Gap Trading Tricks And Tips

Grey1

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I do a lot of gap trading and 8 out of 10 I make money . I think i have posted the results of my gap trades in the past.

Gap trading is a dangerous play for amateur and the danger only comes from the postion sizing . Trader donot know how to postion size them selves so in a worse case scenario they ar still within their risk tolerance.

lets say I am wrong and trader DO know how to adjust risk . What are the best techniques for gap trades?

Well 10 years ago I could have given you few basic stratgeis but the rules of the game has changed with the introduction of internet and direct access which has made the game even more efficient ( difficult ) .

saying that there are few foot prints one can see just before market closes to ( 5 min before market close ) to help him out to gap trade.

Rule1


if STOCK Z HAS MACCI ( 1 min ) > 100 and MACCI ( 3 min ) > 100 and MACCI ( 5 min ) > 100

and DOW ( Daily ) > 100

Then Short STOCK Z ( reverse for Long )

Rule 2

IF STOCK Z CLOSES NEAR HIGH OF THE DAY

THEN LONG STOCK Z JUST BEFORE CLOSE ( reverse for short )

Example GENZ yesterday
 
Grey1,

On the example of GENZ that gapped down $1.50 before going up or am I missing something?

Thx

Grey1 said:
I do a lot of gap trading and 8 out of 10 I make money . I think i have posted the results of my gap trades in the past.

Gap trading is a dangerous play for amateur and the danger only comes from the postion sizing . Trader donot know how to postion size them selves so in a worse case scenario they ar still within their risk tolerance.

lets say I am wrong and trader DO know how to adjust risk . What are the best techniques for gap trades?

Well 10 years ago I could have given you few basic stratgeis but the rules of the game has changed with the introduction of internet and direct access which has made the game even more efficient ( difficult ) .

saying that there are few foot prints one can see just before market closes to ( 5 min before market close ) to help him out to gap trade.

Rule1


if STOCK Z HAS MACCI ( 1 min ) > 100 and MACCI ( 3 min ) > 100 and MACCI ( 5 min ) > 100

and DOW ( Daily ) > 100

Then Short STOCK Z ( reverse for Long )

Rule 2

IF STOCK Z CLOSES NEAR HIGH OF THE DAY

THEN LONG STOCK Z JUST BEFORE CLOSE ( reverse for short )

Example GENZ yesterday
 
gulam said:
Grey1,

On the example of GENZ that gapped down $1.50 before going up or am I missing something?

Thx
Hi


It did not gap down $1.50. In fact when futures was down so much you could have sold a long GENZ at 2.28 pre market @ 63.10 and 1 min after open @ 63.04 showing even on such a weak day you would have made a win gap trade. ( previous close 62.74 you could have picked few for $62.70 )

if it was not because of the market then GENZ would have gapped much much higher

Remember when you gap trade you close at soon as market opens .. This is because previous day's traders have waited to see how the market opens next day to trade the stock . You sell it to them


grey1
 
Trader333 said:
This is Dow Daily Macci ?


Paul


Yes Daily DOW... if you have the support of intra DOW then that would be even better but this often does not happen

grey1
 
Grey1 said:
I do a lot of gap trading and 8 out of 10 I make money . I think i have posted the results of my gap trades in the past.

Gap trading is a dangerous play for amateur and the danger only comes from the postion sizing . Trader donot know how to postion size them selves so in a worse case scenario they ar still within their risk tolerance.

lets say I am wrong and trader DO know how to adjust risk . What are the best techniques for gap trades?

Well 10 years ago I could have given you few basic stratgeis but the rules of the game has changed with the introduction of internet and direct access which has made the game even more efficient ( difficult ) .

saying that there are few foot prints one can see just before market closes to ( 5 min before market close ) to help him out to gap trade.

Rule1


if STOCK Z HAS MACCI ( 1 min ) > 100 and MACCI ( 3 min ) > 100 and MACCI ( 5 min ) > 100

and DOW ( Daily ) > 100

Then Short STOCK Z ( reverse for Long )

Rule 2

IF STOCK Z CLOSES NEAR HIGH OF THE DAY

THEN LONG STOCK Z JUST BEFORE CLOSE ( reverse for short )

Example GENZ yesterday


Regarding Rule 2, any extra confirmations required on market strength or weakness ?

Thanks.
 
Grey1 said:
Yes Daily DOW... if you have the support of intra DOW then that would be even better but this often does not happen

grey1

Apologies, however, can you please explain.

Is the $indu the Daily Dow ?

What is the intra Dow ?
 
vegas said:
Regarding Rule 2, any extra confirmations required on market strength or weakness ?

Thanks.

The more confirmation the better. I leave that to you .. TA is about confirmation and exhaustion

grey1
 
vegas said:
Apologies, however, can you please explain.

Is the $indu the Daily Dow ?

What is the intra Dow ?

DAILY DOW IS MACCI BASED ON DAILY DATA
INTRA DOW IS MACCI BASE ON INTRA DATA like 1 min 3 min 5 min


is that clear sir ?
 
Grey1 said:
DAILY DOW IS MACCI BASED ON DAILY DATA
INTRA DOW IS MACCI BASE ON INTRA DATA like 1 min 3 min 5 min


is that clear sir ?


Very clear - thanks Grey1.
 
Hi Grey1,

Do you trade unfilled Gaps which happened within 3 days ago? GENZ, in your earlier example, has unfilled Gap Up open on 12th July @ 58. It traded above the 13th open for the following two days. If it were to come below the green line, would it be a good short?
 

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leovirgo said:
Hi Grey1,

Do you trade unfilled Gaps which happened within 3 days ago? GENZ, in your earlier example, has unfilled Gap Up open on 12th July @ 58. It traded above the 13th open for the following two days. If it were to come below the green line, would it be a good short?

Leo,

I would look at the Market condition at the time. A top down approach . I donot really like to short strong stocks even if they break support . So to answer your question . NO I would not.

Grey1
 
this is the screen from yesterday just before close

which one would you short

Grey1
 

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Grey1 said:
this is the screen from yesterday just before close

which one would you short

Grey1
Hi Grey1

CCI 1, 2 & 3 are 1min 3min and 5min, MACCIs ( 6 MA of 20 period CCI) ?
 
leovirgo said:
Hi Grey1

CCI 1, 2 & 3 are 1min 3min and 5min, MACCIs ( 6 MA of 20 period CCI) ?



Not sure what u ,mean but it is macci of 1,3 and 5 ( Standard CCI with its default settings )

Grey1
 
Grey1 said:
Rule1

if STOCK Z HAS MACCI ( 1 min ) > 100 and MACCI ( 3 min ) > 100 and MACCI ( 5 min ) > 100

and DOW ( Daily ) > 100

Then Short STOCK Z ( reverse for Long )

Grey1

Is it an overnight trade? And, the position is to be taken just before close? thanks.
 
leovirgo said:
Is it an overnight trade? And, the position is to be taken just before close? thanks.


yes it is

which stock would you long? This is the screen shot of the exhaustion engine before market open

Grey1
 

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which stock would you long? This is the screen shot of the exhaustion engine before market open

Grey1[/QUOTE]



Hi My Man

If i understand correctly then Id be going long AAPL.
 
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