Gap occurs when there is extreme sentiment in the market, so the party that is bullish or bearish towards a currency pair immediately dominates the market. Gap occurs when there are important news that have a big impact (hight impact). In addition, Gap also appears at the beginning of the week, if there are quite large incidents at the weekend after the market closure on Friday, so the compact market takes action in one direction during the market opening on Monday.
Therefore, we fundamentally take advantage of the big news to take advantage of the existence of GAP, without leaving no technical analysis.
Gap is a condition that arises when there is a large difference between the market closing price of the previous day and the market opening price the next day. In general, the cause of a gap in forex is formed due to the emergence of extreme sentiments on the market, so that buyers or sellers of a currency pair dominate the market in an instant. While this extreme sentiment can arise due to the existence of fundamental news that is so important, or when the market opens at the beginning of the week.
In general, the gap in forex is not always traded by opening a position opposite to the direction of the gap. There are still several other ways and trading systems that can be applied by using a gap in trading. For example, by using volume, because when a price comes to a large volume of support and resistance levels, the signals that occur around the area can be more valid and steady. Or it could be by utilizing the properties of Common Gap which always appears at the end of the day or the beginning of the week. This strategy does not emphasize whether the gap is in line with the trend or not. This strategy is also taken from the approach that most of the gaps that occur in the forex market must be closed. Even so, it needs to be stressed that the gap that occurs will not always be closed at that time, maybe it can only be closed next Sunday, next month or maybe even next year.