Weekly Gap Strategy | Foreign Exchange EA Download - MT4/MT5 Resources
Hi,
I'm sure many of you already know about gap trading.
I'm publishing a gap finding indicator.
I found this on this website, not sure who.
Anyway, in the input section of indi you can adjust the minimum size of the gap you want to find.
I adjusted mine to 10 points.
Once you put it into the e-chart, you can use it with jap. Candlestick chart or switch to line chart.
A line chart is a great choice if you want to do a historical check on the size of gaps on various currency pairs.
I checked 6 currencies for about 6 months. It was boring so I stopped.
The largest gap I found was caused by GBP/NZD.
However, 95% of the gaps occur when the market opens on Sunday (Eastern New York), when spreads are at their widest.
So the average GBN/NZD gap is about 35 pips. I checked after the market opened last Sunday and the spread was 29 pips.
So obviously you can't trade it.
But the next best pair is EUR/AUD with the average spread being around 22 pips and the best part is that the spreads are closed most of the time. This means the price is back to its original price at Friday's close.
Last Sunday I waited to check the spreads and by 5.30pm ET the spreads on EUR/AUD were down to about 6 pips. So I placed the trade and gained 18 pips.
Now this is how gap trading works, the gap is created as soon as the market opens on Sunday, so you check the size of the gap and compare it to the spread, if you think it's worth trading then do it, if not wait for the spread to come down and then trade.
The arrows on the line chart show gaps, and they almost always occur during the week when the market opens on Sunday.
You can see an example of how to gap trade on a candlestick chart.
The blue line is Sunday's opening price at 5pm ET in New York.
The red line is your Stop Loss (SL), which is measured from Friday's close to Sunday's open.
The green line is your TP.
As you can see, I didn't put the entry line there.
As I mentioned before, when prices first open, the spread is too wide, so you have to wait for the spread to come down to a manageable level.
If you look back at history, most currencies have filled the gap most of the time. It's almost like a guarantee of money in your pocket, but it's not. Because of the spread.
So you have to check out the live stream every Sunday at 5pm.
P.S. For the few months I checked, USD/JPY has been moving in the opposite direction of the gap without filling it. So that's something else to look into.
Don’t forget that the EUR/AUD spread quickly returned to normal, with a wider gap and more consistent gap filling.
Also in the example below, the gap is around 75 pips, so even with a spread of 12 pips, you can take the opportunity to enter immediately. Why? Because many times the price will fill the gap in advance.
I'm sure many of you already know about gap trading.
I'm publishing a gap finding indicator.
I found this on this website, not sure who.
Anyway, in the input section of indi you can adjust the minimum size of the gap you want to find.
I adjusted mine to 10 points.
Once you put it into the e-chart, you can use it with jap. Candlestick chart or switch to line chart.
A line chart is a great choice if you want to do a historical check on the size of gaps on various currency pairs.
I checked 6 currencies for about 6 months. It was boring so I stopped.
The largest gap I found was caused by GBP/NZD.
However, 95% of the gaps occur when the market opens on Sunday (Eastern New York), when spreads are at their widest.
So the average GBN/NZD gap is about 35 pips. I checked after the market opened last Sunday and the spread was 29 pips.
So obviously you can't trade it.
But the next best pair is EUR/AUD with the average spread being around 22 pips and the best part is that the spreads are closed most of the time. This means the price is back to its original price at Friday's close.
Last Sunday I waited to check the spreads and by 5.30pm ET the spreads on EUR/AUD were down to about 6 pips. So I placed the trade and gained 18 pips.
Now this is how gap trading works, the gap is created as soon as the market opens on Sunday, so you check the size of the gap and compare it to the spread, if you think it's worth trading then do it, if not wait for the spread to come down and then trade.
The arrows on the line chart show gaps, and they almost always occur during the week when the market opens on Sunday.
You can see an example of how to gap trade on a candlestick chart.
The blue line is Sunday's opening price at 5pm ET in New York.
The red line is your Stop Loss (SL), which is measured from Friday's close to Sunday's open.
The green line is your TP.
As you can see, I didn't put the entry line there.
As I mentioned before, when prices first open, the spread is too wide, so you have to wait for the spread to come down to a manageable level.
If you look back at history, most currencies have filled the gap most of the time. It's almost like a guarantee of money in your pocket, but it's not. Because of the spread.
So you have to check out the live stream every Sunday at 5pm.
P.S. For the few months I checked, USD/JPY has been moving in the opposite direction of the gap without filling it. So that's something else to look into.
Don’t forget that the EUR/AUD spread quickly returned to normal, with a wider gap and more consistent gap filling.
Also in the example below, the gap is around 75 pips, so even with a spread of 12 pips, you can take the opportunity to enter immediately. Why? Because many times the price will fill the gap in advance.
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