Gap Trading

[ledgy]

If you keep refining your rules and don't overtrade, trading just sundays gaps can even become THE weapon, IMHO

Not for me mate. I consider them as my brucey bonus if you will, and may up my size if i'm confident the gap will close. But occasionally the gap can go wildly against you or there may be no decent gap to take.

It's a small part of my day to day trading strategy.

 

[ledgy]

It took me more than a year to try and do some thing around fx gaps and I am not done yet. I try to trade commodities with the COT when I can derive a good conclusion from reading it well, but not yet the gaps. I welcome any info on that also.
Next gap to explore for me is gold, as I read on a forum that it gaps relatively to euro.

Check out the gold gap 25th July, still not closed. No stop would have wiped many out on that one.

They are NOT a sure fire thing!

 

[yiehom]

Check out the gold gap 25th July, still not closed. No stop would have wiped many out on that one.

They are NOT a sure fire thing!

As stated in my previous posts, I certainly would have skipped that gap, certainly!

 

[options-george]

As stated in my previous posts, I certainly would have skipped that gap, certainly!

I always use stops on my trades - generally my Sunday night trades are done within a few hours or sometimes on Monday morning. But maybe that's something I need to dwell over and have another think.

Will check out the gold gap from 25/7.

Nice to get some 'gap' discussion going here :clap:

 

[yiehom]

Every one has their way of protecting their account from ruin. Fixed stops are but one way to achieve it, but not the only one nor the best imho. I've been margin called many times with - dare I say because- stop losses.

 

[coopster]

So these two trades cost me about £6 in trading losses and $60 in commissions.

Something a little odd about this. Surely your losses have to include the fees. Especially when the fees are 10x your losses!

At this rate you would have to have a serious win to even come back to zero. Effectively a loss every time, regardless of whether you were right in your trading! Obviously on demo sizes, the fees are a high % but this seems a crazy way to learn.

I use Interactive Brokers for trading US stocks. for 100 shares, its $1 in and $1 out and gets cheaper the more shares you trade. Might be worth a look.

 

[options-george]

Something a little odd about this. Surely your losses have to include the fees. Especially when the fees are 10x your losses!

At this rate you would have to have a serious win to even come back to zero. Effectively a loss every time, regardless of whether you were right in your trading! Obviously on demo sizes, the fees are a high % but this seems a crazy way to learn.

I use Interactive Brokers for trading US stocks. for 100 shares, its $1 in and $1 out and gets cheaper the more shares you trade. Might be worth a look.

Hi Coopster - thanks for your post. Apologies, I just had a quick go with testing out one of my broker accounts - and I just had to laugh at it afterwards, and thought I share the experience 🙂

Since I have done some research as to likely transaction with a number of brokers, and think that I won't be having any more nasty surprises like that :cheesy:

I am looking to go with Trade Station for specific shares, still looking at a number for alternatives as far as the indices are concerned.

 

[options-george]

Wow - that was one hell of a Sunday night - scary thanks to the USA downgrade! I was reluctant to get involved. But in the end went for gap fills on EURJPY and EURGBP - break-even on the first after it retraced, but a winner on the second one.

Hope you guys had a profitable night too!

 

[yiehom]

Wow - that was one hell of a Sunday night - scary thanks to the USA downgrade! I was reluctant to get involved. But in the end went for gap fills on EURJPY and EURGBP - break-even on the first after it retraced, but a winner on the second one.

Hope you guys had a profitable night too!

Difficult morning here. In the red with three trades so far: aud/chf, aud/cad and aud/gbp.
I did not have any gap per my rules, so am trading with the gap, and had to wait for the initial to close before entering just before London open.

 

[options-george]

Difficult morning here. In the red with three trades so far: aud/chf, aud/cad and aud/gbp.
I did not have any gap per my rules, so am trading with the gap, and had to wait for the initial to close before entering just before London open.

I did quite badly with trading the fx gaps last Sunday. I tried to fade the CHF against GBP and against USD and hit the wall on both. Didn't consider there to be any other setups that day.

I figure a prudent approach, given the current CHF volatility, would have been to short one pair and buy the other but make sure that the winning trade is bigger than the losing trade. Ah well that's with the benefit of hindsight.

Testing the US equity gaps. Have done 5 trades so far (minute size!) and am doing well - primarily S&P and Russ2000.

 

[yiehom]

I did quite badly with trading the fx gaps last Sunday. I tried to fade the CHF against GBP and against USD and hit the wall on both. Didn't consider there to be any other setups that day.

I figure a prudent approach, given the current CHF volatility, would have been to short one pair and buy the other but make sure that the winning trade is bigger than the losing trade. Ah well that's with the benefit of hindsight.

Testing the US equity gaps. Have done 5 trades so far (minute size!) and am doing well - primarily S&P and Russ2000.

Last 2 weeks for me were a loser and a B E. But still positive with the gain 3 weeks ago. I feel an invisible hand behind the swissie and the yen lately.
I learned to stick to my rules and sit tight as Mr Jesse ordered🙂.

Missed a perfect opening gap on London sugar a couple of days ago, which is still running.

When do you trade the gaps on the S+P?

