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I believe you that the prices change over the weekend, what I don't understand is how you will make money from that gap. Let me give an example.
Say the price is 1.0000 and it's Friday.. the market will close in 1 minute.
I place a Buy Stop order at 1.0010 and a Sell Stop order at 0.9990 (10 pips above and below the market price, which is 1.0000).
The market closes at 1.0000 and I still have orders to buy or sell, but I have no open position, because the price did not touch my orders.
On Monday, the market opens at 1.0100 (100 pips higher than the Friday close).
My Buy Stop order is immediately filled, but at the opening price: 1.0100 . That is the price I enter the market at... if I close the order in three minutes, I might make a couple of pips, or I might lose a couple, but I will not make 100 pips from the gap. Do you understand this?
The only way to make money from this gap is to open a position on Friday, before the market closes. The problem is:
- How do I know whether to buy or sell?
- How do I know if the gap will be up or down?
If you use a pending order on Friday, you will not make money from the gap. If you open a live order on Friday, you MIGHT make money - IF you can correctly choose which way the gap will go... but you haven't said how you can figure this out...Ok you have an Buystop order 0.9990 in monday the market open at 1.0000 if this pair is EURUSD with 2 pips spreads you win 8 pips. Why? Because the weekend is like an other change day in a weekday.
In the last example the market open at 1.0100 in monday and the friday buystop was 0.9990 you win 108 pips (Win pips minus spread Eurusd with 2 pips spread)
In the last example the market open at 1.0100 in monday and the friday buystop was 0.9990 you win 108 pips (Win pips minus spread Eurusd with 2 pips spread)
Where a GAP exists,
Broker will fill your order with the new week open price if you're lucky. And most of the time depends on the broker which is that price.
It happened several times during this years.
Where a GAP exists,
Broker will fill your order with the new week open price if you're lucky. And most of the time depends on the broker which is that price.
It happened several times during this years.Yes, this is exactly what I was getting at. Charritopemex (sp?) seems to think that the broker will honor last week's price because there was a stop order, but they will in fact only give (at best) the current price.
Therefore: the only was to profit from a weekend gap is to place the order on Friday, before the close. That way, if the gap goes in your favor, you would make the profit... but if it goes against you, you would lose a lot of money. Unless you have a reliable crystal ball, you're taking a huge gamble.
Yes, this is exactly what I was getting at. Charritopemex (sp?) seems to think that the broker will honor last week's price because there was a stop order, but they will in fact only give (at best) the current price. Therefore: the only was to profit from a weekend gap is to place the order on Friday, before the close. That way, if the gap goes in your favor, you would make the profit... but if it goes against you, you would lose a lot of money. Unless you have a reliable crystal ball, you're taking a huge gamble.
Maybe is true. But many times I win with this strategy. I said before the biggest win was 165 pips.