TASAYC System

A trending market is not absent fluctuations in price. In fact, it may even have small reversals. It will, however, correct its course and continue in its original upward or downward direction. That is, of course, until that trend is over.
See #1547, please.

Very cool! That also explains why my divergence based trendlines work so well. They are actually marking the end of the current cycle effectiveness, and when the larger cycle is taking over control of price!!!

Thanks for the link.

Carl

When a market is 'Ranging,' it is simply moving up and down within support and resistance levels without moving above the highs or below the lows.
See #1547, please.

How much the price can move within a 'range' depends on differing factors If, however, the range of price fluctuation is very minor, most traders would consider that to be 'chop' where the market is just moving sideways with very little activity upwards or downwards. Some professional traders will take advantage of a ranging market, buying or selling again and again during these support and resistance patterns.
See #1547, please.

Range or Trend?...
When you read unrealistic statements like #1542, #1543, #1545, #1546 above, it didn't really help you in your active trading time when you've coming to a decision!,... and this here #1546 is truly a tautology. Nobody knows beforehand how long will run a trend, when and how strong could be a retracement, or how much longer would withstand a Range. You couldn't copy a regression analysis unfiltered in the future. It's fuzzy logic! Trend and Range Movements you could only pin down in hindsight. Be careful, friends!
Kindest regards
FXcube

It's better to break away from this obsolete, outdated concept about Range Bound or Trending Market Rot! You can't never detected up front. I've learned more to think in terms of probabilities when I'm making market decisions. When a market seems more in a favor to consolidate then you could have seen a range retrospectively.
FXcube

See #1545


Hi Carl!
This is Stochastic Oscillator, not CCI. Are your cycles based at Stochastics? If so then it's not the topic of this thread here!
FXcube.

Hi Forexcube! Very impressive trade! Do u still trading on a demo account? If yes, why u spending your time and dont "make money"?

Can I get you anything else?
I can't get my heat around yet, that some of the new FF members could be ask so silly questions...
Read this thread before demonstrating your stupidity!
This thread should not become a meeting point for idiots!
You're banned!
FXcube

EURUSD, M5, 2012 February 06
EURUSD, M15, 2012 February 06
EURUSD, H1, 2012 February 06

Trades over the Week-End.
2012 February 03 - 2012 February 06

Profiting from Gap Trading
Gap trading is not a new strategy. It's been used in all investment markets for a very long time. To learn this Forex trading technique is relatively easy. Gap trading in an attempt to take advantage of the difference, or "gap," in price between the close of the previous day with the open of the following day. If the open is above the previous day's close, this is commonly referred to as "gapping up." If the open is below the previous day's close, this is called "gapping down." If the open is at the exact same price, then there was no gap.

I trade the risk over the week-end sometimes, when I could see a probability of making a profit.
Here: M15 Short within the H1 Range.

Profit: +12%

See also #1555, please.

Forex Gap Trading: Simple and Profitable

By Andrew Daig

You can search the Internet, or go to your local library, and find a plethora of information on complicated, hard to understand, currency trading strategies. Though Forex education is important, there are many simple, time-tested Forex trading strategies that can be used immediately and give you profitable results. Profits are, as we all know, the bottom line.

Profiting from Gap Trading

Gap trading is not a new strategy. It's been used in all investment markets for a very long time. To learn this Forex trading technique is relatively easy. Gap trading in an attempt to take advantage of the difference, or "gap," in price between the close of the previous day with the open of the following day. If the open is above the previous day's close, this is commonly referred to as "gapping up." If the open is below the previous day's close, this is called "gapping down." If the open is at the exact same price, then there was no gap.

Forex Trading and Gaps

Generally, in Forex trading this strategy tends to be ignored; most people feel that as currencies are trading 24 hours a day worldwide, there is no true opening or closing prices. That being said, some people maintain that gap trading in Forex trading can be successful 85% of the time. If this is the case, there is money to be made. The question becomes: "How can you trade gaps on the Forex market?"

