zagged when it should have zigged

Quote from mgkrebs:

Bought the high, got head handed to me. Got short on 1.5x the size of first trade, made it all back. Up net $1 on the day. Let the weekend begin.
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Same here....except it was (SPY) , thankfully I was in very small because that 200d MA was staring me in the face.

Hopefully the market will just chop sideways all day. (i say this because usually what ever I wish for, the opposite happens) :)

Happy Trading.
TGIF
 
Quote from indahook:

I am amazed you could fade a gap open like this. Compared with the gap open on 4/2, which doesn't close, could you tell the difference between them? Thanks.
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The gap on 4/2 was more than 2%. They close only 36% of the time on the same day. Therefore, the probabilities are not in your favor.

--Db
 
You go with the odds. 71% of these gaps (at least on the Naz) fill. So, the odds are toward a fill.
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I have noticed that most gaps on the S&P are filled with 5 trading days. I wonder if anybody has done a study, but I'd be shocked if more than 10% of gaps remained open after a week of trading.
 
If gap fading were the only strategy one uses, it could be profitable because of the statistics on the side of the closing of the gap.

Also, the nature of the trade is that the risk to reward ratio would be favorable. :D
 
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