Making money from Gaps
Trading gaps can result in profitable trade. Gaps occurs as a result of underlining fundamental or technical factors. Gaps can be risky due to low liquidity and volatility but if properly traded they offer quick opportunity for profits.
Gap trading work at times. But not always
There is the possibility of making money from trading gaps in the forex. Well, gaps are the consequence of technical and fundamental factors playing in the background. Although it is worth mentioning that gaps could be risky as a result of volatility but them for the trader who knows how to exploit them, it is nice. One simple way is that once you notice there is a gap in the upwards direction, you would immediately go short waiting for the prices to fill the gaps and then consequently pull out.
Gap trading to me is low probability trading. It can take even years to fill a gap so how long u going to wait for it or weither ur pocket is that big to manage the floating loss. Market is always right and we need to follow market rather than taking jeopardy decision.
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Although there seems to be no gaps in the forex as when brought in comparison with the stock where gaps are very common due to the fact that officially the New York Stock Exchange (NYSE) opens by 9.30 am daily and closes by 4.00pm. But really there are gaps in the forex, they are not really very visible during the week days but during the weekend till Sunday (unless a very powerful news release prompts them), they are not hard to come by in the forex. But one thing that seems not to be very popular is that there is good money to be make when exploiting the gaps in the forex. Once you observe that there is a gap in the upwards direction, they go short and patiently await the prices to occupy the gap and then they pull out. Conversely when down, they now go long waiting the prices to as well occupy the gap and then they pull out. This strategy though aged is still very profitable.