If you ignore the 24-hour time frame associated with Forex trading, and set up an opening and closing time to create an artificial market, you can provide yourself with an open high low close data range. Based on that data range, you would be able to trade gaps. An alternative Forex trading strategy is basically to ignore trading on Saturday and Sunday, when volume thin as most of the world is not working. Under this scenario, you establish a closing time on Friday and an opening time on Monday. Based on the gap, you take the appropriate position.

Unlike what you might think, the Forex trading strategy for gaps is contrarian by nature. That is to say, you do the opposite of what's intuitive. If the price gaps up, you sell. If the price gaps down, you buy.

This currency trading strategy works an outstanding amount of the time, and thus, it's a simple process that can produce great profits.

http://articles.submityourarticle.co...gies-44871.php

When trading Gaps don't complicate things with a couple of questions like:

HOW DO YOU TRADE THE GAPS ? WHERE DO YOU SET YOUR STOP? WHERE DO YOU SET YOUR TP AND TAKE PROFIT? HOW DO YOU KNOW WHICH GAPS TO TRADE AND WHICH GAPS NOT TO TRADE? HOW AND WHEN DO YOU TAKE PROFIT ON A GAP THAT DOES NOT FULLY CLOSE BEFORE PRICE MOVES AGAINST YOU?WHAT IS THE BEST TIME FRAME TO TRADE THE GAPS?

Monitoring the charts and break down the chart patterns of a gap at different time frames.
FXcube

What Causes Gaps
PIPSMAXIMUS THEORY ON WHAT CAUSES THE GAPS IN FOREX

With much research, thought and careful deliberation I have come up with a theory, as to the cause of Gaps, that occur after the Forex Market closes on Friday 4 pm EST. and when Forex Market opens at 5 pm EST. Sunday.

After many a sleepless night It finally came to me one night in the wee hours of the morning like a light bulb going off in my head. And I thank Bob Iaccino of www.traderoutlook.com My teacher, mentor, friend and confidant. for the final piece of the puzzle.
Hours of research and calls to numerous brokers asking questions to try and find reasons / cause for the gaps in Forex currency pairs, all I found were opinions, lots of opinions. Most everyone and internet sources said it is news that causes the gaps. However, there were many situations I have observed where significant gaps occurred and there was no news to cause these gaps. Some even said gaps did not exist there was no such thing as gaps ha ha. Then please someone explain to me- PipsMaximus, why a currency pair like EURUSD closes on Friday at 1.44551 and opens on Sunday/Monday at 1. 44963 - - - 41 pip gap.

Most opinions were that the gaps were caused by weekend news/fundamentals. Some opinions were that back door institutional, political dealing and putting green deals Banks trading over the weekend can cause gaps (Which of course no one of influence in the financial / political community will admit too) . While I do believe the back door, institutional, political and putting green deals and Banks trading over the weekend do occur and may help to create gaps, it is not significant enough to create large gaps in Forex currency pairs. The news/fundamentals over the weekend affect spreads at market open more than anything else.

We have all seen increased spreads by our brokers at market open, some brokers who sell themselves as low spread brokers refuse to, or excuse me, forget to open on time, due to the increased spreads caused by news/fundamentals over the weekend, because it is bad PR for their low spread sales pitch.
Gaps, being caused by news and banks trading over the weekend seem to be the most widely held belief for the cause of gaps. I believe this is an incorrect explanation as to the cause of gaps. The news over the weekend and bank trading over the weekend is not the cause of gaps.

The cause of gaps is trader’s reaction to the news resulting in sudden volatile price action due to traders reacting to the news. Gaps are caused by traders exiting trades en masse read further for examples and a detailed explanation.
I know this sounds somewhat convoluted, some will say PipsMaximus you just said that news causes gaps. No, I said the news causes traders to react and the results of trader reaction cause gaps.

I have never seen “THE NEWS” open or close a trade, nor have I ever heard of any trader by the name of “THE NEWS”. However, there are millions of traders by the name of Bill, Jack, Jill etc who open or close trades based on the news. So it is not the “News” that causes gaps, but rather rapid mass traders, reacting and exiting their long or short trades due to their reaction to the news. Millions of traders are regularly and unpredictably reacting to the news.

