Comments on: How to Play Opening Gaps in the Indexes http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/ Helping traders overcome fears and emotions in trading Thu, 09 Feb 2012 14:53:15 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Rahul_bk http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-215704 Rahul_bk Thu, 07 Apr 2011 07:55:24 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-215704 Hey chuck can u elaborate on the method..??? Hey chuck can u elaborate on the method..???

]]> By: Kailash http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-29166 Kailash Mon, 11 Feb 2008 23:54:17 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-29166 The stock described above is TASR on Feb 12,2008. I shorted it at 11.53 and still holding for a multiday play. Kailash The stock described above is TASR on Feb 12,2008. I shorted it at 11.53 and still holding for a multiday play.

Kailash

]]> By: Kailash http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-29162 Kailash Mon, 11 Feb 2008 23:51:00 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-29162 I have a stock that gapped up almost 5 % and faded partially down to 2.5% and then reversed and made a new high. I just held my short thourgh the run up and it has now come down to above the gap open price. Can this action fill the gap in the next two days, though not today? I don't mind holding my short for a few days. Any help is appreciated. Thanks. I have a stock that gapped up almost 5 % and faded partially down to 2.5% and then reversed and made a new high. I just held my short thourgh the run up and it has now come down to above the gap open price. Can this action fill the gap in the next two days, though not today? I don’t mind holding my short for a few days. Any help is appreciated. Thanks.

]]> By: Corey Rosenbloom http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-4606 Corey Rosenbloom Tue, 11 Dec 2007 17:17:38 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-4606 Chuck, Thank you for your comment. Briefing.com also has a 'gap scan' as does StockCharts.com, and I can scan using simple parameters in a RadarScreen in TradeStation. Try comparing the range of today's (gapped) 15 minute bar or even 30 minute bar to those of the last 7 or more days (visually, or with a formula). If today's range has greatly exceeded prior day's opening bars, then odds favor continued trend (or price movement) in the direction of today's expansion in price. I typically avoid stocks that gap up or down more than 5%, as the momentum imbalance (or supply/demand imbalance) is SO great that there may not be a possibility of a gap fade or close. In those cases, it's usually best to go ahead and play in the direction of the gap. And sometimes gaps can't close within 30 minutes or an hour. Sometimes it takes a little longer than 10:00am. You may have to trade a little longer. Also, when a gap of less than 2% closes early, then odds favor playing in the direction of the gap (reversing the fade) to (at least) retest the gap open, which sets up a second trade. Chuck,

Thank you for your comment.

Briefing.com also has a ‘gap scan’ as does StockCharts.com, and I can scan using simple parameters in a RadarScreen in TradeStation.

Try comparing the range of today’s (gapped) 15 minute bar or even 30 minute bar to those of the last 7 or more days (visually, or with a formula). If today’s range has greatly exceeded prior day’s opening bars, then odds favor continued trend (or price movement) in the direction of today’s expansion in price.

I typically avoid stocks that gap up or down more than 5%, as the momentum imbalance (or supply/demand imbalance) is SO great that there may not be a possibility of a gap fade or close. In those cases, it’s usually best to go ahead and play in the direction of the gap.

And sometimes gaps can’t close within 30 minutes or an hour. Sometimes it takes a little longer than 10:00am. You may have to trade a little longer.

Also, when a gap of less than 2% closes early, then odds favor playing in the direction of the gap (reversing the fade) to (at least) retest the gap open, which sets up a second trade.

]]> By: chuck http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-4328 chuck Mon, 10 Dec 2007 23:23:55 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-4328 Update to the previous post. I always use a five minute chart. Chuck Update to the previous post. I always use a five minute chart.
Chuck

]]> By: chuck http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-4327 chuck Mon, 10 Dec 2007 23:20:17 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-4327 I am a hit-and-run trader. I have designed a formula that looks at premarket hours versus the previous day's low, high or close in percentage differences. Do not have any problem picking some great stocks. Let's say I have a 10% gap down from the previous day's low in premarket hours. Looking for some type of entry system for a short position after the market has opened up. Usually I am out of the market by 10 o'clock AM. Any help appreciated, Chuck I am a hit-and-run trader. I have designed a formula that looks at premarket hours versus the previous day’s low, high or close in percentage differences.

Do not have any problem picking some great stocks.

Let’s say I have a 10% gap down from the previous day’s low in premarket hours.
Looking for some type of entry system for a short position after the market has opened up.

Usually I am out of the market by 10 o’clock AM.

Any help appreciated, Chuck

]]> By: yo http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/comment-page-1/#comment-1870 yo Thu, 08 Nov 2007 16:51:08 +0000 http://blog.afraidtotrade.com/how-to-play-opening-gaps-in-the-indexes/#comment-1870 This was a very nice analysis. It's one of the first that daytraders have traditionally learned, and very valuable insight as to how specialists and market makers are likely to position themselves. This was a very nice analysis. It’s one of the first that daytraders have traditionally learned, and very valuable insight as to how specialists and market makers are likely to position themselves.

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