Trading the Sunday Open, Gaps, Thin Liquidity and Patience

[Fairman]

Trading the Sunday Open, Gaps, Thin Liquidity and Patience

The market reopens on Sunday evening, and many traders feel tempted to jump in immediately. But the first hours are often thin, with wide spreads and erratic moves.

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What happens at the open:

- Liquidity is low as participants return gradually
- Spreads may be wide
- Price may gap from Friday's close, especially if weekend news occurred
- Initial moves can reverse quickly

How to approach it:

1. Compare the open to Friday's close. Note any gap.

2. Check weekend news. What happened that might affect currencies?

3. Wait. Avoid trading in the first 30 to 60 minutes. Observe how price behaves.

4. Mark the weekly open and early range. They become reference levels.

5. Look for a sweep and shift later, once liquidity builds, especially as Asia and then London activity grows.

6. Reduce size if you do trade.

7. Check your stops. Gaps can cause slippage on carried positions.

Useful mindset: Sunday is for preparation, not for forcing trades. Many traders use it to set the plan for the week and let Monday reveal the first real direction.

If you hold positions over the weekend, review them right after the open for gap effects and adjust as needed.

The open rewards observers. Let the market settle before you decide.

[Fairman]

One rule I follow: no new trades until at least an hour or two after the open, and only once spreads are back near normal. If there's a gap, I'd rather watch whether it fills before deciding anything. Nothing about the first few minutes is worth the spread. For us the market reopens around 10pm Lagos time on Sunday while the US is on daylight time, which is late anyway. My usual approach is to note the opening price and any gap on Sunday night, then do the proper analysis on Monday morning before London. Many small gaps get filled within the Asian session, but big ones after weekend news can keep running.

[LondonNewsTrader]

Compare the open to Friday's close. Note any gap.

The useful question about a gap is whether there's a headline behind it. A gap with no obvious weekend news is often just thin early pricing from a handful of dealers, and those tend to fill once Sydney and Tokyo liquidity arrives. A gap that follows a real event, an election result, a surprise policy statement, Chinese data released on a Saturday, reflects new information, and waiting for it to fill can mean waiting a long time.

So before step 3, I'd spend two minutes on the weekend headlines. It decides whether the gap is a level to watch or simply the new price.

[Fairman]

Something to add: Sunday gaps don't always fill. People sometimes treat gap filling as a rule and buy or sell against the gap, but if there was real weekend news, the gap can be the start of a new move. A rough guide: a small gap with no news often fills during Asia or early London. A gap caused by an election result, a central bank statement or a major geopolitical event can keep going for days. Check the weekend news before trading any gap. And remember that spreads at the open around 10pm Lagos in summer are wide, so wait an hour at least.

[PTScalper]

Something to add: Sunday gaps don't always fill. People sometimes treat gap filling as a rule and buy or sell against the gap, but if there was real weekend news, the gap can be the start of a new move. A rough guide: a small gap with no news often fills during Asia or early London. A gap caused by an election result, a central bank statement or a major geopolitical event can keep going for days. Check the weekend news before trading any gap. And remember that spreads at the open around 10pm Lagos in summer are wide, so wait an hour at least.

Yeah, you are right. Its not 100 percent rule, its something like indicator, that filling that gap is more probable than not.