Is Somebody Exploiting The Sunday Market Open? | Forex Factory

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Is Somebody Exploiting The Sunday Market Open?

  • #1
  • First Post: Edited 5:51am Dec 2, 2008 5:32am | Edited 5:51am
I looked at the history of multiple majors, and the fact is that after the initial gap(MARKET OPEN TIME), pair will correct itself at least the third of the initial gap, if not the whole! And every time this seems to last 80minutes, that is the time that gap closing is at the peak! This seems like a plausable
scenario to exploit! Just trade at the beggening of the week
(broker open time).....put a buy or sell depending of the gap, end try
to exploit the "gap fill". I tried that live this week at EU and GC, and made some good pips on it!

Is anyone here exploited this!???
....this ea will trade any gap!
Attached File(s)
File Type: mq4 GAPea.mq4   5 KB | 1,121 downloads
forexflash
  • #2
  • Dec 2, 2008 6:04am Dec 2, 2008 6:04am
I've found out that your MT4 Gaps aren't really gaps.
I tried out DBFX Demo account a while ago and their trading does start earlier.
Often prices goes down 50-70 pips in a normal way and when your MT4 broker starts you see this as a gap.
  • #3
  • Dec 2, 2008 3:57pm Dec 2, 2008 3:57pm
Quoting Tjpld
I've found out that your MT4 Gaps aren't really gaps.
I tried out DBFX Demo account a while ago and their trading does start earlier.
Often prices goes down 50-70 pips in a normal way and when your MT4 broker starts you see this as a gap.
exactly, people still trade during the weekend, it's just that with retail brokers you can see it or participate in it. i use DBFX too, and you can actually see the trading for most of the weekend. it's just super erratic because of the low volume.

so basically, you aren't trading a gap, your trading a move. its the same thing as selling at the top of a trend a third of the way down the trend. now, it's not exactly the same, but its the same principle.

it's a pretty good idea though if it works. try it on trends or small moves too and see what happens. for example, if there has been a 100 pip trend from 1.2503 to 1.2603, sell off of 1.2603 down 33 pips to 1.2570.
  • #4
  • Oct 29, 2009 2:53pm Oct 29, 2009 2:53pm
Quoting FOREXflash
I looked at the history of multiple majors, and the fact is that after the initial gap(MARKET OPEN TIME), pair will correct itself at least the third of the initial gap, if not the whole! And every time this seems to last 80minutes, that is the time that gap closing is at the peak! This seems like a plausable
scenario to exploit! Just trade at the beggening of the week
(broker open time).....put a buy or sell depending of the gap, end try
to exploit the "gap fill". I tried that live this week at EU and GC, and made some good pips on it!

Is anyone...
Hi Forexflash,

I think I've managed to email you a reply, but if you don't get it, please get back to me and I'll try to remember what I said!

Yes, I've traded the gap twice, both time profitable, made 80 pips on two pairs each time.

But, I need anEA to help me optimise SL, TP, TS. I'll give yours a go and see what it can do.



Cheers,

Mike
  • #5
  • Oct 29, 2009 9:31pm Oct 29, 2009 9:31pm
Nice work, you potentially found an edge.

Ofcourse you just told 75000 other traders about it, so you'll probably get killed on it next week.

Good luck.
  • #6
  • Oct 29, 2009 10:50pm Oct 29, 2009 10:50pm
Hey mate

As others have said, this is not a real gap. The illusion of the gap is created due to the fact that your broker closes at xx:xx on friday and opens up again at xx:xx on sunday. In actual fact, the forex market trades 24/7. It is an over the counter market and as such is traded at various locations and various dealerships, not just with your broker. If you watch live quotes over the weekend with dealers that offer service on the weekend (eg ozforex), you will notice that they do move.

The thing is, they don't tend to move very much at all over the weekend period. This has always confused me a little and I have never quite got a grasp on this phenomenon. I mean, there is new information coming out over the weekend (not like in the week, but there is still stuff going on), but I never realy see any real moves untill Oanda opens (earliest opening broker to my knowledge) at around 4-5am Sydney time. If it was a truely free market, I would expect to see Oanda opening at 200+ pips away from there close price every now and then, but this just doesn't seem to happen. In fact, Oanda seem to be so confident that there will be no significant movement over the weekend that they freeze there rates and allow their traders to buy and sell over the weekend (with a large spread).

