Trading The Monday Opening Gap

With Forex “being on” 24 hrs, gaps normally only occur on Mondays after the weekend close. Being in Sydney has the advantage to see the gaps first while the rest of the world is sleeping.

This morning I saw the EUR/USD chart below. And the general rule is
GAPS ALWAYS GET CLOSED!





Of cause there is no 100% guarantee, but the chances are on your side. And this is what Forex trading is all about. All successful traders have loosing trades. But a good win-rate plus good money management (Stop-Loss/Take-Profit) will result in profits.

After seeing the charts above, I placed the following trade.
Limit Order, Sell EUR/USD
P: 1.4710
SL: 1.4740
TP: 1.4650

On top of “the gap rule”, I took a few additional considerations.

• The short term-trend on the 1hr chart was down. So I was going with the trend
• US shares on Fri were down. The USD is currently very much impacted by the “willingness to assume risk”. Meaning the USD falls with rising shares markets and vice versa. So the negative Wall Street result (Dow -0.44%) indicated a stronger USD and therefore a lower EUR/USD

The trade turned out very nicely. Two hours later the chart looked like this (see below). The Sell Limit Order was executed and the Take-Profit target was hit. It does not always work that perfect, but chances are good for making a trade with profit.




And what happened next. Well, of cause afterwards its always easy ;-) It was going down for an other 60 pips.