Exhaustion gap trading strategy
Supply, Demand and Resistance. A true gap is where the market opens above or below the entire range of the prior session, but in reality you can work with ones that open away from strategy prior close but still within the range. But how does this work in 24hr forex? The only time it closes is on Friday and it reopens on Sunday. But you can also create artificial gaps between main sessions. For example, in EURUSD you might choose to chart the London and New York sessions only. This means that each day, you have a period from 3am — 5pm EST that you could use as a primary session. Any movement in price that occurs from the close of one session to the open of the following will appear as a gap. Although all gaps are technically the same, the interpretation of strategy can be very different depending on their location within the broader activity of the market in question. There are three classic types of gaps: A breakaway gap is what it sounds like. The market is range bound and gaps away from this range signaling the potential of the start of a trend. Runaway gaps are basically a continuation of a trend where increased interest in the direction of the trend enters the market and the market gaps in price on open. This can signal that the trend is decent and the market is likely to continue in the direction of the trend. Trading there are exhaustion gaps. These occur after a exhaustion trend and are a potential indication that a reversal is imminent. But a gap can also occur within strategy range bound market too and this type of gap can have a good chance of being closed. The point is that some gaps are better to fade trade against and some are better to go with. From a statistical basis, gap closes are pretty common. But there is definitely a sweet spot. And this is on the premise that the closing price of the trading session is traded again in the new session and so the gap is completely closed. So you can see that EURUSD at least often likes to close its gaps. Think about it for a minute. If the EURUSD gapped up 30 something pips and you just sold it immediately, it could gap another pips higher and stop you out before turning down to close the gap. So you need to select the right gaps to trade and you need to identify when the market activity gap telling you it wants to close the gap. This could be done in any way you chose, but strategies like the Trend Jumper which are built around trade activity are a particularly good choice. Find a suitable gap, wait for the market to test and fail in the same direction gap the gap, get an entry signal from your strategy and take the trade. Gap trading can be great way to trade any market and forex is no exhaustion. Free Trading Software, Based on Trends, Requires No Specific Broker or Platform! About Us Testimonials Staff Contact Us. Counter Punch Trader Dynamic Swing Trader Options Fast Track Options Academy NetPicks Trend Jumper. Forex Trading Futures Trading — The Complete Guide Why You Should Choose Options Trading Swing Trading Tutorial Day Trading ETF Investing. Informer Newsletter Trading Tips Blog Trading Videos Exhaustion Training Webinars. Counter Punch Trader NetPicks Options Fast Track NetPicks ETF Investor Dynamic Swing Trader Netpicks Live Signal Service Forex 1, 2, 3 Brick Charts Advanced. Automated Forex Trading NEXT ARTICLE: The following two tabs change content below. Latest posts by NetPicks see all. Dynamic Profit Generator Free Trading Software, Based on Trends, Requires No Specific Broker or Platform! Forex Trading Futures Trading Options Trading Day Trading Swing Trading About Us Our Staff Contact Us Our Products Testimonials Member Area Take The Quiz Trading Tips Premier Trader University Forex Trading Systems Futures Trading Systems Options Trading Systems Swing Trading Systems Day Trading Strategies. NetPicks Trading Lohmans Crossing Road Suite Lakeway TX For Inquiry GET FREE Trading tips, trick, techniques and lessons Join our newsletter. Here is the website link: Send Me The PDF Version! We hate spam and promise to keep your email address safe.
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