Saw something very interesting.
On the M1 chart (depending on what platform you use), you can clearly see gaps in the data. The theorem that all one minute gaps get filled, is a very plausible conclusion and the vast majority of them do indeed get filled.
Therefore, when a Swap occurs after a gap has been formed, I can use that opportunity to reduce Swap Loss in the aggregate, by allowing enough time for price to return to the gap area. Typically, on an M1 chart, the time it takes to fill a gap is not that long an the movement of price away from the gap is not that much - not enough to warrant fearing a -70 to -85 pip move against the Swap Cycle, which is about the maximum total Swap Loss that I would want to sustain for a single Swap Cycle.
Right now, is a good example. At 0220 GMT-1, there is an M1 gap. At 0230, price attempted to breach the T-Trigger on the M1 chart by touching the Line at 3858. I'm going to hold the current Swap trade and allow time or the gap to fill.
0220 M1 high is 3847. 0221 low is 3849. A 2 pip negative gap. Current close price is 3858. Distance to gap closure is roughly 11 pips. This decision to hold through gap closure should result in a savings of at least 11 pips in Swap Cost.
Let's see how the theory plays out.
On the M1 chart (depending on what platform you use), you can clearly see gaps in the data. The theorem that all one minute gaps get filled, is a very plausible conclusion and the vast majority of them do indeed get filled.
Therefore, when a Swap occurs after a gap has been formed, I can use that opportunity to reduce Swap Loss in the aggregate, by allowing enough time for price to return to the gap area. Typically, on an M1 chart, the time it takes to fill a gap is not that long an the movement of price away from the gap is not that much - not enough to warrant fearing a -70 to -85 pip move against the Swap Cycle, which is about the maximum total Swap Loss that I would want to sustain for a single Swap Cycle.
Right now, is a good example. At 0220 GMT-1, there is an M1 gap. At 0230, price attempted to breach the T-Trigger on the M1 chart by touching the Line at 3858. I'm going to hold the current Swap trade and allow time or the gap to fill.
0220 M1 high is 3847. 0221 low is 3849. A 2 pip negative gap. Current close price is 3858. Distance to gap closure is roughly 11 pips. This decision to hold through gap closure should result in a savings of at least 11 pips in Swap Cost.
Let's see how the theory plays out.
Y = MX + B. The most important price level of all.