As soon as the market opens at 00:00 on Monday a trader should check the charts of certain pairs. As an example we use GBP/USD, AUD/USD, USD/JPY, but the choice of the instrument depends on the gap between close price on Friday and open price on Monday. The gap should be at least 20 points. The direction of the trade should be opposite to the gap. For example, if market opens with an upwards gap, it’s a signal to sell. Take Profit should be placed 25-30 points away from the entry point.

 

Ex. 1: GBP/USD

There is a downward gap of 28 points. A trader opens Buy order with Take Profit 25 point away from the entry point.

Gap trading strategy

Ex. 2: USD/JPY

There is an upward gap of 25 points. A trader opens Sell order with Take Profit 25-30 point away from the entry point.

Gap trading strategy

Ex. 3: AUD/USD

There is a downward gap of 20 points. A trader opens Buy order with Take Profit 25-30 point away from the entry point.

Gap trading strategy