Forex Gap Plan is defined as an exciting trading system that uses a disturbing phenomenon of Forex trading market which is a gap between the close price of last Friday and the existing Monday’s open cost. This gap itself is originated from fact that interbank money market reacts on the basic news this weekend, opening on Monday’s at a stage with most of the liquidity. The provided plan depends on an assumption that this gap is caused by speculations and large amount of volatility, therefore a position in an opposite direction should become gainful after few days. Some of the features are mentioned below:
• Regular dealing with certain clear rules and regulations
• No stop-loss hunt or early hits
• Statistically proven gain
One need to open the position at the beginning of a week and at is closing prior to its end.
How to do trading?
1. Choose a money pair with a high volatility level.
2. When an initial week begins find out that whether there is any gap or not. An opening should be nearly five times of an average speed for a pair. Or else it cannot be regarded as an actual signal.
3. If the Monday’s open is less than the Friday’s open, close the negative gap and you should start opening a long position.
4. If in case, Monday’s open is over the close of Friday, a gap is regarded positive and one should begin a short point.
5. Do not set stop-loss or take-gain level.
6. Before the weekly trading time period comes to an end you should close the point.
See one example from youtube :
If you want to use this scheme, you have to do in your own risk. Test the strategy before using it.
This is very dangerous forex strategy because evan you put 50 pips stop loss you can lose 200 pips during weekend gap.!