Gap trading still works with my btoker- just locked in sp short weekend gap, but I have the strange feeling if I rise the stake he will make problems like “technical interruptions” and that stuff, we’ll see
Where’s the losing trade? How much was lost?
this was only one position I opened Friday, it was pure gambling. But my broker still makes no problems.
when I make this experiment with two positions one of the following days I demonstrate it here with both sides.
Now it worked how I expected it to work:
Unfortunately the gaps during last weeks where not like in March when I detected that price behavior, but this weekend it worked properly:
Friday seconds before Market closed i took one long position 9 lot first account and short 9 lot second account, thats aproxx. 9 USD profit one full point. Before that I filled up the accounts each with own funds and 130% Deposit Bonus. So I leveraged my position with free Bonus money.
( its on the screenshots).
Today morning 03:00 when SPcash opened with down gap around 27 points the long position was stopped out immediately, but I only lost my own funds from this position because the bonus money didn’t hurt me when it was gone as well. From the loss on the screenshot only 126 EUR I really lost,(that was my deposit):
The other short account drove in full profit
242.10 USD after the opening, and I closed it :
As I am allowed according to the bonus rules to withdraw the full profit the result of this action is
as follows: 242,10 USD profit of Short Account minus 126 USD loss of stopped out Long account, makes overall profit of
116,10 USD.
Thats easy money! But as i mentioned at the beginning those big gaps like in march are nowadays rare, and i need (Trading with Bonus Money) at least 15 Points up or down to come into profit. Under 15 points I only loose the swap both sides if I close immediately after the opening.
And another nice Dax-gap winner from 30 to 31 June:
The same standard procedure on Dax30 : one acount long, one account short, using the deposit bonus and driving in again easy money.
As i estimated higher probability for a short gap my short position was a bit larger than the long position. But according to the situation yesterday it was clear, that there will be a nice gap in the morning in any direction.
Short position:
Deposit 100 USD and 130% Bonus gives me 230 USD trading capital, 1,52 lot. position size
Dax gapped down as expected, so i made (minus swap) 196,5 USD profit.:
Long position:
Deposit 70 USD, and 130% Bonus gives me 161 USD trading capital,
1,07 lot position size.
As Dax gapped down this account was sytem-stopped out immediatly after the opening, only 15,61 USD left.
As i only lost my own funds, the loss is 70 USD minus 15,61 USD, thats 54,39 USD.
The reward of this operation is as follows:
196,5 USD profit short position minus 54,39 USD loss long position is 142,11 USD. Thats it for the day.
And over this weekend the same again… 
As i expected: Dax made again nice weekend up-gap from 31.07. to 03.08., my long position covered the loss of short position. Long position was larger, cause i favored the long gap.
Long position: 1,56 Lot Dax30, made profit 154,68 USD
Short position: 1,24 Lot Dax30. made stop-out loss 126,56. But as only 53 USD were own funds and the rest Bonus money, i only lost net those 53 USD
The reward as follows:
Profit long 154,68 USD minus Loss short 53 USD ,
makes 101,68 USD.
Waiting for the next day that provides decent over night volatility, and the party will go on… 
This strategy looks really great to me! It’s innovative and very intelligent! But I am unsure about the following and shall be grateful if you help to clear my doubts please:
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When you are buying the long and short positions, seconds before the previous close, are you buying the long position at a price which is your estimated High of the Closing Candle? Or a few pips slightly HIGHER THAN YOUR ESTIMATED HIGH of the closing candle (as an insurance policy)? Similarly, are you buying the short at price that is at the estimated closing low, or a few pips below your estimated closing low?
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Do you always take whatever profit you make by the first opening candle? Do you never wait for the second candle?
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VERY IMPORTANT : What chart time frame are you trading this? 1 min, 2 min or 15 min?
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Does the same strategy work for Scalping with Index Options Buys (Call and Put at the same strike price?) Only one scalp a day - the first opening candle! Should the Option Purchase Pricing be done at the High and Low of the last candle of the Previous Day?
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Last but not the least, what do you do when the market DOES NOT open with a Gap Up / Gap Down, BUT at the same level as the previous day and the Opening Candle opens more or less at the same level as the Previous Day’s Closing Candle?
Replies shall be greatly appreciated. Thanks in advance.
Hello rajba,
thanks for your first post, congratulation!
- i buy both positions a few seconds before the close of the trading session of the day- on the 1M time chart, i only check the seconds on my watch during the last 30 seconds and before trading is stopped at 21:55 i hit the buy and sell “ignition” buttons on two different divices, as i trade on two different accounts.
2.Thats a good question! It depends on the dynamic of the first seconds after the opening. Normally i take immediatly the profit and close the winning position seconds after the opening. Last time i was so angry that i made only 50 bucks, that i hoped price will turn up some more pips. Unfortunately the opposite happend, and after i lost approx. 20 bucks from my 50 bucks profit during the next 10 seconds i closed and swore i will never be so greedy again and close allways whatever i get immediatly after the opening…
3.1 Min.
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Thats what i am checking out actually cause all those dubious Forex broker make troubles if you start to make money.
