Gap highlighter

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Gap highlighter

Postby robocod » Wed Dec 19, 2012 4:17 am

The FXCM data feed for MarketScope does not show gaps in price action. In fact the open of a bar/candle is always the exact same price as the close of the previous bar/candle. This is not what happens in real life. Whether this is a bug or a feature, is not clear. The problem might get fixed by FXCM at some point in time. However, in the interim this indicator will re-construct the bars/candles from the tick data, and so generate proper open/high/low/close values. With this indicator the gaps are now present, and furthermore the indicator will automatically highlight any gaps bigger than a specified size.

Price gaps (micro-gaps, weekend gaps, etc.) are vital trading clues for the informed trader, giving indications of market strength and weakness, depending on the type of gap.

On a very liquid instrument like EUR/USD, gaps of 1or 2 pips rarely occur during normal trading hours. Only during the weekend, or during a news event are gaps of 2 pips or more evident. However, some CFDs, like UK100 or GER30 will often show gaps every session open. Additionally, because they do not use fractional pricing and also have lower liquidity, gaps can also appear in normal trading. Such gaps are sometimes called micro-gaps (as they are only a pip or 2). Micro-gaps can give a good indication of aggressive buying or selling.

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This indicator is available from my blog for a small fee. I also include some educational material on gaps, as well as chart and trade examples on my blog.
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robocod
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Re: Gap highlighter

Postby robocod » Wed Dec 19, 2012 4:21 am

Here was a great example from the start of the week. A large gap-up on SPX500. As is usually the case the gap closed (1st high probability trade). However, the gap also indicates supply/demand (demand in this case), which was ultimately the driving force and catalyst of the huge S&P rally that we saw this week (2nd high probability trade).

spx500_2012_12_17.png
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Re: Gap highlighter

Postby robocod » Sun Jan 27, 2013 12:44 pm

I made a Release 2 of this indicator.

Gap Highlighter (Release 2)
  • Added ability to show “inside gaps”, i.e. inside the bar / candle and not just the open
  • Added gap direction “markers” (up/down arrows)

Gaps "inside the candle" show aggressive price moves or spikes which can show significant imbalance of supply/demand.

screenshot2.png


Details on my blog.
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Re: Gap highlighter

Postby robocod » Fri Aug 23, 2013 5:50 am

This indicator is no longer available.
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Re: Gap highlighter

Postby zafar500 » Mon Dec 29, 2014 7:59 am

Price gaps (micro-gaps, weekend gaps, etc.) are vital trading clues for the informed trader, giving indications of market strength and weakness, depending on the type of gap.
sufi
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Re: Gap highlighter

Postby daniel.kovacik » Mon Jan 05, 2015 12:34 pm

Hello,

I ve downloaded this indicator from your blog. Its not anymore there, so probably there are not any new updates.
I ve had some issue with this indicator on smaller timeframe. When I ve scrolled back chart suddenly disspeared.
Let me know please about some new releases.


Thanks
DK
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Re: Gap highlighter

Postby robocod » Wed Jan 07, 2015 4:34 am

daniel.kovacik wrote:Hello,

I ve downloaded this indicator from your blog. Its not anymore there, so probably there are not any new updates.
I ve had some issue with this indicator on smaller timeframe. When I ve scrolled back chart suddenly disspeared.
Let me know please about some new releases.


Thanks
DK


The "Gap Highlighter" is no longer available, and is not supported. This is because FXCM limited the historic tick data to 5000 ticks, which limited the usefulness of the indicator. Also processing tick data is very resource intensive.

I developed a more efficient indicator called "Gap Fix" which just loads the tick data for the new session bars (e.g. when a CFD like DAX starts at 8am CET), this is available on my blog.
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Re: Gap highlighter

Postby fpost230 » Tue Jan 27, 2015 11:54 pm

The FXCM data feed for MarketScope does not show gaps in price action. In fact the open of a bar/candle is always the exact same price as the close of the previous bar/candle. This is not what happens in real life. Whether this is a bug or a feature, is not clear. The problem might get fixed by FXCM at some point in time. However, in the interim this indicator will re-construct the bars/candles from the tick data, and so generate proper open/high/low/close values. With this indicator the gaps are now present, and furthermore the indicator will automatically highlight any gaps bigger than a specified size.
Farasat
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