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01-03-2012, 02:35 PM #1BannedThis user has no status.I am:----
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How to trading with price gaps in the forex market
There are many ways that can be used to take advantage of the price gap and the next section presents some strategies for the use of price gaps in the stock market or forex market or any other financial market:
1 - can be performed by some of the participants in trading buy on the basis of financial or technical paper particularly financial, which leads to the formation of a gap in the price the next day. For example, when the expected profits or the issuance of financial statements after the end of the trading session, the participants in the trading of those who purchase or sale, as expected from the lists, hoping to open the trading prices of gaps in the price the next day.
2 - The trader can buy or sell securities in the high liquidity in a large movement at the beginning of the securities, based on the expectation that the gap formed will be filled and then continue to the original direction of the security. For example, it is possible that the trader to buy in the case of a gap emerging and that when filled, believing that the trading prices will rise again and again in the event that the main thrust of the paper the financial support that expectation.
3 - could be a trader to take a decision opposite to the movement of securities, opposite to the direction of the price gap. For example, if you open the security gap emerging, it is possible that the selling in the belief that the gap will be bridged and thus it is possible to take advantage of the decline in the price of trading.
4 - The trader could buy when the price of trading up to previous levels of support, after filling the price gap. But there are some things that you should always remember when trying to do such a thing:
- Once the price begins to bridge the price gap, it rarely stops, because it is within the price gap itself has no support and resistance levels is selected.
- Fatigue and continuity gaps can be used to predict the price movement of trading in two different directions, so it must be sure greatly from the health divide the classification price before making a decision of its own.
- Often individual investors are who they are causing movements random rates, while institutions and investment funds have their movement more rational than individuals, so it's best to wait until the price movement of trading, before you take investment decision an important role in your portfolio.
- Must also make sure that trading volumes. For example, in the case of gap formation a significant rise in trading volumes, the gap that often penetrate the gap, while the gap in the case of fatigue, the volumes are low in general.
To try to connect all those ideas with each other through an example explains how to take advantage of price gaps in circulation and we will use the currencies in the forex market in the presentation of examples to explain, these are some rules that we must follow up when trading on the basis of price gaps with the currencies in the Forex:
1 - must be the direction of the deal in the same direction as the main direction of prices (preferably refer to the graph of the hour in the case of currencies in the forex market).
2 - must be the husband or the fact that the currency has a price gap above or below the level of support or resistance to important technical and seems to be clear on the chart for thirty minutes.
3 - must be a price correction to the original level of resistance, and that means closing the gap that was created, and then come back to the level of price movement by former resistance turned support.
4 - There must be a candle to indicate the continuation of the movement of prices trading in the same direction on the price gap, and this will help to ensure the continued trend of gap after that.
He noted that because of the continuing market to work for 24 hours a day, the price gaps often appear in the forex market on the charts with time frames high. And are often the gaps due to the issuance of any news or reports are vital lead to the movement of prices trading sharply and strong in a particular direction, or in times of low liquidity in the market significantly and that when you close one of the world market in the world for a holiday of its own, for example. But you should know that the gaps that appear most clearly on the time frames in the forex market occurs when the sudden news show during the weekend.
Possible to note that in Figure (1) that after the former composition of the price gap composition of Japanese long candle, led to continued high prices of trading after that. But stopped at the resistance level and then decline resumed again, and the trading price of closing the gap, but have dealt with that level as the level of support. Technically, the price gaps can be used such as levels of support and resistance according to the position for the movement of prices of trading. When the correct trading prices and the slight decline to the levels of price gap, it is possible for a trader to buy and then a trader may have benefited from the rise following the gap.
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03-07-2013, 02:08 PM #2MTV RegularThis user has no status.I am:----
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Re: How to trading with price gaps in the forex market
I think that the traders should trade in forex market in the weekend and the offend of the week. This time market remains more stable where it is easy to make their trading decision and the traders can make money from this time frame.
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