GAP Finder Indicator
The GAP Finder Indicator for MT5 provides BUY and SELL trading signals using bullish and bearish price gaps.
Description
The GAP finder indicator for MT5 scans price charts and alerts you to a BULLISH or BEARish gap. In addition, the indicator displays closed gaps in history.
Forex technical traders can take advantage of these gaps and trade them using open and closed gap technical strategies.
The indicator works well on all intraday price charts as well as daily, weekly and monthly charts.
Forex traders can change the indicator settings to determine the minimum required price gap for trading signals and alerts. Moreover, traders can enable or disable the display of closed and open gaps.
GAP Finder indicator for MT5 trading signals
The USDJPY M30 price chart below shows the GAP finder indicator for MT5 in action. The indicator shows closed bullish gaps in BLUE and bearish gaps in RED. Similarly, it shows open bullish gaps in BLUE and bearish gaps in RED.
Gaps form when price jumps, creating a difference between the current bar’s close and the new bar’s open. In a bullish gap, the opening price of a new bar is higher than the closing price of the previous bar. Similarly, in a bearish gap, the opening price of a new bar is lower than the closing price of the previous bar.
Forex traders approach this gap in two different ways. The first method is to enter a Bullish gap with a BUY position and place a stop loss below the previous swing low. However, the best take profit position is based on price action. Similarly, if there is a bearish gap, the trader expects prices to continue to be bearish and places a SELL trade. The best stop loss position is above the previous swing high with price action based profit taking.
The second method is to expect the market to eventually close all the gaps. Thus, when there is a bullish gap, the trader expects the price to reverse and cover the gap, this refers to the closed gap. Thus, traders will enter a SELL trade with a bullish gap. Similar. If the market shows a bearish gap, traders expect prices to turn up and close the gap. So, forex traders enter into a BUY trade with a bearish gap.
Conclusion
The GAP finder indicator for MT5 is useful for some traders who need gap trading methods. However, the main benefit for gap traders is the alerts that help the trader when a gap occurs. In addition, forex traders can download the indicator for free and install it easily.