Trading the Dow Jones after gap down and price was at an area of support and resistance (congestion dots). First, price opened down (gap down) at the open (about 100 points) due to the Greek crisis. A line of congestion dots were plotted (gray dots) indicating a support area. The Directional Volume indicator showed no sellers were in the market. I entered a long position at 17599 (with only 3 contracts as there is not a lot of volume during Asia) with the expectation that price would at least go to the Average True Range Stop at 17674. I set a stop at 17580 (19 ticks from entry). I set a profit target at 17660 (61 points from entry).
This is my typical entry — price is at an area of support (or resistance), there were no sellers in the market, and a test for buyers was anticipated. The Gap was just an additional piece of information that indicated price would go up.
For those that are unfamiliar with trading gaps, a gap is created when the current price bar opens at a different price than the previous price bar close (either lower than the close or greater than the close).
With Forex gaps, you can also trade the binary options, in anticipation of the gap being closed. However, I recommend out of the money that is within the range of the gap closing. I typically choose an area that has average true range stop as that always provides support or resistance.