Weekend gap trading is a popular strategy with foreign exchange, or Forex, traders. Many news announcements and world events that affect currency prices can happen between trading sessions. Go online to your Forex trading account or open an account if you do not have one. Pull up the list of currencies and select a heavily traded pair.
Pull up the closing price for 5 p. EST Friday for the currency pair you select. Log this information in your notebook. You will use this closing price to determine if the gap can be traded when the Tokyo market opens on Sunday at 7 p. Decide how large the gap must be before you will enter a trade. You can adjust the percentage higher or lower to fit your risk tolerance. Wait for the Tokyo market to open at 7 p. For example, if the market at opening gaps up at Keep the trade open until the gap is filled or if the currency chart indicates the gap will continue to widen.
She received a bachelor's degree in business administration from the University of South Florida. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm.
Visit performance for information about the performance numbers displayed above. Skip to main content. Step 1 Go online to your Forex trading account or open an account if you do not have one. Step 2 Pull up the closing price for 5 p. Step 3 Decide how large the gap must be before you will enter a trade. Step 4 Wait for the Tokyo market to open at 7 p.
Items you will need Online Forex trading account. Tip Use additional chart indicators to help determine if you should keep the trade open past the initial gap filling or close out the trade. Warning Although the Sydney, Australia, Forex market opens at 6 p. Sunday EST , it is too thinly traded to support the weekend gap trade strategy.
Wait for the Tokyo market to open an hour later for better trading volume. References 2 Earn Forex: Forex Gap Strategy Babypips: About the Author Based in St. Zacks Research is Reported On:More...