The MT4 Forex Weekend Gap EA SETTINGS

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Weekend Gap Strategies

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  1. Remember weekend Gaps are unpredictable and do not happen every weekend
  2. To stand the best chance of success it is best to trade them very weekend
  3. It is best to try to trade as many currencies as you can every weekend
  4. If you have to limit your currencies eliminate the ones with the lowest liquidity and highest spreads.
  5. Select a risk management approach that takes your account size into account. Calculate what you stand to lose if all your deals go bad and make sure you a comfortable with that number.
  6. Be patient - there are currencies that only have 5 to 10 trade-able weekend gaps in 1 year
  7. This is a market behavior trade using no indicators and which has a very high success rate - do not over manage the trades (use trailing stops or try to refine the entries excessively)

 

General Guidance

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Most asked questions:

  1. Is there a way to know which pairs to trade?
  2. Is there a way to know what the maximum spread should be?
  3. A way to know what size the minimum gap should be?
  4. What roll does currency volatility play?

Answers

  1. Your decision of which currencies revolves around the question of: "How much are you prepared to lose?" Trading 20 currencies and risking 3% of your account per currency could mean that you could lose 60% of your account on a Monday. So make that decision first. Adjust the number of currencies traded and the risk per currency. Then select your currencies starting with the majors with highest liquidity and lower spreads and then only move into the exotics with lower liquidity and higher spreads.  Take current market activities into account when selecting currencies - e.g. bank holidays
  2. Why not just use use your trading common sense. Just ask yourself "What is the maximum spread I am prepared to pay to enter a deal?" and enter that number. For guidance click here to see the spreads of 60 brokers>  60 broker spreads
  3. The Gap size is also common sense. The smaller the gap size the more trades will be taken (with possibly a lower success rate) and the bigger the gap size the fewer trades will be taken (with the possibly of a higher success rate). You need to make that decision - it is a balance of success rate and profitability. Obviously the Gap size should provide for a reasonable stop (no less than 10 pips) when taking the spread into account. The spread could reduce the effectiveness of your stop size especially if your stop is a buy transaction.
  4. Volatility can play a roll in setting the minimum gap size. The  bigger the volatility the bigger the minimum gap size. So if the lowest volatility gap size is say 12 the all the higher ones could be in proportion higher based on their volatility.  Example: - So if the volatility of the EURUSD is 100 and its minimum gap size is 10 plus the spread then if the the GBPJPY has a volatility of 200 then the minimum Gap size should be 20 plus the spread. That is one way of using volatility is a common-sense type of way

Make sure to be on the Weekend Gap mailing list

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Gap size = setting for the MinimumGapSize_Pips input

When is doubt use the default settings above !!

  1. The default settings are sensible settings for most currencies. They are not optimized.
  2. The EA does no require a specific time frame. Choose a timeframe that will allow you to view the transactions eg. 5 minutes
  3. When using the default settings make sure that the min gap size is doubled for currencies with a maximum spread of over 4 pips.

Account balance is the balance in your account

Equity is the Balance of your account after taking open deals into account

Margin is the balance of your account after taking open deals and margin requirements into account.

If you are unsure of which method to use use the Free Margin method as it has the lowest risk and is likely to allow you to trade more currencies.

Optimization settings

If you are experienced at optimization we suggest starting with the settings below for your optimization runs which could be run on a simultaneous basis (990 options) or on an individual input basis using the rule of 4. Please note we do not offer support in optimization testing but you can start a discussion in the Forum on optimization testing

 

Settings based on currency volatility

Each currency has its own personality . The main variables are the currencies volatility, the currencies spreads and general liquidity (Major currencies have the most liquidity and sometimes spread give a guide to this)