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  #60754  
Old Apr 13, 2010 7:44am
Grateful to Merlin, Jim and Fudd :)
 
Member Since Jun 2008
More than 10 Vouchers  707 Posts
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Quote:
Originally Posted by jarroo View Post
I'm sure Aaron (TiaForex) won't mind. He's a great guy.

It is an excellent signature.
I don't mind at all. In fact I'm flattered and honored you'd use something I wrote as your signature, so thanks
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  #60763  
Old Apr 13, 2010 12:39pm
Grateful to Merlin, Jim and Fudd :)
 
Member Since Jun 2008
More than 10 Vouchers  707 Posts
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Originally Posted by bertie123 View Post
Hi guys

can anyone explain why we got all these gaps in the last few days and is anyone trading them? Are these gaps a good opportunity?
The forex market is open 24/7 but our brokers are close dover the weekend. That means any weekend trading that affects price (sometimes reactions to news, sometimes not) will be reflected in an opening gap. That shows up on everyone's charts and because gaps almost always close, everyone is suddenly looking for the gap close.

I play them similar to Mike. They often run far the other way before closing so I try not to sit there with a mammoth drawdown. I open a small exploratory position and then use the gap for information. I'll either use it as a support resistance level (gaps sometimes close then turn around and head back the other way) or sometimes if I get solid price action pointing towards the gap then I Know we're headed into the gap and I can hold longer.

It's really a very discretionary process and I think a little more complicated than "see the gap, open 1% position to close" because that often leaves you sweating some drawdown. The bigger gaps tend to stay open a little bit longer too in my experience.

I am digging into my archives to find an old trade I took to illustrate my point. See the pinbar off the 7500 level on this NU. And see how the trade had an obvious target, the gap close, which it reached. Sometimes it pays to not open a position on Sunday night and wait to see a signal that the gap is about to close.

You can also scale in and scale out as Mike does, you certainly don't have to wait for full gap close.
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Last edited by TiaForex, Apr 13, 2010 12:56pm
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  #61017  
Old Apr 16, 2010 12:41pm
Grateful to Merlin, Jim and Fudd :)
 
Member Since Jun 2008
More than 10 Vouchers  707 Posts
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Quote:
Originally Posted by lovejoy80 View Post
Did you know Lehman Brothers went into Bankruptcy?
Now that made me laugh. Thanks for that lovejoy, I'm still smiling.

I don't really care too much about news unless I am trading a very fast timeframe in which case my news involvement boils down to "stay away from the red calendar announcements on FF". In 1H trading and up, I completely ignore it and stay away from putting a position on in the hours before NFP. And that's pretty much it.

The way I see it, there are people smarter than me with access to much more information than me, and they are in charge of big money. When they move that big money they leave footprints on the chart. My job is to read those footprints. If I try and read the news and formulate a trading plan then, well I've never seen chart moves "make sense" according to the news. In fact when I see traders in other threads on FF trying to join the dots on world analysis to create a plan for how price will move it just sounds a little....naive. I think the best retail fundamental trader I ever saw was merlin and he could stitch things together in a way that was beyond me. Price action is simpler.

I posted on PF just now that this piece of news will affect me in one way: given that it's huge and it hit friday afternoon, it might make me close out a trade I was holding onto tonight, rather than sticking with it over the weekend. Of course that all depends on timeframe. If I was in a daily position then I'd be hanging on. But if I was in the 4H BUOB on UCAD then I'd probably look to take profit and not have to sweat over a potential gap.

The irony is, I devour financial books and fun stuff about Wall St and the economy. I love that stuff. I just don't base any trading decisions off it.

Oh, and I get those questions all the time Mike. My other favourite is "where do you think the euro is headed?" or "what's going to happen to the pound". I always tell them "dude you're asking the wrong guy. I have no idea" and they look at me like I'm crazy...lol.

Last edited by TiaForex, Apr 16, 2010 12:58pm
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  #61019  
Old Apr 16, 2010 12:49pm
Grateful to Merlin, Jim and Fudd :)
 
Member Since Jun 2008
More than 10 Vouchers  707 Posts
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Quote:
Originally Posted by mbqb11 View Post
LOL, I say what is the euro?
My favourite line was one of yours for when someone asks where the euro is

"I dunno.... one something?"

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