Hi
Can anyone tell me his / her opinion on forex weekend gaps? I have noticed that it is not the first time I notice a gap on a currency as soon as the market opens after the weekend on sunday…and it seems that this gap always get filled. For eg this weekend there was a gap on Eur/Usd, Usd/Jpy and also on Aud/Usd and these all or nearly got filled…would have been good trades!
What are your views pls and how can we apply a stop loss as I have no idea…thanks!
Gaps occur because of the fundamental factors. There are lot of things happening on the weekend. Currency pairs move mostly on the fundamental reasons. When there is a positive news happens for a currency on the weekend it will gap up when market open next day.
As you noticed most of the time the Gaps will filled but not always (Surely it may filled after some days or weeks). If the fundamental factor is strong for the currency it will move without getting filled. But some times it will move to fill the gap because of many reason. They said a Currency moving based on Technical, Fundamental and Supply / Demand. I’m sure one of the reason why the Gaps filling. 
So, how to trade on the Gaps? In my Opinion It’s Risky to trade for the fill. Who know the fact that happened for the gap is something strong?
The best way to trade a Gap is Understand the Overall Trend. If the trend is Up and A pair is Gap up then buy when the gap filled. Most of the time it will continue its trend because the trend is up and for some reason it gap up. So we can believe the bias is bullish. Stop loss should be below the previous low on the lower time frame (for Long).
It’s possible to trade for the gap filling. First Understand the technical levels (Support/Resistance) and Enter after it starting to corrective move. Stop loss should be the high of the Corrective move (for Gap Up).
I really want to type more about this. But My Time and English not allowing to explain it in depth. Hope it helps some.
Good Luck
Yes thanks…it did help especially when you explained to take note of the trend which for sure I did not consider it.
Most traders believe that “All gaps get filled” but it’s a matter of how long it takes. There are instances when economic reports are released over the weekend and this can affect whether currency pairs open higher or lower on a Monday. A possible scalp trade strategy for this could be to play the gap fill and set a stop below/above the week open price and just aim for the previous week’s close. Another way could be to wait for the gap to get filled then take a longer-term position in the direction of the trend.
Long story short, your weekend gap is a bit of a myth. Weekend gaps happen because the true interbank side of the foreign exchange is open 24/7, but your retail spot forex broker is only open 24/5. So the market is actually open all weekend long, we just can’t access it. Because of that, price moves on the creating a data break/gap in most broker’s charts, but it’s certainly not a true gap because you can watch price move all weekend via a few live price feeds. It’s a lot like watching paint dry though. Usually not terribly active unless some news comes out of somewhere like China that has announcements over the weekend, or some act of nature or other business shakes up the market. A few months ago, the announcement of Larry Summers possibly being the next fed head came on the weekend leading to sizable weekend market moves that left a lot of people out some money come Sunday evening open.
There might still be a retail broker or two still allowing retail weekend trading, (Oanda stopped a year or so ago) but because of the lack of liquidity the spreads are retarded.
Where can you find live price feeds over the weekend? That would help a lot with trying to guess the gap, and modifying the sl or tp.
There are several. Search “weekend forex rates”. Here’s one: Currency Rates - FXStreet
But even if you can see what is going on, if you have a trade open you won’t be able to modify the stop because your broker will be closed.
Thanks for the link. My broker allows me to change stop loss and take profit over the weekend. I use cTrader with IC Markets. Not sure if its the same way on their mt4 platform. This weekend I adjusted my GBPUSD take profit, which would have been great if I didn’t get greedy and wait till it went back down 
thank you for great insight master tang and bigpip
The prices of the currencies keep on changing during the weekends as well. Its only the broker that are closed and for this reason if on any week end the prices have a wide change than closing time, the gap will be bigger.
Do some research on the currency pairs that you are interested in trading. Perhaps look at the average weekend gap rate and the largest weekend gap that has occurred over a sample of trades (large enough to draw a confident conclusion from of course). When you have this answer you can look at all your current trades which are going to be held open over the weekend and analyse if they have enough breathing space in comparison to the typical gap which one might expect (which is the answer to the above question).
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