Sweetaction, thank you so much for this thread. I am learning so much. I wanna ask you how do you trade gaps?
This Sunday (EST) there were some huge gaps. I tried trading them but I failed in most. I had one winner that made up for all my losses luckily. I think I entered too early and that was about 2 hours after market open. A lot of the gaps went the opposite direction and then came back to close it. That's where I got burned on EUR/AUD and GBP/AUD. That upthrust took out my SL. I feel like it did that for this specific purpose and then it shot down and closed it. I capitalized on GBP/CAD after it made the up move. I had a pretty good feeling the AUD and NZD crosses would go down after that upthrust but was afraid to re-enter since I already had 2 losers.
How do you know if a gap will start closing immediately or if it will go the opposite direction and then come back to close the gap? What is the best way to trade gaps?
This Sunday (EST) there were some huge gaps. I tried trading them but I failed in most. I had one winner that made up for all my losses luckily. I think I entered too early and that was about 2 hours after market open. A lot of the gaps went the opposite direction and then came back to close it. That's where I got burned on EUR/AUD and GBP/AUD. That upthrust took out my SL. I feel like it did that for this specific purpose and then it shot down and closed it. I capitalized on GBP/CAD after it made the up move. I had a pretty good feeling the AUD and NZD crosses would go down after that upthrust but was afraid to re-enter since I already had 2 losers.
How do you know if a gap will start closing immediately or if it will go the opposite direction and then come back to close the gap? What is the best way to trade gaps?