The only reason I can come up with is that it is in the best interest of the banks to keep the rates within a very narrow range over the weekend untill real interbank trading begins around 7am Sydney time.

Really hoping Darkstar can shed some light on this issue for me
  • #7
  • Oct 30, 2009 12:13am Oct 30, 2009 12:13am
Quoting Darkstar
Nice work, you potentially found an edge.

Ofcourse you just told 75000 other traders about it, so you'll probably get killed on it next week.

Good luck.
lolol

yes gaps are profitable, but there is more too it like EVERYTHING else you read and hear about. But kudos to you for digging a bit deeper then the next indicator thread.
  • #8
  • Oct 30, 2009 3:55am Oct 30, 2009 3:55am
Quoting mbqb11
lolol

yes gaps are profitable, but there is more too it like EVERYTHING else you read and hear about. But kudos to you for digging a bit deeper then the next indicator thread.
Rockrat used to love them. Is he still around in PF?
  • #9
  • Edited 4:42am Oct 30, 2009 4:27am | Edited 4:42am
Quoting Darkstar
Nice work, you potentially found an edge.

Ofcourse you just told 75000 other traders about it, so you'll probably get killed on it next week.

Good luck.
Sam Seiden preaches about doing this on fxstreet but mostly with futures. He will look for prices gapping up or down into a previously defined supply/demand level, and as it hits this level it reverses. He calls this the 'novice gap' as it is novices that are buying or selling into previous supply/demand (although I suspect the pro's caused the gap to lead the novices into the wrong direction), usually after strong move in price.

Alternatively his 'professional gaps' are gaps that are created where there is no supply/demand levels to prevent the gap move gaining further momentum and there is less chance of the gap being filled on a reversal after the move.
  • #10
  • Nov 2, 2009 2:07pm Nov 2, 2009 2:07pm
Quoting Darkstar
Nice work, you potentially found an edge.

Ofcourse you just told 75000 other traders about it, so you'll probably get killed on it next week.

Good luck.
Hi Darkstar,

I don't mind. That's the reason why I put it on a public forum - to give others an idea and maybe get some grey cells rubbing together and producing some heat.

Cheers,


Mike
  • #11
  • Edited 7:59pm Nov 5, 2009 7:37pm | Edited 7:59pm
Just because it looks simple to trade when you scroll back on your charts it does not make it simple to trade live!

The more time you spend trading the more you will understand this. Here is an example.....

Throw a 5sma and a a 35ema on a 1hr EUR/USD chart.

-When the 5sma crosses about the 35sma go long
-When the 5sma crosses below the 35 sma go short.

Look back and you will see almost every trade would be successful. YES! Start trading it tomorrow you will be a millionaire overnight........

In reality though any professional trader knows that moving average methods do not work.

Just because it looks good when you scroll back, it doesn't mean it's good when traded live.

I understand gaps are not the same as moving average methods. However, the concept certainly is the same.
  • #12
  • Nov 6, 2009 4:40pm Nov 6, 2009 4:40pm
Quoting forex4noobs
Just because it looks simple to trade when you scroll back on your charts it does not make it simple to trade live!

The more time you spend trading the more you will understand this. Here is an example.....

Throw a 5sma and a a 35ema on a 1hr EUR/USD chart.

-When the 5sma crosses about the 35sma go long
-When the 5sma crosses below the 35 sma go short.

Look back and you will see almost every trade would be successful. YES! Start trading it tomorrow you will be a millionaire overnight........

In reality though any professional...

Thanks for your opinion; I'll bear it in mind. So far, there seem to be a million and one reasons given as to why it shouldn't work, but I've often heard it said that if one wants to be successful one should do the opposite of what the herd is doing. What more reason do I need to investigate this further!


Cheers,

Mike
  • #13
  • Nov 6, 2009 4:59pm Nov 6, 2009 4:59pm
I always give that same advice "don't follow the pack". From that aspect you're right, give it a shot and see how it turns out!

Personally I do not trade with the pack..... I hate indicator based systems and indicators in general. I trade price action analysis.

What Is Price Action Analysis?

Analysis that requires you to think about how/why the market moves.

- Support and resistance lines (the ones you place on your own)
- Candlestick analysis
- Trend lines

The truth is if you fully understand price action methods (especially candlestick analysis) you can make any method profitable. If you trade just gaps it probably will not work. However, gain a firm understanding on candlestick analysis and use it in conjunction with gaps you can probably make pips.