I have observed times when there is “News” yet there are still small and few gaps. If news causes gaps then why is this so?
Bob Iaccino of www.traderoutlook.com taught me a great analogy. The financial market is a car, news is the engine that powers the car, and traders are the driver of the car. The trader/driver decides to press the accelerator pedal or brake pedal and steer the car. The news/ engine cannot move the car unless the trader /driver takes action by accelerating steering and sometimes slamming on the brakes. Which many traders do based on news. Multiply this by millions of drivers and you have traffic, maybe gridlock, backups, 4 way stops, intersections with red and green lights, open desert highways full speed ahead, winding mountain or coastal roads. You name it.
But what about when there is no major news yet there are significant gaps in numerous currency pairs when the Forex market opens? Also why when there are no black swan events, major news, political, economic or natural crises that occur and there are still significant gaps When the Market opens.

I literally agonized over that question for almost a year. I also observed that after NFP, Non Farm Payroll report that is released after the first Friday of every month in the #1 economy of the world, there were smaller, and fewer gaps, Also, June through August there were fewer and smaller gaps. Why why why?

So I thought a lot about NFP and what is happening there, many traders are exiting trades in the few days before NFP is released in fear that NFP may wipe out their profitable trade and reverse them to a loss so they take their money off the table, I have done this myself more than once.

Then I flashed on the extremely large gaps when the Forex market opened on May 9/10 2010 after the P&G Proctor & Gamble Black Swan Event (fat finger trade) On May 6th 2010 a trader who was supposed to put on a Multi Million $ trade and instead put on a Multi Billion $ trade by tapping the B- key instead of the M- key, (fat finger). Causing a major upheaval in the Financial Markets. This also resulted in incredibly large gaps in numerous currency pairs.

See last page of this report for Wikipedia definition of Black Swan event.
When the Market opened on Sunday/Monday May 9/10 - 2010 more than 20 Forex currency pairs had larger than usual gaps. Below I have listed 8 pairs with exceptionally large gaps when the market opened resulting from the P&G fat finger trade,
I, PipsMaximus banked a fair amount of pips trading these gaps.

EURUSD 186 Pip Gap - EURJPY 307 Pip Gap - AUDJPY 230 Pip Gap - GBPJPY 211 Pip Gap
AUDUSD 148 Pip Gap - CHFJPY 154 Pip Gap - USDJPY 104 Pip Gap - USDCAD 94 Pip Gap

Bank trading over the weekend did not cause these gaps. This was not a news related event; there was no major news prior to this Black Swan event. It was a sudden unpredictable occurrence causing enormous price moves, causing traders to react. Millions of traders exited their trades to protect their accounts, not knowing what the heck was happening, (Myself, PipsMaximus included.)
But why did this Black Swan Event cause such large gaps when the market opened ? No prior new release. Bank trading over the weekend? I don’t think so. And whenever there is a major crisis economically, like the Greece financial crises, or political crises or natural crises like the recent earthquake in Japan. Why are there large gaps in numerous currency pairs?
Also why, when there are no black swan events, major news, political, economic or natural crises that occur and yet there are still significant gaps When the Market opens?

So what is it that really happens, that creates the gaps from market close to market open ?
What is the link, what is the correlation to Black Swan events, political economic and natural crises and sudden news release or a regularly scheduled economic report like NFP ?? Or more confusing when none of the above have occurred. YET THERE ARE GAPS when the market opens.

Bob Iaccino of www.traderoutlook.com taught me this - “Sudden Bull Moves” - a sudden reversal in the current Bear price action, are caused by traders that have been short/sold and are exiting trades taking profits, or for whatever reason. Result is a sudden bull move.
“Sudden Bear Moves” - a sudden reversal in the current Bull price action, are caused by traders there are exiting their long/buy trades and taking profit. or for whatever reason.” The result is a sudden bear move.
Gaps in Forex currency pairs are a result of pure trader action, many many, traders exiting long and short trades for whatever reason totally unexplainable. Unless you were able to interview every trader in the world, that exited a long or short position shortly before market close. Then come up with some sort of consensus, as to why the majority of traders who were long and the majority of traders who were short exited their trade. An impossible task I believe.

