Normally we don't encounter huge gaps in forex, back when i used to swing trade, i would to take off 80% of my positions at key levels on Friday and leave the rest floating with stop loss at breakeven.
Right, now I'm focusing on UVXY TZA for inverse daytrading and SOXL for long bias. Market did exactly what I said it was which is a false breakout upside morning bounce followed by lots of selling, just like Friday - piece of freaking cake. Will aggressively trade UVXY if afternoon run again
I place hard stops the night before to protect my capital. 99% of the time it works great but occasionally an overnight gap causes a bigger than planned for loss. It's just part of trading and needs to be built into my overall money and risk management strategy. If a gap loss is too big to stomach, that tells me I'm trading too big.
%% Exactly; most gaps favor the main trend, usually. Even with single stocks i allowed for a 50% gap against me ,even though i was blessed not to have that happen\happens a lot if enough charts are noted .........................................................................................................ON ETFs like QLD+UPRO, splv....... i do it different, since most stops get hit. A bigger gap than expected can help with hard stops ,SQQQ also.