Premium4 768x90
View RSS Feed

ArticleMan

A Simple and Profitable Trading Strategy

Rate this Entry
by , 06-25-2020 at 11:32 AM (113 Views)
      
   
What is a Trading Gap?

A “gap” in the market occurs when the opening price is either higher than the previous session’s high price (gapping up), or lower than the previous session’s low price (gapping down).

Name:  eurusd-h4-fx-choice-limited.png
Views: 20
Size:  15.7 KB

Gaps can be important in trading because there is a widely held belief among traders that gaps are usually filled quite quickly, which provides an opportunity for Forex traders to make a likely profit, because the most likely short-term direction of the price can be successfully predicted.

A gap is defined as being filled when the current market price returns to enter the price range of the previous session.

We can draw some exciting conclusions from this data that can help build a profitable gap trading strategy:
  • The smaller the price gap, the more likely it was to be filled quickly.
  • All price gaps in EUR/USD were more likely than not to be filled by Wednesday London time, no matter how big they were.
  • Price gaps in USD/JPY were more likely than not to be filled by Wednesday London time if they were less than 75 pips wide.

-------------
Articles

more...

Submit "A Simple and Profitable Trading Strategy" to Google Submit "A Simple and Profitable Trading Strategy" to del.icio.us Submit "A Simple and Profitable Trading Strategy" to Digg Submit "A Simple and Profitable Trading Strategy" to reddit

Comments