Sundays EST Open

What is so bloody special about Sundays?

Where can I learn why a pair opens at a different level on Sundays than it's Friday close? Are Forex Futures traded 24/7? Why x amount difference? Why sometimes higher, sometimes lower, sometimes really higher or lower? Who or what decides?

Take the USD/JPY today(Sunday where I sit), it opened about 111 pips higher than Friday's close then tanked for 106 or so pips and is now above the open.

I could see the impulse head towards Friday's close and placed some limit orders to pick up a rebound, I was a few pips off so I closed the orders as the next 15M bar started retracing.

Are there sources of information that decides not only what a pair will open at on Sunday but what direction it will likely go (in the near term if nothing else?)

I'm searching around online and in the vast stores of knowledge on FF, but not quite finding what I'm looking for...yet.

Interbank currency flows don't stop on weekends. If there is no liquidity at the previous levels when the markets open, the gap occurs.

In my opinion, at this time the markets are being driven by the fundamentals out of Europe and their entire crisis. Over the past several weekends you have been having big news announcements coming out.

This weekend you have the 500 Billion Euros rescue package. The larger and bank traders are very in tune with these rumours before they come true and anticipate the action. In fact, prior to Friday close, you could find info that a substantial package was going to be put together over the weekend.

For a small trader right now it can be dangerous to hold trades over the weekend or you can attempt to play the gap with your understanding on what the rumour means. No different then playing other news events.

Not for me but some will do it and do it successfully.

This should be the last big announcement for a while (hopefully). The next one will be it didn't work.

Thanks enivid and flyer415!

I have read several threads and articles regarding "the gap" and "Playing the Gap"...no, "the gap" is not an over-marketed clothing store or an abomination of an Eastern Tennessee mouth harp, it is simply the difference in price action from the time a data feed for your broker gets shut off to the time it gets turned back on. Is that oversimplified?

It seems the Forex market does not just go into sleep mode over the weekend... reports, news, sentiment, number of participants, liquidity can affect the "opening" price of a pair...however, I still do not understand who or what exactly makes that decision and says, "On Sunday we will open at XXX.XXXX"

I read some opinions, as I saw no verifiable sources, that some brokers allow forex trading over the weekend and this accounts for the gap as those that don't trade with XYZ broker do not have the data that transpired over the weekend.

I don't even care so much about trading the gap as just understanding the reasons and impetus behind it. I'm going to work on a script to analyze the Sunday gaps (shoot, I should search for that first though too, probably some nice historic data on that).

This article helped me: http://www.investopedia.com/walkthro...-term/gap.aspx


I found this interesting tidbit on blogs/fxstreet:

"I made a program for Metatrader that enters trades on sunday opening gaps that are bigger than 10 pips. If the gap was bigger than 10 pips the position is opened when the price is lower than the opening bar by the gapsize-gapsize/2 or conversely gapsize+gapsize/2. This is because the gap usually continues to widen a bit more. All gaps are filled usually within 2 days maximum. This expert advisor is attached to every currency available on the brokerage platform you are running. If the market gapped down, we go long. If the market gapped up, we go short. That’s it and it works. Use on hourly charts. Only opens a trade on Sunday."


Lol. True dat.

I wrote an EA and have been playing these gaps for the past 2 months. I had a losing trade once, but it is remarkably profitable. Somebody claimed he had 70%+ success in 2009, I think it was on a BabyPips forum.

Yesterday, the GBP was a nice 47 pipper for me.

If you want to 'see' what's happening over the weekend, there are forex brokers that never close.
I trade with Oanda and I can see the prices changing on Sunday before the MT4 shops open up.
Grab a demo, see for yourself.

Can you position or adjust your trades during that time?

Sure, you can do anything you want..... for a price. The weekend spreads are high. Maybe around 20 to 40 pips. Understandable.

Thanks Price and CodeMesiter!

I installed the Oanda demo (thanks Price) and will definitely be watching the weekends. Meanwhile, I am looking at the gaps for EUR/USD and USD/JPY and do indeed see some trade opportunity per the expectations provided in the comment regarding a gap EA. Had I known that the gaps typically get filled and then retrace, I would have placed my limit orders on Sunday quite differently.

I have read the cautions about gap trades and playing the Sunday opens, seems the most conservative folks trade only Monday - Thursday (which is what I typically do) but the gaps do appear to be 'fairly' predictable after the Sunday open...by that I mean the gaps typically get filled and then retrace.

I definitely have my analyst hat on now.

I know this is going to sound silly, and that's fine, I am here to learn and share: I surmised that the gaps were caused directly by the brokers in an attempt to recapture any losses that occurred over the previous week. Maybe that is a part of it, I do not know. It seems that the gap is caused by some market activity that occurs over the weekend that, until Price illuminated me, I was completely unaware of.

x-x ninge