Gaps
- Thread starter jgadefelth
- Start date
Still having a bad day. Good
The attached chart shows one way of looking at the open. I look at how the market acts during the first and last 30 min.
When the open overlaps the previous day's close, I call this a "split open". To me that means that the market is driven by technical formations, programs and developing news. My research shows that when the market has a "split open" the best way to play it is to wait for price to break out and move to test either the nearest resistance or support. At that point it is likely to reverse.
Today, the reversal was mild. I was not able to make money on it. Ordinarily I would be looking for a reversal at the 4th through 6th bars. If you look carefully at the chart you can see that the moves happens latter. This tells me that the underlying market is strong. Also tells me that we are likely to have a low volatility range bound day.
You can see that up to this point, price is moving between the pivots.
The attached chart shows one way of looking at the open. I look at how the market acts during the first and last 30 min.
When the open overlaps the previous day's close, I call this a "split open". To me that means that the market is driven by technical formations, programs and developing news. My research shows that when the market has a "split open" the best way to play it is to wait for price to break out and move to test either the nearest resistance or support. At that point it is likely to reverse.
Today, the reversal was mild. I was not able to make money on it. Ordinarily I would be looking for a reversal at the 4th through 6th bars. If you look carefully at the chart you can see that the moves happens latter. This tells me that the underlying market is strong. Also tells me that we are likely to have a low volatility range bound day.
You can see that up to this point, price is moving between the pivots.
LOL
Your analysis is GOOD and unfortunatly it agree's with mine and I'm hoping for a narrow range day to develope and set up a breakout and strong market (YM) into tomorrow and the rest of the week to possibly test 11,000 before the close of the month.
Of course everything is subject to change and this current 12 day consolidation is brutal, so it will take some signifigant structural activity to get us out of this enviroment.
For today it's convergence trading 101 for profits and the little "so called" opening gap we had this morning I faded into it to close it with CONFIDENCE as well.
So what is your point big shot!
Your analysis is GOOD and unfortunatly it agree's with mine and I'm hoping for a narrow range day to develope and set up a breakout and strong market (YM) into tomorrow and the rest of the week to possibly test 11,000 before the close of the month.
Of course everything is subject to change and this current 12 day consolidation is brutal, so it will take some signifigant structural activity to get us out of this enviroment.
For today it's convergence trading 101 for profits and the little "so called" opening gap we had this morning I faded into it to close it with CONFIDENCE as well.
So what is your point big shot!
Mr. Fox:
As you know, a big part of trading is adjusting to changing markets. Of course electronic markets have changed the nature of gap opens. That is why folks have to do their homework.
On the other hand, as I have mentioned, look at the commodities like grains, meats, metals, etc. Tradeable gaps exist in those markets on a regular basis.
Just my opinion, but I think trading gaps depends on knowing your market, and having seen how it acts when the different kinds of gaps occur. If you know the commodities markets, you may know the terms "split open", "open to the up", "first through the even" "Margin open" and so on. I didn't invent these terms. They are used to this day by locals who wait for these opening gaps and make money on them.
I hope you are having a good luck in today's market.
Lefty
As you know, a big part of trading is adjusting to changing markets. Of course electronic markets have changed the nature of gap opens. That is why folks have to do their homework.
On the other hand, as I have mentioned, look at the commodities like grains, meats, metals, etc. Tradeable gaps exist in those markets on a regular basis.
Just my opinion, but I think trading gaps depends on knowing your market, and having seen how it acts when the different kinds of gaps occur. If you know the commodities markets, you may know the terms "split open", "open to the up", "first through the even" "Margin open" and so on. I didn't invent these terms. They are used to this day by locals who wait for these opening gaps and make money on them.
I hope you are having a good luck in today's market.
Lefty
Of course you take it. What you do is take it and then take profits quickly. I'll post a chart. By the way I missed the trade.
Children let's stop all this sillyness you both are obviously knowledgable so put your peckers back in your pants and stop this pissing contest!
Lefty
I understand exactly what you mean and I agree.
I'm just referring to the fact that a lot has changed in the last 5 years electronically and I can see Samsons point but you are both right so stop fighting!
Lefty
I understand exactly what you mean and I agree.
I'm just referring to the fact that a lot has changed in the last 5 years electronically and I can see Samsons point but you are both right so stop fighting!
Ok then, the question was do you take the trade. The answer is yes, you take the trade, but because this is a low vol day, you take profits quickly in that same bar. Look at the chart and you can see what kind of movement to expect.
Today is a summer doldrums low vol day. Once you know that you change your position sizing and start to scalp. I would have taken the trade above my pivot and looking for 1.5 points and risking 3 ticks.
Today is a summer doldrums low vol day. Once you know that you change your position sizing and start to scalp. I would have taken the trade above my pivot and looking for 1.5 points and risking 3 ticks.
One option would have been to take profits on a part of your position, leaving part in in case it went your way. I would not have done that today.
Attached is my chart using 5 min bars.
Attached is my chart using 5 min bars.
jgadefelth,
If your interested in Futures...
True Gaps still exist.
However, they just don't appear as much as they did in the past.
In fact, once you learn when to pay attention to your regular trading hours (rth) charts and when to use your globex (includes overnight data) charts...
You'll know when globex (includes overnight data) is just noise and when it is not (contains valuable price action info).
Also, I really don't like those words true gaps because it implies someone is stuck in the past when they should have adapted to the change markets to continue using the same gap strategy today as they did in the past...
Especially when talking about globex.
As for 24hr markets like Forex...
Gaps are there...you just got to adapt and re-learn how to see them because they appear almost every trading day.
As for resources...tons of online material on how to trade gaps in stocks.
Use google search engine and type in the words Trading Gaps or similar.
http://www.google.com
You can also do the same here at ET search menu.
http://www.elitetrader.com/vb/search.php?s=
As for trading gaps in globex...there's online info on the topic but not as much in comparison to gap trading in stocks.
As for gap trading in 24hr markets like Forex...
Very little info on the topic...yet you'll have to dig deep into the search engines to find it because it is there.
Think outside the box
NihabaAshi