Trading opening gaps - is it a viable strategy?

T

trendisyourfriend

Hi everyone, I've noticed that the inverse ETFS like the SPXU and SQQQ tend to gap up at the opening bell during the market correction a few times a week. I notice they gap up much more than they gap down (during the correction).

Have any of you bought the ETF the day before just before closing bell and then held it overnight with the hopes that the ETF will gap up the next morning for a quick profit?

Overnight risk is something to be carefully considered with this strategy.

Is this a losing strategy?

Thanks
 
trendisyourfriend said:
Hi everyone, I've noticed that the inverse ETFS like the SPXU and SQQQ tend to gap up at the opening bell during the market correction a few times a week. I notice they gap up much more than they gap down (during the correction).

Have any of you bought the ETF the day before just before closing bell and then held it overnight with the hopes that the ETF will gap up the next morning for a quick profit?

Overnight risk is something to be carefully considered with this strategy.

Is this a losing strategy?

Thanks
More...
%%
SURE, many times \but for sure NOT all the time
THEY spxu,sqqq,sh,,,,,]do that for the same reason;
that SPXL /UPRO/ TQQQ tend to gap in bull-market [above 200dma] = trend can be a friend:caution::caution: ITS a losing plan /win plan some of the time but it varies. Wisdom is profitable to direct= nota prediction.....................................................................................................
 
trendisyourfriend said:
Hi everyone, I've noticed that the inverse ETFS like the SPXU and SQQQ tend to gap up at the opening bell during the market correction a few times a week. I notice they gap up much more than they gap down (during the correction).

Have any of you bought the ETF the day before just before closing bell and then held it overnight with the hopes that the ETF will gap up the next morning for a quick profit?

Overnight risk is something to be carefully considered with this strategy.

Is this a losing strategy?

Thanks
More...
I doubt this is a profitable strategy in a long run. What you saw possibly was a bias or short term phenomena related to current bear market. You would get different opinion if you check it for the last year
 
IMO.

3 types of opening gaps.
gap and go
gap, fade and go
gap, fill gap

Today in index futures, the golden hours gap play was gap, fade, go.
Will todays gap fill today? I don't care... my job is to extract money long and short.
 
Yesterday 1st half of the day wasn't looking like eMini gap would fill with cumulative tick (2nd from bottom) dropping. Then around the 1 o'clock hour cumulative tick stopped going down and reversed hard during 2nd half of trading day to complete gap fill.

Today straight away cumulative tick took off. Gap and Go.
! Tick1.png
! Tick2.png
! Tick3.png
 
There are a lot of factors that cause gaps. I worked several strategies. They did OK, but I found that it is not as consistent or frequent as needed to keep doing.

Case in point, is when does the movement occur that results in the gap? Asia open, Europe open? Although the open times are consistent, the reactions to the US open-close are not. It is like a clock with hands, but the dial on occasion is moving too.
 
trendisyourfriend said:
Hi everyone, I've noticed that the inverse ETFS like the SPXU and SQQQ tend to gap up at the opening bell during the market correction a few times a week. I notice they gap up much more than they gap down (during the correction).

Have any of you bought the ETF the day before just before closing bell and then held it overnight with the hopes that the ETF will gap up the next morning for a quick profit?

Overnight risk is something to be carefully considered with this strategy.

Is this a losing strategy?

Thanks
More...
Do you ever trade setups on 1 to 5minute charts?
 
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