Do gaps 'always' fill?

gaps do not always fill.

I think this has been discussed before.
But, think about it, if they always filled everyone would have an easy edge.

How often is that the case in the stock market?
 
depeneds on when you are looking at the gap

same day gap fill? = 50/50 , after slippage/commish = you become 60/40you.

5 -30 week old gap fill and nearing price? 90% chance.
 
One could argue that any gap just "hasn't been filled yet." Although, that isn't an argument worth betting money on.

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I'm also doubtful of that 90% long term stat, although I agree more on the 50/50 one. I would argue that over the long run, gap downs get filled more often than gap ups. Although I haven't done the study, that seems like common sense considering the long term bias of the markets.
 
Quote from dtrader98:

gaps do not always fill.

I think this has been discussed before.
But, think about it, if they always filled everyone would have an easy edge.

How often is that the case in the stock market?
More...


Yeah thats kind of what I was getting at ---- if you 'knew' it would fill - thats too big an edge

but Ive been looking back over charts and dont see one yet that took more than 10 days to fill

thanks for the feedback
 
Sounds like you're onto the start of a potential trading strategy.

Identify, theorize, backtest, make some rules, trade.
 
gaps do not always fill but when they do fill you can use that as potential support/resistance for some low risk/high reward trades
 
Quote from lescor:

Sounds like you're onto the start of a potential trading strategy.

Identify, theorize, backtest, make some rules, trade.
More...


lol.. dont forget to add:
'lose some money, try again'

:-)
 
What's important to a trader is not whether they fill, they virtually always do, but how long they take to fill. If you're going to fade them, then you need them to fill on your trading time schedule, not someone else's. That's why you should not fade all gaps. You must use your experience and discretion to selectively fade only those gaps which have a high probability of closing on your personal trading-time-scale.
 
Quote from piezoe:

What's important to a trader is not whether they fill, they virtually always do, but how long they take to fill. If you're going to fade them, then you need them to fill on your trading time schedule, not someone else's. That's why you should not fade all gaps. You must use your experience and discretion to selectively fade only those gaps which have a high probability of closing on your personal trading-time-scale.
More...


Yes this makes sense
thanks
 
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