CAD/JPY GAP 💡

Now this is a different story! There was a 160 pip opening gap on the CAD/JPY! The price haven’t even get close to closing it. The volatility is pretty big here. This means the gap could get filled shortly. I would not be surprised if it got filled today or tomorrow.

It does not matter too much when it will get closed though. The thing which I find interesting here is the heavy Volume Cluster which got created before the gap (Volume Cluster with the heaviest volumes at 78.51).

According to the gap trading strategy this Volume Cluster should work as a strong resistance and when the price closes the gap and hits it, then it should react to it and go downwards again.

Adjusting to a bigger volatility
When the volatility rises to such extent like now then it is necessary to adjust to such market conditions. If you were used to trading with 10 pip Stop Loss then now when the volatility rose you should widen your SL (and TP).

In most of the cases I like to stick to my fixed Stop Loss and Take Profit pip values but when volatility changes as drastically as now then I adjust it. At least for a few days until all gets back to normal again.

I hope you guys liked this article. Let me know what you think in the comments below! And remember to trade carefully especially in conditions like these.

Happy trading!

-Dale