PM
.

Here's a starter chart - lets see what happens here.

Filling the gap alone would net 217 pips, but if we can get the reversal down to the bottom of the gap ----- BINGO

Last weeks gap of 70 pips was small by comparison.....will it get filled?

.

2618

arco
09-09-2008, 08:55 AM
.

Result of the potential gap trade mentioned yesterday - a maximum of 710 pips

(Last weeks gap appeared to act as resistance).

.

arco
15-09-2008, 09:21 AM
309 pips opening gap on Gbp.Jpy.

We may be able to get some mileage out of this once the dust settles.

Seeing these gaps again makes me think ALL positions should be closed on Friday nights...........stops may just not save your bacon in this environment.

dumbass
15-09-2008, 09:35 AM
what a great way to wake up though if you picked the right direction.

ive never seen anything like it , last few weeks .

ive never really worried about holding over the weekend but i think your right that all possies should be closed.

AMR
15-09-2008, 12:07 PM
what a great way to wake up though if you picked the right direction.

ive never seen anything like it , last few weeks .

ive never really worried about holding over the weekend but i think your right that all possies should be closed.

Yes with the fed now doing business and making major announcements on Sundays holding over the weekend is quite horrible. Lost 260 odd pips on the EUR/JPY long, although still up from my entry.

What do you do in such as case? Hold onto the trade and wait for the gap to potentially fade? Or get out and re-assess?

arco
15-09-2008, 12:20 PM
AMR

In this environment my ideal plan is to close off everything on Friday (or very early Sat AM) and re-position on Monday/Tuesday. Its the only safe way IMO.

You may just get lucky, but like your EY trade .....you may be in serious trouble (and more so if holding a large position).

arco

Dr_Who
15-09-2008, 01:16 PM
After my first foray into FX and losing a few grand, I am abit shy to go back. Have to give me a few weeks to sink in before I tip my toes in it again.

arco
15-09-2008, 01:47 PM
OK .....now dont tell everyone........

Heres the secret.....

.......whatever you decide is right to do...

.........do exactly the opposite.

Now you get 95% winners and only 5% losers.

Why didn't I think of that earlier

So Simple :)

arco
07-09-2009, 04:47 PM
Here's a GAP (window)

Will it be closed

http://i28.tinypic.com/ac537a.gif

arco
11-09-2009, 09:51 AM
Here's a GAP (window)

Will it be closed

http://i28.tinypic.com/ac537a.gif

Gap was closed last night (to within a few pips).

arco
28-09-2009, 08:19 PM
Just took 70 pips north off this one - it could do more to fill the gap reaching the KS potential resistance.

Chart should be self explanatory

http://i33.tinypic.com/1zwzp68.gif

peat
24-10-2009, 11:20 PM
I see CMC is giving a number of webinars this week. The first of them on Monday evening is about Gaps

Dealing with gaps in the market
6pm-7pm NZDT, Monday 26 October

Regularly there are gaps in the market that are all too easy for traders to overlook. However, these formations often provide valuable continuation and reversal trading opportunities. This presentation will show you how to identify and deal with significant market gaps as well as understand the implications they can have on your trading


MIND THE GAP!

peat
15-05-2010, 01:01 PM
So the S+P 500 found some support towards the end of the day at the exact area of the gap.
Will it close the gap this week? History says yes.

peat
19-05-2010, 09:28 AM
the gap was only re-entered overnight and not (yet) closed completely

edit : Kaching! closed now.