Trading The Opening Gap

T

Tall Mike

Hi guys,

Does anybody here use gap openings in their trading?

I was trying to do some research into developing a strategy around this. From what I can see so far, it looks to me that most gaps do close, however, I am stuck as far as trying to develop more parameters on how to put together a day trading strategy around this.

Do any more experienced traders have any advice on this?

Thank you in advance!
 
From my colleague Joe Easton:

I advise against this strategy. You are attempting to make a strategy based on assumption. The assumption being that most gaps close. The reason for gaps is legitimate and should not be expected to retrace. Personally I would favor a strategy that went the same direction as the gap instead of fading the strong price action on a pullback towards the open.
 
Cannon_Trading said:
From my colleague Joe Easton:

I advise against this strategy. You are attempting to make a strategy based on assumption. The assumption being that most gaps close. The reason for gaps is legitimate and should not be expected to retrace. Personally I would favor a strategy that went the same direction as the gap instead of fading the strong price action on a pullback towards the open.
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Agree, my top play is gap continuations like UVXY SDOW TZA winners today
24junb.jpg
 
Cannon_Trading said:
From my colleague Joe Easton:

I advise against this strategy. You are attempting to make a strategy based on assumption. The assumption being that most gaps close. The reason for gaps is legitimate and should not be expected to retrace. Personally I would favor a strategy that went the same direction as the gap instead of fading the strong price action on a pullback towards the open.
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So if anything, try and build a strategy around gap continuation?
 
Here’s example of trading gap with an edge. I have seen a few people on YouTube trading gaps, but didn’t see/understand an edge.


P.S. I have been posting SMB videos often lately, but it’s only because their content got much better, imho.
 
qlai said:
Here’s example of trading gap with an edge. I have seen a few people on YouTube trading gaps, but didn’t see/understand an edge.


P.S. I have been posting SMB videos often lately, but it’s only because their content got much better, imho.
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Thanks, ill def take a look at this.

I am struggling to really find a strategy that suits my personality and that has an edge. Most of the shit on youtube just talks about "patterns" but the reality in my opinion is unless somebody can show me a statistical edge with that strategy then it's useless. Anybody can cherry-pick and made a method look great on youtube.

I feel like I am the type of person that can really only focus on one thing at a time, and that is why I figured let me try something like the ES rather than individual stocks but I am just not even sure where I can even start testing something to see where there may be an edge in day-trading the ES.
 
Hi,

Have been trading gap on pre open for auction trading as long short intraday basket....

made several hundreds bucks per day not to say several thousands...

after 2015, the hft or big hands cames in and I lost my speed advantage.

the base idea is to build long short portfolio based on imbalance nyse...

the most important is to be able to be executed at open auction.

AND

to be long short... hedged....


The problem now, is that hft is able to send the order for auction at 9:29:59.990

my limit was 9:29:59.800 around bit Moore...

if you send an order at 10.05 and théoric price is 10.03, the hft will see that and will modify at 10.06....

then you miss the auction then you are not hedged then you cannot execute after market open cause it’s to wide...


Hope hft will go to jail until death for those tons of unfair advantages...


Best
 
This morning was a run away gap....sure, it may fill sooner or later the question is how much heat will you absorb.....
upload_2020-6-24_11-47-46.png
 
Tall Mike said:
Hi guys,

Does anybody here use gap openings in their trading?

I was trying to do some research into developing a strategy around this. From what I can see so far, it looks to me that most gaps do close, however, I am stuck as far as trying to develop more parameters on how to put together a day trading strategy around this.

Do any more experienced traders have any advice on this?

Thank you in advance!
More...
I agree with Cannon, these rooms claim to grade the gap: none have a track record

gapedgetrading.com
gapswingtrader.com
gorillagaps.com
lazygaptrader.com
 
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