weekend price gaps trading
dear traders,
have any of you sucsessfully traded the gap? the weekend one?
I notice on the big movers like GBP/JPY, sunday open, as soon as market opens, sudden volatile movement in one direction about 100-150 pips, very tight stops 10 or 20pips works.
I'm thinking on friday close, just about 1 or 2 minutes before it closes, put orders on both sides of the price, one selling, one buying, maybey orders 15 or 20pips away from the current price action, soon as the market opens again on sunday, your in on it already, probably better to use a non-dealing desk broker, automatic execution.
has anyone tried this? and been profitable?
has anyone developed an EA that can trade this?
regards billy
Go to the casino... At least u know your odds.
Are you saying you want to use Buy/Sell Stop orders to try and get filled at a favorable price relative to the market price after the gap has occurred?
If so then the answer is no it won't happen on a real account, your stop order will either be cancelled for having invalid price or it will be filled at the current best available market price.
You can do it on demo accounts though, the brokers have no qualms with allowing stop orders being filled at prices that make them "in the money" at time zero, but no broker is going to actually allow this to happen when real money is on the line.
Ever try trapping a news break with stop or limit orders? (on real account, not demo)
dear phill,
I mean actually trading the gap, so on friday 1658 est, set up a hedged position, have a stop for each position about 15 pips away from the entry points, on sunday when the market re-opens, preferably GBP/JPY (big mover) the price suddenly moves in one direction about 100-150pips in a couple of seconds, this is what I mean. and use a non-dealing desk broker so you are garenteed that a stop order gets executed, if it doesnt on rare occassions, its ok, you are hedged so will be close to evens. trading forex.
In the early days I was convinced that I would get rich trading the news, but the problem is, the risk of stops not being executed, plus I cant be bothered to wait around for 1 month for big movers like non farm payrolls, tried it, didnt work.
just recently I am interested in trading a basket of currencies at the same time, about 20 usually and to not over complicate TA, just use macd only. the thing that has been working for me is to use a macd on the minutely charts, if it looks buying, do the opposite, sell instead, and do this with 20 currencies at the same time, the reason being, the direction on the min charts changes so frequently, when it looks like buying, the buying has already been done, so do the opposite, sell. plus alot of websites say that about %95 of traders (especially the day traders) fail, so why not do the complete opposite? Im not sure if this would work well on daily and above charts, because of it being much longer term.
but so far, using demo, within a few minutes of the positions being open, you will see a profit, the problem is, I dont know when to take the profit?, maybey it should be at the point when I can put a bigger trade on, (I like to use %10 of account balance over the 20 positions, %2 rule I havent got the patients for)
on the short term charts, like min charts, if it looks buy, all day traders/scalpers start to buy, and then the players try taking their stops, so do the opposite and you will be on the players side and might not fall into the catagory of the %95 failing traders?. the way I use the macd on the minutely is to look at the histogram, if the lines are showing buy, but the histogram has decreased (lines coming closer together) I take it as a sell signal, but then do the opposite and buy instead, havent got the patients to wait for signal line cross. you've probably gathered that I am not a very patient person.
I also have a demo for trading daily charts, but because its long term, I go with the macd instead of doing the opposite, again with a basket of 20 currencys, more positions act like a cushen for losses.
I dont use stops and limits on each and every currency pair, I close all positions together in one go based on p/l total of all positions put together, this is why when I can afford to set up mini mt4 account and VPS, I will need to have an EA that can close all positions together based on a specified P/L, that is, opening all positions (20) manually, but having all positions closed together at the same time using automation. when total profit of all trades put together gets to $1000, i want all positions closed ect ect same with loss.
I will need to experiment with time frames to see the best outcome.
have you herd of mich99 on this forum? he has some very good EA's, check out 'com-fracti' on the code base section, he wrote that allitle while ago, it works very well on 5min and 15 min charts, most currency pairs, he is good, about %60 wins over a year of back testing, I will also trade that live when I have enough to get VPS and mini MT4 account.
do you know any decent brokers that offer non-dealing desk execution MT4 mini accounts???, $200 minimum opening amount, the lower the better,
and do you know of a cheap but decent VPS provider???
thanks for reading,
billy currie
I understand now what you mean Billy, thanks for explaining. Detailed/lengthy response in your pm. The short response is that what you propose to do is a strategy that is premised on the idea of "profit by technicality" and you will find that brokers all make sure they have ways to prevent this from happening when it comes to live trading.
The rule of thumb is that if your strategy for making a profit relies on your broker's rules (guaranteed stops, fixed spread, etc) then you most assured your strategy will fail before you get started because the brokers are not dumb enough to let their money be lost on technicality.
If I was your broker and you started putting in pre-weekend hedge positions like this with stops designed as you spell them out in your post above then I'd probably widen your spreads 30pips for a few seconds during market open and take out your stops on both positions for a net loss to you. When you call me to complain I will say it was volatile market conditions and spreads do that in volatile market conditions so what did you expect? Then I'd make sure all my customers get sent yet another email warning them of the perils of having trades open over the weekend so the NFA compliance people have nothing to work on should you decide to file a complaint.
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dear traders,
have any of you sucsessfully traded the gap? the weekend one?
I notice on the big movers like GBP/JPY, sunday open, as soon as market opens, sudden volatile movement in one direction about 100-150 pips, very tight stops 10 or 20pips works.
I'm thinking on friday close, just about 1 or 2 minutes before it closes, put orders on both sides of the price, one selling, one buying, maybey orders 15 or 20pips away from the current price action, soon as the market opens again on sunday, your in on it already, probably better to use a non-dealing desk broker, automatic execution.
has anyone tried this? and been profitable?
has anyone developed an EA that can trade this?
regards billy