 

[yiehom]

Bought this morning gap in UK sugar. So far no clear direction. I'll wait till it starts moving up (hopefully) or down, before setting a stop.
Stop set at 756.44
Stop trailed to b e. Will sit tight now.

 

[options-george]

Last 2 weeks for me were a loser and a B E. But still positive with the gain 3 weeks ago. I feel an invisible hand behind the swissie and the yen lately.
I learned to stick to my rules and sit tight as Mr Jesse ordered🙂.

Missed a perfect opening gap on London sugar a couple of days ago, which is still running.

When do you trade the gaps on the S+P?

Bought this morning gap in UK sugar. So far no clear direction. I'll wait till it starts moving up (hopefully) or down, before setting a stop.

hey there Yiehom, good luck with the sugar gap this morning. I do want to start looking at commodities for Sunday night gaps too, though I have not yet reached that point of my "to do" list yet.

Good to hear you are doing ok with the fx gaps at the moment. Agree with you, there seem to be a good few opportunities with Swissie and the Yen. It makes things easier when there's a massive fundamental context to trade within.

Gaps on the S&P (also Russell, Dow, Nasdaq) I am trading right on the market open. Only testing stage at this point, so small size but real trades.

Good luck.

 

[yiehom]

Difficult times in FX gap trading, with another loser week for me. Only my sugar trades saved my week so far. Hope it continues:-0.

 

[options-george]

Difficult times in FX gap trading, with another loser week for me. Only my sugar trades saved my week so far. Hope it continues:-0.

Hi Yiehom, sorry to hear that. I didn't trade the gaps last Sunday. Was travelling back from a sports event in Belgium.

I am down for the gaps this month, but offset this with a couple of trades regarding the BOJ intervention in the market.

The gap trading in the equity markets is also flat. But I am up 5-6% on the swing FX strategy - I think it pays to always have a number of strategies - do you do the same?

George

 

[yiehom]

Hi Yiehom, sorry to hear that. I didn't trade the gaps last Sunday. Was travelling back from a sports event in Belgium.

I am down for the gaps this month, but offset this with a couple of trades regarding the BOJ intervention in the market.

The gap trading in the equity markets is also flat. But I am up 5-6% on the swing FX strategy - I think it pays to always have a number of strategies - do you do the same?

George

Hi George,
Well, no strategy will win all the time and that's where management and patience come into play.
My other strategies include trading the news, same as crude oil inventories, and some commodities purely technically. I am working on having the COT report to help me at it but not there yet.
Today I went short the cotton following the strong resistance at 1.08.
So far okay.

 

[options-george]

Bump.

It's 4.30am and I am still looking at my screen (whilst watching 'Aviator'). Took two FX gap trades sometime before the official market open. Got stopped out on AUDUSD. Am still in the EURUSD trade - gotta say I put the initial stop in an extremely lucky place! I figured trading at £119 per pip makes it worth me staying up, although all I am really doing is shifting the stop every now and then.

The gap trading on the US equities is showing some progress.

Yiehom, how's the trading in Luxemburg?

 

[yiehom]

Bump.

It's 4.30am and I am still looking at my screen (whilst watching 'Aviator'). Took two FX gap trades sometime before the official market open. Got stopped out on AUDUSD. Am still in the EURUSD trade - gotta say I put the initial stop in an extremely lucky place! I figured trading at £119 per pip makes it worth me staying up, although all I am really doing is shifting the stop every now and then.

The gap trading on the US equities is showing some progress.

Yiehom, how's the trading in Luxemburg?

Hi George, trading is very calm here. Out of the banks, not much private traders 😴.
Got stopped in two (long audcad +short gbpnzd) . Two still running (EUR + GBP/ CHF, all short)
I hesitated on OIL, and it would have been the best choice. But you never know.

 

[options-george]

Hi George, trading is very calm here. Out of the banks, not much private traders 😴.
Got stopped in two (long audcad +short gbpnzd) . Two still running (EUR + GBP/ CHF, all short)
I hesitated on OIL, and it would have been the best choice. But you never know.

I ended up getting stopped on my EURUSD position too, but for a significantly reduced loss of some 8 pips - exercised some good stop loss management.

that's good trading on your CHF pairs.

don't you run into big spreads when trading audcad and gbpnzd on Sunday night?
do you also trade the equity indices on a Sunday night?

 

[yiehom]

I ended up getting stopped on my EURUSD position too, but for a significantly reduced loss of some 8 pips - exercised some good stop loss management.

that's good trading on your CHF pairs.

don't you run into big spreads when trading audcad and gbpnzd on Sunday night?
do you also trade the equity indices on a Sunday night?

Rough times on the fx gaps since a couple of weeks, but time shall come...

I never put on my SL right at the opening.
If the gap is not very large, I try not to enter before at least 1 hour has elapsed, for the spread to settle down. It looks like best time to enter is after Tokyo open when trends start.

As for my chf trade, they worked well before the SNB intervention. Fortunately I got in because I had forgotten a second buy stop order on eur/chf pair. An error that by now would have killed me. So I am (accidentally) in this fantastic ride since yesterday.

I have no experience with indices. I looked at the s+p and it was continuing its friday run down. I welcome any idea in that field, while waiting for better times in fx gaps to come very soon, I'm sure.
Yiehom