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The propability that he gaps not at all is very low - normaly he (the badger) gaps allway some pips up or down, so the winning side allways covers the spread and the swap of this side- the loosing side suffers the swap and spread untill the overall winning zone is reached of the winning side. So the worst is that you lose the spread and the swap of the loosing side, if you close both positons immediatly after the opening, without having reached the winning zone.
But i must underline that this is not a general working trick, because the generous bonus programm and the negative balance protection of the broker guaranteed, that this operation worked.
With high leveraged options on the estimated up or down gap (as you mentioned)- it should work even better and you trade with more serious “real” broker instead with those bucket-shops.
Regards!
Hi Kashmaster
Sincere gratitude to you for your very prompt reply and for welcoming me to the forum. Your reply has been very helpful. I want to briefly discuss the matter a little more…
In the exchange where I propose to trade the Options, there is something called a GTT (Good Till Triggered) Order. This means that I can buy a Call Option and a Put Option at the previous day’s last candle’s High and Low respectively, BEFORE the market opens today (or at any time overnight). HOWEVER, if the market opens with a Gap Up the next morning, then ONLY my Call Option GTT Order will get triggered and my Put Option GTT Order will remain inactive. So I am protected from any Loss from the loss of value of the Put Option, as it has not been triggered at all. Thus, it appears that whichever direction the market takes, one of my Options should earn me some profit in the first candle, while the other remains inactive.
However, there is no bonus program and no negative balance protection. So the entire trade is with my own money.
The other risk is that if there is a whiplash of the prices in the very first minute candle, which is wider than the size of the previous day’s last candle, then both of my GTT orders MAY get triggered and I may lose some money in the Option of the wrong direction. However, that should not be too much hopefully and this scenario is unlikely to happen frequently as far as I can visualize.
I would request you to kindly give your views on my above strategy and particularly what are the pitfalls in it.
Thanks in advance.
Regards
Hello rajba,
but the problem is, do you get , in case you speculate on an up gap, the low price you need to close after the opening in profit with a GTT order?
if DAX jumps up in the morning 2%in a second, your option won’t be triggered at the low price you set at GTT. That’s too fast movement, you will get a much higher price to buy the option so you won’t make much profit, or no profit at all, thats Like a Stopp Löss Order that i s triggered at a much worse price when price rockets up or down like crazy.
There won’t be a way around it that someone has to buy the option in advance to secure a low
Price, but as I said, I am just checking out this option,/certificate variants.
Hi my friend so does the strategy still work for you? because my broker banished me and brought a complaint against me …
The strategy in principal works always under those mentioned circumstances , but the strategy is taylored for the large deposit bonus of that broker - it works also with other indices, and broker who provide a long brake between the trading hours and low spread.
But I have the impression, that some broker dont like this kind of arbitrage trading, because after some nice winners the broker closed my account without mentioning the reason. If your broker just brought in a complaint, you were more lucky than I.was.
Actually I check out wether this kind of trading is not so loved by brokers in general, cause i found another broker where this is possible with another index and it worked in tests with minor amounts.
But I stopped it until I am sure, that this kind of trading is not an " informal foul" for brokers in general and that broker again closes my account.
hi my friend according to some brokers this practice is strictly prohibited because the losses due to the gap are swallowed up by the broker himself to prevent the client from having a negative balance so no broker will accept it and notice it very quickly and will ask you to reimburse with a complaint, sorry for my English I am French and I have a poor command of English
This very same strategy occurred to me a over a year ago when I noticed the gap over the weekends on US30. I didnt bother to explore it further because I did not have enough funds to give it a shot but I think it could work. I dont think the brokers would be happy with it though. But then again if you have a small account would they notice what you are doing?
yes they will notice it very quickly and block you and threaten to sue you in addition to that they will ban you from any registration to be careful
Ok thanks for the heads up.
Does this mean, that the negative balance, that will occur, is a loss to the broker when he provides negative balance protection?
Than I understand why they don’t like that
Yes exactly
Another example what i mean,thats what i did last week, gave me approx. 38 EUR profit:
At 21:45hrs Friday, the last minute when Neth25 index was traded, i took one position long 5 contracts, and on the other account 5 short.
Approx. 18 EUR each position.
Monday morning when Neth25 opened at 0800hrs, there was a down gap after 5 minutes ( i cant trade the first 5 minutes, my broker allows trading 5 minutes after the opening at 0800hrs), you see a down gap of approx.13 points.
Each point after 4 points up or down is riskless profit, so i made 9 points profit on the down side, cause after 4 points down the long position is stopped out, negative balance is adjusted. (screeshot), and i lost only the deposit.
Every result under 4 points is more ore less break even, i only loose the spreads.
