Handling Gaps that go Against you -- trading strategies?

[Raheel Shaikh]

How do you manage bad gaps?

I will start scaling out premkt if it trends down.

Usually though, they chop around, so I stay clear til the opening bell. I stop out after 9:30 if it drops .50 and re-enter if it bounces.

Gaps often fill, so I don't just instantly stop out.

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.

 

[KCalhoun]

Traded em correctly today

 

[KCalhoun]

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Depends on my schedule\ plan;
took some smaller profits in SPXS, spxu, today.
2.5% gap loss in sdow, but lets see what close price is................................................................................................KC, your good on super diversification in inverse ETFs;i usually dont do more than5 different inverse ETFs@ a time

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

 

[murray t turtle]

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

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I'm wanting to buy some UDOW, this SEPT;
but SDOW is looking better aboVe 50dma\SEPT.

 

[MoneyMagnet]

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.

 

[easymon1]

Three Gap Play
Gold Minahs AU

 

[murray t turtle]

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.

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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.