This is a video summary of the Live Forex Trading Room session on November 19, 2007.

Today’s Summary, by Sunil Mangwani:

This was the first day of the week, and as the market opens, we generally try to look for gaps. Weekend opening gaps are quite effective, and there is a method to trade it. It usually succeeds quite well.

AUD/USD opened with a gap. The general theory is that when price opens with a gap, the market will come back to fill the gap most of the time. If the gap opens to the upside, we tend to target short trades. Subsequent to price filling the gap, it gives further clues on the expected further movement.

The gap begins to act as a sort of channel. As we can see on the AUD/USD intraday, price closed the gap, went beyond it, and came back to retest it, which gave us the indication that price would remain short for some time. (more…)

This is a video summary of the Live Forex Trading Room session on October 29, 2007.

Today’s Summary, by Sunil Mangwani:

Mondays usually are slow days and we wait for the technicals to settle down before we think of following up with the last week’s trades or looking at intraday. But on Mondays we do look forward, as we get the technical setups for Gap Trading.

The gaps are not present on forex as much as other markets, as it is a continuous market, but on Mondays the market can open with a gap, and currencies will give you excellent setups. Gap trading techniques are very effective. Lets have a look at one of the currencies which gave us an excellent one today.

The NZD/USD gave us a gap, though not a very large one - usually the larger the gap, the larger the move. We wait for the market to come back down to fill the gap, and went in Short upon a Bearish Divergence, expecting the price to fill the gap, which it did. The gap turns into a kind of channel, and price found support at this level. A nice Short trade on the NZD/USD, without all that much effort, which is the main advantage of gap trading. (more…)

This is a video summary of the Live Forex Trading Room session on October 22, 2007.

Today’s Summary, by Sunil Mangwani:

Today the markets opened the new week with gaps, and we concentrated today’s trading activites on trading the gap. There is a specific way we trade the gap, which works a lot of the time and gives us the direction of the trend, subsequent to the day.

On the NZD/USD, we had a Short trade which we were able to predict due to the gap strategy, going in right after the price broke out of the gap channel, for a good trade.

The AUD/USD had a similar situation, giving a good entry for a Short trade, though not taken. (more…)