you said this:
Someone on this thread posted a very useful link to an instructive video which illustrates the difference between a "professional" gap and a "novice" gap.
i've seen this link but couldnt make the video work,anybody knows whats it about?? thanks
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since the subject matter of the video concerns gaps and interpreting them, and the thread already has waaaaay too much gap talk going it would be best to find a way to discuss and learn that information outside of this thread - IMHO. As I said, there is information about how to interpret some of the gaps that normally occur in all markets. Good luck.
No, the rules have not changed. We do watch 3 Taps from the H4 (or higher) chart. I say or higher because some people like to trade higher TFs. My current EURUSD trade is a 3 Tap trade from the weekly chart and also a BO trade, for example.
I am not aware of anyone trading 3 Taps from the H1 chart, but it should work too, if someone wanted that TF.
H1 4C BOs have always been viewed from the H1 chart.
since the subject matter of the video concerns gaps and interpreting them, and the thread already has waaaaay too much gap talk going it would be best to find a way to discuss and learn that information outside of this thread - IMHO. As I said, there is information about how to interpret some of the gaps that normally occur in all markets. Good luck.
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I'm with you js. Everyone needs to decide to trade them or not, but no need to have much discussion as to the merits of them. I have let my feelings be known...I think they are fun and most often profitable, but everyone needs to decide for themselves.They are often stressful, however, and that needs to be taken into consideration also.
I'm in with TP 1.0074 and SL 1.0027 do you find them logical ?
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You chose what look like good R/S levels for TP and SL. That's what I do too. Now just sit back and watch. Looks to me like you have done everything right....
Pip26 and others made good pips going long on this this pair. Looks like we may be able to make pips gong short now.
BO happening now.
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Hi LG, If H1 4C BO occurrs two Or three or More.. in One Day is that Oke? Like This GBPJPY Chart (two Times). if Three or More maybe is Side way direction..
I didn't say gap trading doesn't work, I said I can't see the point. There's no logical reason to trade gaps is what I'm saying.
When someone can present me with a few months (at least) of trades (demo or live) covering an ample number of pairs, or at least 12 months covering a single pair, I'll become a believer.
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Among all the trading strategies, gaps may be the easiest to test. I just looked at a year on the GBPUSD. I used 8 pips as the cutoff, and found 16 weeks where there would be no trade because the gap was smaller than that. That leaves 36 trades over the 52 weeks.
With a 100 pip stop, there were 31 winners and 5 losers. The winners went for 884 pips, so the net was 384 pip before spread and commission. Assuming around 3.3 spread, the net goes down to about 265 pips. There were two winning trades that you would have to hold for over 30 4 hour bars. After that, the next longest trade was 17 bars, Most winning trades closed the gap much faster.
With a 50 pip stop, there were 28 winners and 9 losers. The winners grossed
695 pips, netted 245 pips before spread, and about 126 pips after spread.
If you set the stop equal to the gap, so your R:R = 1, you would have gotten 24 winners and 12 losers.
If you set the stop equal to 1/2 the gap, so your R:R =2, you would have gotten 19 winners and 17 losers. Both of the last scenarios do not include spread. I did a quick look at the numbers and it looks like the spread would eat up about 20% on the 1:1 scenario, and maybe a bit more on the 2:1.
What does all this mean. Suppose you risked 2% of your account per trade.
With 100 stop loss, you would make somewhere around 5.5% for the year. With 50 stop loss, you would make somewhere around 5%. With stop equal to gap, you would make closer to 20%. And with stop equal to 1/2 gap, the earnings would be higher, maybe as high as 33%.
If people wanted to check other currencies or longer time frames, its really very easy to do. I don't understand why so many people are so willing to jump into live trading on something that they never bothered to test for themselves.
Hi LG, If H1 4C BO occurrs two Or three or More.. in One Day is that Oke? Like This GBPJPY Chart (two Times). if Three or More maybe is Side way direction..
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It certainly is!!! That is exactly how many traders trade..one or two pairs that they trade up and down all day, week long.
For those of you who are watching this pair for a BO trade, move to a M15 chart and you will see very clearly that support area we were discussing earlier. Unless or until that area is broken, there is no entry on this pair short.
Trade What You See - Almost Naked Trading
