In this episode of Truth About FX, Walter and Hugh dig into various ways of making use of those gaps in the charts, and how you could profit from them. How big is it? And what are some of the strategies that you could use to take advantage of this? Find out more on this episode…
Download (Duration: 03:29 / 3.99 MB)
In This Episode:
00:27 – gaps
01:38 – how big?
02:01 – come and see
There’s so many different strategies [Click To Tweet].
Make sure that you keep using the same timeframe [Click To Tweet].
There are many different ways to profit from the gap [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Is there any way to profit from gaps on the charts?
Walter: Absolutely. We look at these every week. In the show notes below, you’ll see the link to the free webinar that I do every week.<style=”font-weight: 400;”> We look at these, it’s pretty simple. There are many different ways to do it.
The biggest question you have to ask yourself is when you trade these gaps, is the gap in alignment with the overall recent move of these market?
For example, if the market is going up — let’s say the EUR/USD is going up — and then you see a gap down so when that gap happens, you expect the market to go up to close that gap.
That makes a lot of sense to people but when you see the market going up — let’s say the EUR is going up — and then on Sunday, a gap opens up so it has to actually retrace and fall down to close that gap.
Those are the sorts of questions you have to ask yourself. The big question here is going to be, is it with the overall movement of the market? It could be a sideways market, it doesn’t matter. But, if the market has been going up, are you getting that gap down so that it has to keep going to close it or is it a counter trend gap?
The other thing to ask yourself is how big is this gap. I don’t even look at them unless they’re at least 25 pips. If they’re fewer than 25 pips, it is off the board for me. There’s so many different strategies. You can also trade them after they’ve closed.
There are many different ways to trade them. You do not have to do it right when they appear. You can trade them when they close. There’s lots of things you can do there. I would encourage you, if this is something that interests you, to sign up for the free webinar on the link below.
You can come and see how we do it. You could get the ebooks and all that even if you cannot make it to the webinar. Sometimes, it’s difficult for people in Europe to come because it’s really late for them.
There are definitely many different ways to do it. Some people do crazy things like, they use these wild stop losses that are really far away and stuff like that. That can hurt when they do not work out but, yeah, there are many different ways to profit from the gap.
You just have to make sure that you keep using the same timeframe, the same closing time on your charts and do that. I would encourage people to come on to the webinar if that is something that interests you.
Hugh: Alright, cool! Do you use any alert indicators to tell you about gaps?
Walter: I don’t. Do you? I mean, I know I’m sure they’re out there, right? I just, basically… See, for me, the markets open Monday morning and so all I do is I just — because I had the webinar I usually just sit down 20 minutes for the webinar and have a look and see.
Usually, I have things like if the Euro has a gap, obviously the EUR/NZD, EUR/GBP, EUR/JPY they probably all have gaps too and that sort of things. They go in groups. But, I don’t use any alerts. Do you use any alerts or anything like that?
Hugh: No, I don’t use any of that. I was just wondering.
Walter: It makes sense. I’m sure they are out there. It’s a good question. I just don’t do it since I’m going to be at the webinar anyway.
Hugh: Cool. Thanks, Walter.
Walter: Thank you.