A lot of people think that Forex gap trading strategies are difficult to use. In reality, there are lots of these strategies that can be learned quickly and used immediately as well. The results are just the same with methods that one will learn over time. It will still make you a lot of money. Forex Gap Trading strategies are one of those easy to learn methods.
The concept of gap trades is not new. It has been in use in financial markets for quite some time now. What are gap trades, by the way? Why is it considered easy to learn and use? Usually, there is a gap between the following day’s prices and with the previous day’s prices. This kind of trading occurs when a trader takes advantage of that gap. There is what many traders call gapping up and gapping down. Gapping up happens when the opening price is above the price of the previous day. On the other hand, gapping down is when the opening price is below the price of the previous day. But if there is no difference between the prices, then there is no gap.
Most traders tend to ignore Forex gap trading strategies. They think that the currencies are being traded 24 hours of everyday. For them, there are no closing and opening prices. However, there are still some people that who that Forex gap trading strategies have a success rate of 85%. This means that there are indeed some profits to be made. How do you do this kind of strategy in the financial market?
The best way to do this method is to ignore the 24-hour time frame common among many traders. You then set up your own closing and opening time based on the data you acquired. Based on that information you have acquired, you can initiate the trade. Another method that you should do is creating a closing and opening price on the weekends. This is usually the time when volume of trades is quite low because majority of the financial world is not working. Based on the information you gathered on these weekends, you will be able to make some great trades.
The only thing that you need to remember with Forex trading gap strategies is that it is like doing trades in reverse. If the gap goes up, you sell. If the gap goes down, you buy.
This kind of method is simple and easy to do. It has also been proven to be effective and will make you a lot of money. However, just like with other financial techniques, there are always risks. It does not mean that if you use this technique you will be free from losses. Just prepare yourself for some losses. The great thing about Forex gap trading strategies is that it is very effective so your doubts about it should be gone now.