When a Black Swan event occurs like the P&G fiasco, millions of traders closed their positions, (Including PipsMaximus) because of the volatile price action not knowing what was happening or why and wanted to preserve their profit or minimize their loss.
During political economic and natural crises traders are exiting trades en masse, long and short trades faster than the market makers/ Institutions /banks and brokers computers / servers can keep up with.
This happens so fast that the Brokers/ Banks servers cannot keep up. Gaps are created in Forex currency pairs, from market close to Market open, when over the weekend the computers and servers update all the data. Some would argue that computers can process information in nano seconds, but computers/servers do get overloaded and result in slowdowns.
Have you ever tried to exit or enter a trade during volatile fast moves only to receive a popup message - server busy, broker busy, 501 error, requote, off quote, unable to process order.

So what causes gaps in Forex currency pairs when there are no Black Swan events, major news, or economic, political or natural crises?
Every week minutes maybe seconds before the market closes thousands maybe, millions of traders close their positions weather long or short within a minute of Market close on Friday, taking profit, I have done this many times. Maybe they want to be flat for the weekend maybe they know of a news release that is due to come out over the weekend or on Monday.
For whatever reason, many traders are exiting their trades right before the market closes on Friday. This fast and regular occurrence happens every week and if there are enough traders exiting say EURUSD faster than the servers can keep up, the end result is a Gap in Forex currency pair when the market reopens.

Ok, why then are there fewer and smaller gaps after NFP ? - Because many traders are closing out their positions the few days prior to NFP. They fear the NFP report will stop them out, or wipe out the profit they have gained. So by Friday close the market has settled. The servers have time to process the data and when the market reopens there are not many large fluctuations.
And why fewer, smaller gaps, if any gaps at all, mid June - August ?? Because there are much fewer, especially institutional traders involved in the market to create the liquidity and volatility that exists September through May.
If all of the above is not enough circumstantial evidence to prove my case than consider this
On April 10th 2011 - I had 4 accounts running, all with my very cool and trusted PipsMaximus Gap indicator on the charts.

With the currency pair - GBPCHF the following occurred.
Friday close April -7 – 2011 Sunday /Monday open April 9/10 - 2011

FXDD - Close 1.4877 - Open 1.4845 Gap 32 pips - signal buy
FXJE - Close 1.4877 - Open 1.4845 Gap 32 pips - signal buy
FXCM - Close 1.4877 - Open 1.4863 Gap 14 pips - signal buy
MBT - close 1.4839 - Open 1.4869 Gap 30 pips - signal sell

I, PipsMaximus, traded FXDD and FXCM live and traded FXJE and MBT on demo - All four GBPCHF trades hit their target including MBT how could that happen if “News” or banks trading over the weekend was the reason for causing gaps.
In the case of MBT, traders who trade with MBT, exited trades on Friday close, resulting in a price action opposite of the other three brokers

Bull Gaps are caused by traders that have been short/sold and are exiting trades en masse, in a very short period of time, for whatever reason. Causing a “Sudden Bull Move”
Bear gaps are caused by traders there are exiting their long/buy trades en masse, in a very short period of time, for whatever reason. Causing a “Sudden Bear Move”
This is happening faster than computers and servers can keep up, so when the data is finally updated there are gaps in numerous Forex currency pairs.

So with GBPCHF shortly before Market close on Friday - -- FXDD, FXJE and FXCM, had traders exiting long trades en masse in a very short period of time creating a bear gap. While MBT had traders exiting short trades En Masse in a very short period of time creating a bull gap.
I studied FXDD chart and MBT chart several times trying to see the difference. Only, when I printed the two charts and turned MBT chart upside down and put it next to FXDD chart, then I saw it. Literally blew me away !!!
I believe that the larger your broker is and the larger number of trading accounts your broker services the more likely you will see gaps when the Forex market opens.

Bottom line is: Traders exiting trades en masse for whatever reason and the resulting price action cause gaps not the news.
AS LONG AS THERE ARE TRADERS TRADING AND EXITING THEIR LONG OR SHORT TRADES EN MASSE IN A VERY SHORT PERIOD OF TIME JUST BEFORE THE MARKET CLOSES THERE WILL BE GAPS. AS LONG AS THERE ARE GAPS
I, PIPSMAXIMUS WILL BE TRADING THEM!!!