(By candlestick analysis I do not mean the basic 'this is a doji and its a reversal patter' type of stuff)
  • #14
  • Nov 6, 2009 5:27pm Nov 6, 2009 5:27pm
Quoting forex4noobs
I always give that same advice "don't follow the pack". From that aspect you're right, give it a shot and see how it turns out!

Personally I do not trade with the pack..... I hate indicator based systems and indicators in general. I trade price action analysis.

What Is Price Action Analysis?

Analysis that requires you to think about how/why the market moves.

- Support and resistance lines (the ones you place on your own)
- Candlestick analysis
- Trend lines

The truth is if you fully understand price action methods (especially...
Just for a laugh, if you have the time, maybe you would care to look back at GBPUSD for as far as you like, and see how many pips you can get trading in the opposite direction to the Friday/Monday gap. Should be at least 40 pips each week. Also, if you were to trade with the trend (using your Turbo-Hindsight Indicator, of course :-) ) I'll bet you could bag at least 100 pips too. Maybe even put two opposite trades on at the Monday open and see what you find on your hook (unless you're in the USA).... That should make enough to pay for the weekly shopping bill.

So far, I have had three winning weeks so even if I have a loss next week, that still leaves me 20 pips up. I use TP=40 SL=100

Have a restful weekend,


Mike
  • #15
  • Nov 6, 2009 6:53pm Nov 6, 2009 6:53pm
My charts don't gap. Either way who am I (or any of us) to say anything about your method? If it makes you pips then fantastic, keep trading it until it stops making pips or you're ready to retire, whichever comes first.
  • #16
  • Edited 10:20pm Nov 6, 2009 8:41pm | Edited 10:20pm
Quoting forex4noobs
I always give that same advice "don't follow the pack". From that aspect you're right, give it a shot and see how it turns out!

Personally I do not trade with the pack..... I hate indicator based systems and indicators in general. I trade price action analysis.

What Is Price Action Analysis?

Analysis that requires you to think about how/why the market moves.

- Support and resistance lines (the ones you place on your own)
- Candlestick analysis
- Trend lines

The truth is if you fully understand price action methods...
That's about where I'm at, only s/r lines and TL's are about the same idea-wise, so I just call them all the latter (even though proper s/r's such as 00/50 aren't too bad centering price.)
What you say about thinking is very true: Getting those TL's to correlate one after another with the price-time line's next direction seems to be what it's all about, to set up candlestick study. I like to link making TL's upon candlestick patterns, in addition, further limiting what the study, which can be unwieldy, has to deal with.

On Sunday opens: Here's a chart that brings the idea home. Even though the price-time line is perfectly smooth (on 1*1) before and after Sunday open, there it is, the gap that closes.
Attached Image (click to enlarge)
Click to Enlarge Name: 15441186.jpg Size: 97 KB
  • #17
  • Edited 5:52am Nov 8, 2009 5:29am | Edited 5:52am
Quote
Just because it looks simple to trade when you scroll back on your charts it does not make it simple to trade live!

The more time you spend trading the more you will understand this. Here is an example.....

Throw a 5sma and a a 35ema on a 1hr EUR/USD chart.

-When the 5sma crosses about the 35sma go long
-When the 5sma crosses below the 35 sma go short.

Look back and you will see almost every trade would be successful. YES! Start trading it tomorrow you will be a millionaire overnight........

In reality though any professional...

I am only a month old in forex markets but i have heard a lot of good things about about you- Nick and Forex4noobs. I have also chatted on your website chat room during london trading hours.

Why do you think 5 sma and 35 sma on a 1 Hour chart is difficult to trade live?
  • #18
  • Last Post: Nov 8, 2009 6:55am Nov 8, 2009 6:55am
Quoting FOREXflash
I looked at the history of multiple majors, and the fact is that after the initial gap(MARKET OPEN TIME), pair will correct itself at least the third of the initial gap, if not the whole! And every time this seems to last 80minutes, that is the time that gap closing is at the peak! This seems like a plausable
scenario to exploit! Just trade at the beggening of the week
(broker open time).....put a buy or sell depending of the gap, end try
to exploit the "gap fill". I tried that live this week at EU and GC, and made some good pips on it!

Is...
very nice observation. props to you.
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