Hello please I would like to have an insight on forex weekend Gap… the opening of this week made about 50pip gap from last weeks close trade… I was wondering will this affect my support and resistance point or my trendline
Maybe an image of your chart will help the discussion. Can you upload one?
I noticed some gaps too. Who is your broker? Demo or live?
Looks like Oanda demo filled it in…
The price still does it’s thing above/below and after, and because the move was so huge compared to what’s around it, I don’t think your SR and trendlines change much. I’m still seeing a ascending trendline from 28th up to almost 0.74 Resistance at the peaks,etc.
Market closes for trading, but is still actually moving over the weekend, you can check pre-market trading price on CBNC.
News and fundamentals will blow past you S/R or trendlines without any regards, if this news happens to be over the weekend the market will move accordingly and hence create a gap and if no news at all the market pretty much opens near it’s previous close.
So be careful when leaving a position open over the weekend or be sure to trade to the positive side.
Example: USD/CAD may gap down because of the Data releases that happened today. CAD is strong USD is week. OPEC and others are struggling to revive Oil which is also good for CAD.
So if short on that example, you may want to leave open. But if long, you should close unless that’s not your style of course.
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Thanks I really appreciate, the same thing happen on nzdusd I missed the trade because of the gap after watching the price consolidating lastly on friday forming a bilateral triangle chart pattern … I didn’t have a clearer decision after the gap
I don’t trade gaps unless I’m stuck in a trade from Fridays close.
Dave, in this chart you stated you don’t have a clear direction. It appears the bottom line of your triangle is angled more up than the top is angled downward, also you have a strong pole that built the pattern so you might call it a pennant. At any rate, the odds (plus 70%) are that it would continue in the same direction as the pole that brought it.
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Okay thanks midwest,
I’m always open to learning so do the triangle have to form similar sloping angles?? I mean for the top and bottom lines you stated earlier
I look to see which line has a greater degree of slop to it, IE which is pushing harder. Also, in my opinion, the pole has much influence also.
While I don’t recommend their paid programs proact traders has some good Youtube on price action, poles, pennants, flags etc.
Price action is all about consolidation and breakout.
During the weekend days the markets are closed. So on Monday you will usually see this gap, because the markets have opened higher/lower from the end of previous week. In rare circumstances they open at exact the same level. You will not lose anything regarding technical analysis trends
During November-December gap is very common; personally I don’t practice gap trading, I wait for normal movements.