This time I will discuss about how to exploit the gap that usually happens when the market opened at the beginning of the week. As we know, the forex market is closed over the weekend, to be exact closed on Saturday at 04.00 pm and reopen on Monday at 04.00 am. On the other hand, the factors that affect the value currency a State, such as the political economy of the country concerned, it still continues to run, because of human activity in general is still running. That is why, it is very likely to occur in the open market at the beginning of the beginning of the week, there is a gap or a price jump, either up or down and the final price when the market closed.
Gap which often occur at the beginning of this week made many traders avoid positions holding remain open during the weekend when the market is closed. It makes sense really, because when the market closes we will not be able to do anything against our position is still open. In fact, anything can happen. Carried to its extreme, political and economic conditions of a country may change drastically during the weekends, which makes the value of the currency may change drastically without us can do anything about it because the market is closed.
This gap can indeed be a nightmare for traders who taking by SL position when the market opened at the beginning of the week, but could also be an opportunity for us who want to take advantage of the gap. Utilizing the gap at the beginning of the week, principle similar to utilize the movement of the news release as quickly as we discussed earlier. Let us examine the following chart:
If the price on Saturday at 03:58 is 1.5620, then we put pending order buy stop 10 pips above it, which is at 1.5630 with TP about 20 pips at 1.5650. Post a stop sell order is also pending for approximately 10 pips below the price before the market closed, ie at 1.5610 with TP about 20 pips at 1.5590.
Shortly after the market opened on Monday at 04.00 pm, check the position of pending orders. Cancel the order has not been touched, in the above example is his pending sell order. Thus we have gotten about 20 pips when the market is open. The downside of this method is, we have to "sacrifice" to wake up shortly before the market closed and shortly after the market open.
Ok, the above is just an example, if we want to take advantage of the gap occurs at the beginning of the week. The choice is entirely in your hands, whether to avoid Gap to close all positions at the weekend, or just take advantage of the Gap intentionally put the position just before the market closed.
