The gap has blown many accounts but it turns out the very same threat can be used as a
weapon to generate profit. Since forex market operates from Monday to Friday and it is
a 24 hour market, we actually have a chance to capitalize and get some profit. Forex
market closes Friday 23:59 pm and opens on Monday 00:00 am, in most cases the
market makes has a habit of opening with a huge gap on Mondays, mostly for common
currency pairs like USDJPY and EURUSD to name a few. The biggest question remains,
what causes a Gap on the forex graph? It is caused by many factors, mostly the news
running through the weekend, sometimes on Friday evening there are reports as well.
We have to keep in mind that commodities like (Gold, Silver, and Oil) have the power to
influence the US dollar.
Meetings by respective government officials who meet during weekend can also cause a
gap; the decisions taken by the central banks over the weekend have the power to
cause a gap when the market opens on Monday as well.
How to target the gaping
On Friday, at 23:45 (15 minutes before the market closes) you need to open a chart for
USDJPY (or any other currency pair like GBPUSD), determine the average movement and
add 150 pips from the moving price as your entry level for buy stop (pending order) and
subtract 150 pips from the moving price as your entry level for sell stop (pending order).
Remember do not set stop loss and take profit, reason being the gap is always a
disadvantage for those two. Here is an example:
Moving market price: 117.450
Entry level for buy stop: 117.600
Entry level for sell stop: 117.300
Let’s assume the market closed at 117.450 at 23:59 pm on Friday and you set both
pending orders for buy and sell stop, with an expiry date and time of one minute after
00:00 (on Monday) which it has to be 00:01 am so that your orders can expire provided
there was no gap at all. Keep in mind that on Sunday at 23:50 (10 minutes before the
market opens) you need to be on the graph so that at 00:00 am (Monday) you can
simply close the trades manually with the profit you find.
Remember whenever there is a gap on the market, it has to close. This means if you are
not on the market when it opens, you might just experience losses while everyone else
walked away with profit. If the market does not allow you to close the trades at 00:00
am, do not worry, the brokers are still adjusting with the information from the
interbank, just keep on pressing/clicking the close button.
weapon to generate profit. Since forex market operates from Monday to Friday and it is
a 24 hour market, we actually have a chance to capitalize and get some profit. Forex
market closes Friday 23:59 pm and opens on Monday 00:00 am, in most cases the
market makes has a habit of opening with a huge gap on Mondays, mostly for common
currency pairs like USDJPY and EURUSD to name a few. The biggest question remains,
what causes a Gap on the forex graph? It is caused by many factors, mostly the news
running through the weekend, sometimes on Friday evening there are reports as well.
We have to keep in mind that commodities like (Gold, Silver, and Oil) have the power to
influence the US dollar.
Meetings by respective government officials who meet during weekend can also cause a
gap; the decisions taken by the central banks over the weekend have the power to
cause a gap when the market opens on Monday as well.
How to target the gaping
On Friday, at 23:45 (15 minutes before the market closes) you need to open a chart for
USDJPY (or any other currency pair like GBPUSD), determine the average movement and
add 150 pips from the moving price as your entry level for buy stop (pending order) and
subtract 150 pips from the moving price as your entry level for sell stop (pending order).
Remember do not set stop loss and take profit, reason being the gap is always a
disadvantage for those two. Here is an example:
Moving market price: 117.450
Entry level for buy stop: 117.600
Entry level for sell stop: 117.300
Let’s assume the market closed at 117.450 at 23:59 pm on Friday and you set both
pending orders for buy and sell stop, with an expiry date and time of one minute after
00:00 (on Monday) which it has to be 00:01 am so that your orders can expire provided
there was no gap at all. Keep in mind that on Sunday at 23:50 (10 minutes before the
market opens) you need to be on the graph so that at 00:00 am (Monday) you can
simply close the trades manually with the profit you find.
Remember whenever there is a gap on the market, it has to close. This means if you are
not on the market when it opens, you might just experience losses while everyone else
walked away with profit. If the market does not allow you to close the trades at 00:00
am, do not worry, the brokers are still adjusting with the information from the
interbank, just keep on pressing/clicking the close button.
