EUR/USD -Market Gap

I really can't figure out why the market gap happened so frequent nowadays???? It seems that it happens at least once a week or fortnightly. What is happening to the market?? I was told it was never never like this. Can someone help me to explain why?

Hello can you please post a chart showing the example of the price gaps that you are referring to.

Have a great day,

Look at the chart -200 pips in 2 days!

Please see the attached chart. This is s a 30 minute chart from the EUR/USD for this week. I see large moves which is very typical of the volatile FOREX market. However I do not any price "gaps" as you say there are. If you want see price gaps point them out and I will stand corrected. Have a great day and Happy Trading.

Most refer to a "gap" as movement that occurs from the time a market is closed to the time it is opened. So for instance, if you have a broker that closes at 5PM Est Friday and Opens at 8PM Est Sunday, if movement happens from close to open, say 100 pips, that will be a 100 pip gap.

Gaps never actually happen in FX, as there are plenty of brokers that are open 24/7, just with larger spreads.

Equity markets (NYSE, NASDAQ etc) suffer from gaps very often. It isn't rare that they will gap up or down .50% or so on open from the previous days close.

I think what you are wondering about is the "volatility". Normally FX isn't this active. What we are seeing as of last week is hightened volatility in the markets, mostly because of the carry trade factor.

I'm having a high buy based on the news that USD will be weaken. Just hope that you will move up again.

Actually, volatility is reduced from what it was a few years ago. To see this, use something like Average True Range on short periods on the dailies (or weeklies) for the last decade or so. (in fact, if you go back before late May of 2006, I thinkyou'll see alot more 200+ pip days than currently. There seems to have been some sort of behavioural change in the markets around then, perhaps even China just enforcing it's currency band).

C-mon guys, view this as technical analysis's.


What this chart is telling us is that this low volitity is nothing new. As a matter of fact, it has marked major turning points in the over all market trend.

I plan to hold these positions a long time. At least a portion any way. Wouldn't it be cool to end up with a 1-2k pip profit on 1 position?

Every one should see this ATR for what it is. The calm before the storm. Big move on a major scale is likely to be at hand.

Dave

I dunno dave, I have trouble relating to indicators that take a year or two to ramp up
But my main point was for the OP, who seemed a little shocked by the size of the move. Something he shouldn't be, as in the long run they are more the rule than the exception. Maybe there is a big price move in the wind, but in the ST I'd look for more probable causes. For example China is trying to keep the majors in a dirty float band about twice as wide (on a daily basis) as the one for the USD/CNY. We've also seen in the last couple of years a big growth in algorithmic trading, which has (among other things) an aim to take advantage of smallish arb opportunities on a frequent basis - i.e. the sort of opportunity that would come by executing two legs of a triangle to compensate for a big move on the third.. Also automated trade placement for large volume trading - its aim being to disturb the market as little as possible while the trade is being effected. That's sort of counter to the older hand trader style, where the idea was to push through the trade as fast as you could get away with so you & your buddies could frontrun it. Or so I'm told .

Look at the pattern formed right now at the open of the sydney session on the 4 hour chart, a very obvious gap. Although unusual they do happen !

I suspect they are more common between 27 july and the end of august, when there is low volume.