Gaps

Think about how price almost always returns to equilibrium. Question is.....what is equilibrium.

Yesterdays open. Yesterday's high or low. Yesterday's close. Pivot. Price is like water, it seeks balance in order to flow.
 
Pay attention to what the catalyst is.

If it's stock/sector specific then pay close attention to it and look for guidance. Yesterday with the semis is a perfect example.

PEACE and good-trading,
Vision Trader
 
vhen, i look to fade gaps, the more of 'em the better....take a look at WMT last few days...first day of BO 2/19 with above avg volume....2 more days of gaps without increasing volume
(price/volume divergence?)....today finishes as Inside day with narrow range 4....FWIW.....
 
There is an interesting article in the Jan 04 issue of SFO about
trading gaps by John Carter. He suggests trading gaps in ES/YM.
He also trades DIA futures, DIA and SPY. He does not advocate
trading gaps with individual components of these indexes and
also does not advocate trading gaps in the Nasdaq market.
As to why, you will have to get the mag and put your eyes to it... :D

What I found interesting is he uses a 1:1-1/2 RR ratio. At first it
sounded strange risking 96 points (YM) to get 64. But then he
says "The key with wider stops of course, is to only play setups
that have a greater than 80-percent chance of winning".

Of course he doesn't say how to accomplish that one... :)

He scales into gap trades according to how the market is reacting
to reports, ect. Sometimes he puts on a full position right away.

I just thought I'd put this in here. You have to read the whole
article to understand his methodology...

P.S. VisionTrader, you sound like you are taking sentences out of
a book or an article. If so, where are you taking this from? Or
have you been meditating on gaps lately?... :cool:
 



i read the article too, and i have been looking into gaps more lately. i think it offers some interesting opportunities...good thread so far

I just thought I'd put this in here. You have to read the whole
article to understand his methodology...

P.S. VisionTrader, you sound like you are taking sentences out of
a book or an article. If so, where are you taking this from? Or
have you been
return source
meditating on gaps lately?... :cool: [/B][/QUOTE]
 
Quote from VisionTrader:

Trade GAPS. Predict price direction with a high degree of accuracy.
More...

VisionTrader

This has been an excellent post!! Great read.

I really enjoyed the article from the CBOT.
I have always wanted to master that part of my trading, cuz I truly believe that is where you can maximize your gains.

Keep posting.

Regards,
Cuz
 
Quote from version77:


Of course he doesn't say how to accomplish that one... :)
More...

Actually, if you read the article, there are a few hints on how he
does his best to accomplish the 80% hit rate...
 
You must log in or register to reply here.
Back
Top