Gaps/hacks in the charts and can one avoid them? New comment | Forex Factory

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Gaps/hacks in the charts and can one avoid them? New comment

  • #1
  • First Post: Aug 26, 2019 2:13pm Aug 26, 2019 2:13pm
I have some questions regarding the attached picture, depicting a gap/hack on a chart. Whenever these occur, they always near blow my account or otherwise put my account in jeopardy. Hence I have the following questions:

1) Is there any way to predict these bogus gaps/hacks as on pic-related?
2) Is there a proper name for them?
3) What causes them in the first place
4) And most important of all, is there maybe some EA/indicator, that can alert one when they occur?
Attached Image (click to enlarge)
Click to Enlarge Name: Gap.jpg Size: 33 KB
  • #2
  • Aug 26, 2019 3:30pm Aug 26, 2019 3:30pm
Hi

Was this from this morning?
  • #3
  • Edited Aug 27, 2019 2:42pm Aug 26, 2019 5:32pm | Edited Aug 27, 2019 2:42pm
Quoting Redwood99
I have some questions.....
Your pic doesn't show the pair or timeframe, which could be significant.
Anyway, answers to your numbered points:

1) Sadly no.
2) Gaps.
3) If the gaps occur over the weekend, they are the difference between Friday's closing price and Monday's opening. Otherwise they could be the result of either temporary liquidity vacuums; missing data in the price feed; or deliberate broker mispricing (compare your price chart to one offered by a different broker). Sometimes gaps or slippage occurs around 5pm New York time, when swaps are effected, but this is not necessarily frequent, and can be pair and broker dependent.
4) You could only be alerted AFTER gaps occur.

Either close your open positions before the weekend and/or just prior to scheduled high impact news; change to a more reliable broker; trade more liquid pairs/instruments (i.e. major pairs) during on-peak times; or (if the gaps are causing significant drawdown) size your positions smaller. In general, if your strategy can't survive worst case scenarios then it's time to review your risk management.

Google something like "forex gaps" for more info.
  • #4
  • Aug 28, 2019 12:36pm Aug 28, 2019 12:36pm
Quoting hanover
{quote} Your pic doesn't show the pair or timeframe, which could be significant. Anyway, answers to your numbered points: 1) Sadly no. 2) Gaps. 3) If the gaps occur over the weekend, they are the difference between Friday's closing price and Monday's opening. Otherwise they could be the result of either temporary liquidity vacuums; missing data in the price feed; or deliberate broker mispricing (compare your price chart to one offered by a different broker). Sometimes gaps or slippage occurs around 5pm New York time, when swaps are effected, but...
Thanks for the detailed reply!

But yeah, sorry for not including the pair/timeframe. Here's another one I encountered recently, has a timeframe of M5, the pair being GBPJPY (23 Aug 22:25 since it's a little hard to see). I've encountered several of them in the past, where they just appear during a normal weekday (during the day or closer to evening) for seemingly no reason.

So it must be one or several of these culprits: "temporary liquidity vacuums; missing data in the price feed; or deliberate broker mispricing"

4) Could you tell me how please?

The broker I'm using is IC Markets, by the way. Definitely gonna do comparisons with some other one, whenever these occur in future.

Overall I'm doing okay (testing a strategy out on demo before going live), but when these gaps hit, more often than not, a certain substance ends up hitting the fan
Attached Image
  • #5
  • Aug 28, 2019 6:25pm Aug 28, 2019 6:25pm
Quoting Redwood99
Thanks for the detailed reply.......
It looks like a weekend gap to me. Below is a screenshot from my broker (Axitrader) for GBPJPY,M5 and the candle shapes are much the same. Last candle for me before the gap is Friday 23 Aug 23:55 and next one is Monday 26 Aug 00:00. Axitrader is an Australian broker, and its MT4 midnight equates to 1700 hours New York time; IC Markets might differ.
Attached Image (click to enlarge)
Click to Enlarge Name: PPI 174.png Size: 15 KB
Re an alert: the only way I'm aware of would be to write an indicator or EA that sends an alert whenever the open of one candle is more than X pips different from the close of the previous candle. Of course by this time the gap has already occurred.

Hope that explains. This will have to be my last forum post for a while. I need some rest.
  • #6
  • Aug 28, 2019 7:29pm Aug 28, 2019 7:29pm
IMHO, ... Big & Unexpected Gap is just an MMs' lesson for retails & they want you to know how well they can manipulate price movement .... no more!
...want it most but use it worst!
  • #7
  • Last Post: Aug 29, 2019 6:08am Aug 29, 2019 6:08am
Quoting hanover
{quote} It looks like a weekend gap to me. Below is a screenshot from my broker (Axitrader) for GBPJPY,M5 and the candle shapes are much the same. Last candle for me before the gap is Friday 23 Aug 23:55 and next one is Monday 26 Aug 00:00. Axitrader is an Australian broker, and its MT4 midnight equates to 1700 hours New York time; IC Markets might differ.{image}Re an alert: the only way I'm aware of would be to write an indicator or EA that sends an alert whenever the open of one candle is more than X pips different from the close of the previous...
I see, will definitely be useful if I decide to hire someone to program an EA like that, thanks m8
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