On Fridays, forex brokers close their trading offices and reopen them on Monday morning. However, there are many countries that are financial institutions open over the weekend, and there are also many news and political and financial events that will drive the market. Saturdays and Sundays. due to this the Friday price is usually considerably different on a Monday morning when Brokers reopen their trading facilities. this is often referred to as the Forex Weekend Gap.
It must even be noted that these gaps are Broker specific. Not all Forex brokers close and open their dealing desks at an equivalent worldwide time.
As reflected during a previo
us study done by Expert4x these gaps average between 32 to 11 pips counting on the currencies involved. the most important gaps vary between 147 pips and 51 pips over an eighty week period. 81% of 5 hundred and twenty four gaps studied, close within
an equivalent day that they occur. By close we mean the Monday price returns to the Friday price, whereby closing the gap.
The facts mentioned are that it immediately creates opportunities for forex brokers that have been used by experienced traders for years.
The first is that the weekend straddle which, if you’ll find an appropriate broker, is that the lowest risk trade Forex trading. you’d simply straddle the worth at the close of trading on the Friday with pending orders and shut any activated deals on the Monday morning. Although this sounds very simple, there are some commercial skills involved.
The second opportunity is made by knowing that 81% of gaps draw in an equivalent day. this provides you the knowledge you would like for your next trade. you’d simply enter a deal within the direction of the Friday price when the Monday morning price is understood and trading commences. This trade is additionally not as simple because it sounds and care should be taken to use appropriate sized stops. Many traders use the very fact that some brokers open before others on a Monday morning to urge advanced price movement information to assess the market sentiment for closing the gap.
When the gap isn’t closed the currency price often runs for many pips which creates a 3rd online forex trading opportunity.
As are often seen from the above it’s vital to review Forex Market behavior from many perspectives because the market creates great trading opportunities a day or hebdomadally as within the above case.