Howdy Folks,

Although the currency market trades twenty-four hours a day there is a short pause in trading between the New York close on Friday evening and the Asian open on Sunday night. When Asia opens it is really the only opportunity spot currency traders have to trade opening gaps. I think the best presentation I’ve seen on trading gaps in the spot market was done by Sam Seiden at FXStreet.com titled Professional Gaps vs. Novice Gaps in the Forex Market. Sam points out that after a period of heavy trading if the market gaps in the direction of the trend it should be thought of as a novice gap. Novice traders are often interested in jumping on a bandwagon at exactly the wrong time only to be run over by the forces of supply and demand. The correct action to take when a novice gap appears would be counter trend. Professional gaps on the other hand, gap against the previous trend and setup a continuation move.  I won’t go over the full details because Sam does it much better in his full presentation. If you want to see it, follow this link:

http://transcripts.fxstreet.com/2009/02/professional-gaps-vs-novice-gaps-in-the-forex-markets.html

Gaps do not happen very often but if Friday was a heavy trading day a gap may occur on Sunday. Watch out for gap opportunities, try using Fibonacci for a profit target and take advantage of this approach to trading on Sunday afternoon (in the U.S.) as Asia opens for business.

Best of luck this week!

Ryan