GAPS
I'm sure most here are aware of "Gaps" and why they occur, but have you taken a look at the statistics and probabilities of the "gaps" being filled the same trading day?
Gaps in the forex market usually occur during the weekend between previous friday's close price and current monday's open price. The gap itself appears due to the fact that the forex market trades 24 hours, 7 days a week whilst most forex brokers are open for currency trading from Monday 0:00 am ET – Friday 4:00 pm ET. Thus on mondays, the broker needs to update its currency prices which may be different from friday's closing prices.
Type Of Forex Gaps
1) A bullish gap occurs when last friday's close price is lower than current monday's open price.
2) A bearish gap occurs when last friday's close price is higher than current monday's open price.
Case Study on Forex Gaps
The study on gaps in the forex market was conducted between 2002 and 2010, and examined over 25 currency pairs. The following table shows the best gap performers amid the 25 currency pairs.
Currency Pair% Forex Gaps Filled The Same Day
GBP/CAD - 88.60%
EUR/CAD - 82.70%
EUR/AUD - 81.60%
GBP/CHF - 78.75%
USD/CHF - 77.71%
AUD/JPY - 74.35%
GBP/USD - 72.18%
EUR/USD - 66.15%
GBP/USD: From 2002 through 2010: 72 % of the GBP/USD "gaps" were filled the same trading day!
Hope this helps!
I'm sure most here are aware of "Gaps" and why they occur, but have you taken a look at the statistics and probabilities of the "gaps" being filled the same trading day?
Gaps in the forex market usually occur during the weekend between previous friday's close price and current monday's open price. The gap itself appears due to the fact that the forex market trades 24 hours, 7 days a week whilst most forex brokers are open for currency trading from Monday 0:00 am ET – Friday 4:00 pm ET. Thus on mondays, the broker needs to update its currency prices which may be different from friday's closing prices.
Type Of Forex Gaps
1) A bullish gap occurs when last friday's close price is lower than current monday's open price.
2) A bearish gap occurs when last friday's close price is higher than current monday's open price.
Case Study on Forex Gaps
The study on gaps in the forex market was conducted between 2002 and 2010, and examined over 25 currency pairs. The following table shows the best gap performers amid the 25 currency pairs.
Currency Pair% Forex Gaps Filled The Same Day
GBP/CAD - 88.60%
EUR/CAD - 82.70%
EUR/AUD - 81.60%
GBP/CHF - 78.75%
USD/CHF - 77.71%
AUD/JPY - 74.35%
GBP/USD - 72.18%
EUR/USD - 66.15%
GBP/USD: From 2002 through 2010: 72 % of the GBP/USD "gaps" were filled the same trading day!
Hope this helps!