Trading the gap at open? Who does this?

Interesting post. He seems to jump right in at the open, but I think you can wait and play with the opening range. One strategy is to pull a fibonacci extension from the first 30 minute low to the first 30 minute high. It works surprisingly well on gap down or gap up stocks due to the increased volatility. I have used this approach for equities for about 6 months and so far I am liking it, but still making a few adjustments. I have recently been applying it FOREX using the New York market open.

If you use ThinkOrSwim, then let me know. I can send you a script that has been floating around to automatically plot the fib extension.

This blog by "Trader X" shows essentially what I described above. Just look under the "Key Posts." Here's the link:

http://traderx.blogspot.com/

I know this isn't exactly what you were asking, but I think you may find it worth while.
 
For the last 2 years or so, this type of action is more common because the idiots have no fear. Any dip = always buy. The fed is giving out free money and pumping the markets by removing the risk factor.

As a trader, it is smart to take advantage of this but just realize that its likely not a long term strategy.

This might work going forward, but know that historically that is not common. The markets are more likely to revert back to random action on gaps vs a bias like this.
 
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