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Old 12-26-2011, 11:51 AM
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Default What is Sunday gap strategy ?

I came up about this word recently.I heard some people trade with this strategy.Its like gap trading in the beginning of the market weeks.
Anybody have any idea how to trade with it.
And does every currency has gap trading opportunity?
how to guess about a gap before trading?

what a gap meant in forex is a situation when the market price closes at say 1.3458 on friday ,then on Monday morning,instead of the market opening with the closing price of 1.3458 on Friday,the price has increased to 1.3490,a price gap of 32 pips has therefore occurred,depending on your trade if your position is left open then you may have profited from the trade or lost as a result of this gap

Usually when gap is 40pip and above, they I take this opportunity to trade with gap. Just open the new position with small lot to close the gap. It just a warm up at the early week. Not to gain a big profit. Just take 20pip TP and 15pip SL. But from what I have seen, the gap will close but when it depend on the market movement. Sometimes take around haft an hour, sometimes take 3 day to close.

"Forex Gap Strategy — is trading system that utilizes one of the most disturbing phenomena of the Forex market — a weekly gap between the last Friday's close price and the current Monday's open price.
The gap itself takes its origin in thefact that the interbank
currency market continues to react on the fundamental news during the weekend, opening on Monday at the level with the most liquidity. The offered strategy is based on the assumption that the gap is a result of speculations and the excess volatility, thus a position in the opposite direction should probably become profitable after a few days."
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