trader_dante
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Most people seem to have latched onto the gap section part of my PDF.
I make money most weeks trading these gaps so I will try and go over the trades I do or the gaps I see each week (if they occur and when I get time).
I have a few points to make on last nights gaps.
1. Don't be unduly alarmed as to the size of the gap. Chart 1 shows the GBP/JPY which gapped just under 100 pips. It filled all the way with no drawdown if you hit it on the open.
2. Even if you think the gap is going to fill all the way, remember the levels in between. Chart 2 shows the 1.5250 level on Cable which one should have got at least half out of or made some move to tighten their stop.
3. Remember to read the PA constantly and not be married to a trade idea. USD/CAD in chart 3 looked good. It opened with a big gap. After the first hour we had a pin and a double bottom chart pattern. At this point, this looked like it had the highest probability of filling of most of the gaps last night. However, it tracked sideways, making no real effort to get that gap filled. By the time it finishes forming the bearish engulfing (marked with an arrow), you should be getting out for a small winner, a scratch or a very small loss (depending on your entry of course - I always enter on the open or before it if the broker I am trading with lets me)
4. I think I already pointed out that after filling the gap, most markets trade in the direction the market gapped in. I know more and more of you are now cutting and reversing their successful gap trades, only to capture all the pips on the way back up/down. Well done! It worked this week like last week.
5. Finally, here is last nights trade for me. Chart 4 is my entry and exit on a 5m. I usually get out before the gap fills completely.
I make money most weeks trading these gaps so I will try and go over the trades I do or the gaps I see each week (if they occur and when I get time).
I have a few points to make on last nights gaps.
1. Don't be unduly alarmed as to the size of the gap. Chart 1 shows the GBP/JPY which gapped just under 100 pips. It filled all the way with no drawdown if you hit it on the open.
2. Even if you think the gap is going to fill all the way, remember the levels in between. Chart 2 shows the 1.5250 level on Cable which one should have got at least half out of or made some move to tighten their stop.
3. Remember to read the PA constantly and not be married to a trade idea. USD/CAD in chart 3 looked good. It opened with a big gap. After the first hour we had a pin and a double bottom chart pattern. At this point, this looked like it had the highest probability of filling of most of the gaps last night. However, it tracked sideways, making no real effort to get that gap filled. By the time it finishes forming the bearish engulfing (marked with an arrow), you should be getting out for a small winner, a scratch or a very small loss (depending on your entry of course - I always enter on the open or before it if the broker I am trading with lets me)
4. I think I already pointed out that after filling the gap, most markets trade in the direction the market gapped in. I know more and more of you are now cutting and reversing their successful gap trades, only to capture all the pips on the way back up/down. Well done! It worked this week like last week.
5. Finally, here is last nights trade for me. Chart 4 is my entry and exit on a 5m. I usually get out before the gap fills completely.