My apologies for the length of this report and for being repetitious at times. I could have just said “It is traders exiting trades en masse in a very short period of time that causes gaps, just take my word for it”. However, I felt the need to fully explain and provide circumstantial evidence backing up my theory. I could add another 10 pages of examples and evidence but I am sure by now you get the point. There will still be people that say, no PipsMaximus you are wrong, it is all about the news. To that I say, you can lead a horse to water but you can’t force it to drink.

There it is, my theory on Gaps in Forex, if anyone has a better explanation I am all ears.
For more information on the PipsMaximus Forex Gap Trading Strategy visit www.forexgaptradingstrategy.com
Black swan theory

From Wikipedia, the free encyclopedia
A black swan, a member of the species Cygnus atratus, which remained undocumented until the eighteenth century
The Black Swan Theory or Theory of Black Swan Events is a metaphor that encapsulates the concept that The event is a surprise (to the observer) and has a major impact. After the fact, the event is rationalized by hindsight.The theory was developed by Nassim Nicholas Taleb to explain:The disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities) The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs Unlike the earlier philosophical "black swan problem", the "Black Swan Theory" (capitalized) refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.[1]

http://forexgaptradingstrategy.com/node/26

Forex Gap Strategy

Forex Gap Strategy — is an interesting trading system that utilizes one of the most disturbing phenomena of the Forex market — a weekly gap between the last Friday's close price and the current Monday's open price. The gap itself takes its origin in the fact that the interbank currency market continues to react on the fundamental news during the weekend, opening on Monday at the level with the most liquidity. The offered strategy is based on the assumption that the gap is a result of speculations and the excess volatility, thus a position in the opposite direction should probably become profitable after a few days.
Features

 

1. Regular trading with clear rules.
2. No stop-loss hunting or premature hits.
3. Statistically proven profit.
4. You have to open position at the week's beginning and close it right before the end.

How to Trade?

 

1. Select a currency pair with a relatively high level of volatility. I recommend GBP/JPY as it showed the best results during my tests. But other JPY-based pairs should work too. By the way, it's a good strategy to use on all major currency pairs at the same time.
2. When a new week starts look if there is a gap. A gap should be at least 5 times the average spread for the pair. Otherwise it can't be considered a real signal.
3. If Monday's (or late Sunday's if you trade from North or South America) open is below the Friday's (or early Saturday if you trade from Oceania or Eastern Asia) close the gap is negative and you should open a Long position.
4. If Monday's open is above the Friday's close the gap is positive and you should open a Short position.
5. Don't set a stop-loss or a take-profit level (it's a rare occasion but stop-loss isn't recommended in this strategy).
6. Right before the end of the weekly trading session (e.g., 5 minutes before the end) you need to close the position.

Example

http://www.earnforex.com/forex-strat...tegy-chart.png

You can see GBP/JPY pair's last 7 weeks (as of May 24, 2010) and all of them have gaps. 6 out of 7 gaps give correct signals that result in a lot of profit. The last gap gives a wrong signal and yields a medium loss. The average spread for GBP/JPY was 3 pips during the example period and all gaps were much wider than 15 pips, making them all qualifying signals. The net total profit was 1,612 pips in 7 weeks — not that bad.

Warning!
Use this strategy at your own risk. EarnForex.com can't be responsible for any losses associated with using any strategy presented on the site. It's not recommended to use this strategy on the real account without testing it on demo first.

http://www.earnforex.com/forex-strat...x-gap-strategy

Forex gap strategy

This trading strategy uses one of the most recurring phenomenons of the forex market — a weekly gap between the last Friday's close price and the current Monday's open price. The gap itself takes its origin in the fact that the interbank currency market continues to react on the fundamental news during the weekend, opening on Monday at the level with the most liquidity. The offered strategy is based on the assumption that the gap is a result of speculations and the excess volatility, thus a position in the opposite direction should probably become profitable after a few days.


Steps:

1.Select a currency pair with a relatively high level of volatility. I recommend GBP/JPY as it showed the best results during my tests. But other JPY-based pairs should work too. By the way, it's a good strategy to use on all major currency pairs at the same time.

