On "gaps"

Quote from neophyte321:

on intraday timeframes, I'd imagine you trade in the direction of the gaps..no ? Which timeframe do you find most reliable?
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I only trade equities, NASDAQ, mostly. It all depends. I use the first 10 minute bar chart from the opening bell for my low/high. Then base my entry off that.
 
Quote from tradewiz50:

Depends on what time frame your looking at? Intraday gap fills are in the range of 20% that actually get filled. The longer the frame then the better the odds of a fill.

Don't forget intraday gaps can make you a lot of money!!!

I've traded the gaps intraday for over 6 years with success.

It all depends on your system that you use.
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How do you define an intraday gap and on what type of bars?
 
"Interday gaps" may trap buyers or sellers setting up easy squeezes.

Gap borders OHLC define stops and targets for traders.

Lots of gaposis lately as the enclosed chart illustrates
 

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Quote from duard:

"Interday gaps" may trap buyers or sellers setting up easy squeezes.

Gap borders OHLC define stops and targets for traders.

Lots of gaposis lately as the enclosed chart illustrates
More...

Wonder if you did some more analysis, you'd see a correlation between unfilled gaps and the tendency of gaps to fill after a number of them unfilled.
 
I have noticed the last two days on the ES 15 minutes chart one could have scalped 3-4 ticks after the first 15 minute bar completed. Being the lazy ass that I am, I'm curious if anyone has backtested something similar, or are you going to make me do my own homework?
Further, would you say fading the opening gap works better for gap up, or gap down? I'm talking intra day scalping, nothing more. Thanks in advance.
 
Quote from CaptainObvious:


Further, would you say fading the opening gap works better for gap up, or gap down?
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Gap down.

Good gap research is great but you end up with too many catagories.


Gap up, down
Gap up, down and plus/minus 2, 4, 6, 8 ,10, 10+ points
Gap up, down the day after a greater than 1% move
Gap up, down after a full moon
etc.


What I believe becomes apparent is certain "market truths" which after a time you can reasonably rely upon to pull the trigger on a trade which over the long run will yield profit. It also causes you to study the market which is where hopefully you'll come to some understanding. I'm still working on the "understanding part"
 
Go to stockfetcher.com (no spam) and search "fade the gap statistics filter". Run the filter daily. Great tool. Many thought processes in the forums regarding the filter. Thanks ATH for this one......works well to zero in on high probability gappers.
 
For stocks you can gain some guidance for the news that is driven it. Also look to see if it traded premarket and or aftermarket the prior day. Those that didn't trade before the exchange open with news generally go further then expected.

Also check out the stocks competitors. See what they are doing. If all of them are being bought then be patience and consider waiting to eod or the next day to entry to fade.

These stocks gap and move for a reason. Spend time learning how news effects the gaps.


Keep a record of gaps and the news, if any that caused it. Gaps with no news are the best to fade.

John
 
Quote from cashonly:

How do you define an intraday gap and on what type of bars?
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A gap that opens higher/lower than it's previous day closing price.

1 and 10 minute Japanese candlestick.
 
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