Candle stick gaps over the weekend and open trades

Beginner Questions
1

Hey everyone

Regarding trades over the weekend where there is market gaps. When the market opens there was a massive jump in price like in the screenshot , Would that position be closed immediately as its gone over my profit target ?
And for the opposite if i had a stop loss and the market opens well under my stop loss would i be taken out at my stop loss or at where the market opens.
Cause it it closes at market price that would have a massive affect on my account cause it would no longer be within my 1% account risk.

https://www.tradingview.com/x/RMseSGPC/

Thanks for your help

2

EU had a 20 pip gap on open today also. Yes, your position will be closed. Your profit target could actually be jumped and you could receive more profit than what your TP order was set for. Unfortunately, your stop loss order can be jumped also, which means you could wind up losing a lot more than what your stop was set for.

The solution is to hedge your position a few minutes prior to the close of the NY session on Friday. The idea here is to even out your loss by having a position open in the opposite direction.If a large weekend gap occurs like it did this week, you won’t lose any more than the cost of the spread.

Find a broker that offers sub-accounts. This way, anyone can conveniently hedge by using two separate accounts.

3

Yep, because just because you have a stop loss in , still requires the position to be filled and your losses could move quite far from your SL until the order is filled…

4

For what it’s worth there are one or two brokers that allow you to place GUARANTEED stops. But you pay (handsomely) for the privilege.

And for what it’s also worth: very good way to test the integrity of your broker. If your broker slips your TP in your favor then stick with them. Unscrupulous brokers will happily slip your SL against you but don’t apply the same rule if the opening price is in your favor. Some will cover it up by not executing your TP until price retraces to your TP (which it normally always does unless it’s a breakaway gap which doesn’t happen that often).

1 Like
5

Great insight, thanks.