2.When a new week starts look if there is a gap. A gap should be at least 5 times the average spread for the pair. Otherwise it can't be considered a real signal.

3.If Monday's (or late Sunday's if you trade from North or South America) open is below the Friday's (or early Saturday if you trade from Oceania or Eastern Asia) close the gap is negative and you should open a Long position.

4.If Monday's open is above the Friday's close the gap is positive and you should open a Short position.

5.Don't set a stop-loss or a take-profit level (it's a rare occasion but stop-loss isn't recommended in this strategy).

6.Right before the end of the weekly trading session (e.g., 5 minutes before the end) you need to close the position.



http://www.forexbite.com/forex-strat...x-gap-strategy

Forex Trading: Trading the weekend gap
by ForexTrading-Pips on January 23, 2012

Forex Trading: Euro currency gapped lower at the open of this weeks trade following the failure of European banking and government officials to reach an agreement over the weekend.
Weekend gaps present decent trade setups for short term traders as the gap is typically filled within 24-48 hours. Take a look at the 5 minute chart of Euro currency below. Note the 50 pip gap down on this weeks ‘open’ which is then filled within the following 12 hours. Nimble traders are fading these gap moves with reasonably high winning percentages.

http://www.forextrading-pips.com/wp-...ap-300x155.png
Forex Trading Euro weekend gap

It is important to use wide stop loss orders when trading gaps as there can be significant negative excursion before the gap closes, and indeed not all gaps are filled. It is also important to pay attention to spreads which can be wide during the Sunday evening opening. Only the most liquid currencies should be considered when trading weekend gaps: EUR, GBP and JPY.

http://www.forextrading-pips.com/201...e-weekend-gap/

Breakaway Gap Forex Pattern

Breakaway gap formations occur at the beginning of a new trend, usually at the end of long consolidation periods. They may also appear after the completion of some chart formations that tend to act as short-term consolidations. Breakaway gaps signify a brisk change in trading sentiment, and they occur on increasingly heavy trading.
Traders are understandably frustrated by consolidations, which are rarely profitable. Therefore, a breakout from the slow lane is embraced with optimism by the profit-hungry traders.
The price takes a secondary place to participation. As always, naysayers follow the initial breakout. Sooner rather than later, the pessimists have no choice but to join the new move, thus creating more volume.
Breakaway gaps are not likely to be filled during the breakout and for the duration of the subsequent move. In time, they may be filled duringa new move on the opposite side.
In Figure below, the currency futures trades sideways in a 100-pip range between 0.6550 and 0.6690 for a period of time. A price gap between 0.6690 and 0.6730 signals the breakaway from the range.
Finally, the breakaway gap provides only the price direction. There is no a price objective. However, an increasing demand for a currency ensures a solid move on good volume in the foreseeable future.

http://www.forexsure.net/images/stor...%20Pattern.jpg

Read also
Common Gap Forex Pattern
Breakaway Gap Forex Pattern
Wedge Forex Pattern
Descending Triangle Forex Pattern
Ascending Triangle Forex Pattern
Flag Forex Pattern
Symmetric Triangle Forex Pattern
Pennant Forex Pattern
Head-and-Shoulders Forex Pattern
Inverse Head-and-Shoulders Forex Pattern
Double Bottom Forex Pattern
Double Top Forex Pattern
Triple bottom Forex Pattern
Diamond Forex Pattern


http://www.forexsure.net/products/31...x-pattern.html

.. Great stuff... look forward to further udates.... have looked every were to see if i could find somthing similar i could play with .. looks to be a one off..had i read your post in total i wouldnt have wasted my tyme..

No, Forexcube, absolutely not.

My cycles are extracted using an algorithm used by telephone companies to digitize/deconstruct voice data, called the Goertzel algorithm.

I use CCI divergences in my trendlines and confirmation in cycle turns.

I was referring in general to the way divergences are viewed by the author of the article.
He explained something about stochastic divergences that also apply to CCI divergences.

Carl

EURUSD, Daily, 2012 February 06
Preview

Longer Term down...with some M1/M5 ups intermediate.