Gap Up Long
Before You Start:
Remember: A larger gap has less of a chance of filling completely, and
I think these can be the toughest to trade.
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| 1. |
Wait 10 - 15 minutes after the
open, and watch for pullbacks. |
| 2. |
If there isn’t a pullback,
then use the 1st bar/candle low as your stop. |
| 3. |
If that is too far for your money
management rules, use a money stop. |
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Click the image for a larger view. |
Look
at This Example Again:
In this Gap Up Long, the ES never tested the low or the opening price. Because
of that, the ES was net positive all day long. |
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Gap Down Long
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| 1. |
After waiting 10 - 15 minutes to
let overnight orders get filled, take the entry on a price cross back
above the opening price with TICK confirmation. |
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Click the image for a larger view. |
Look at This Example Again:
In this example, the ES gapped down at the open.
It then tested a pivot line (S1) and retraced back to the opening price.
The entry was taken above the trigger bar when it was confirmed by TICK
strength. The stop was 2 points, for a good reward/risk potential.
As you can see, the initial entry was stopped out.
But, patience and persistence paid off and, after the price tested S1
and held again, a 2nd entry was taken and paid off nicely. Additional
positions could have been taken on the 5/15 MA cross and on the price
cross above the prior session’s close. |
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Next
(Strategy for Shorting ) » |
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Disclaimer: The strategies
are believed to be accurately presented. However, they are not guaranteed
as to accuracy or completeness. Nor is it guaranteed that using them will
result in profits or that they will not result in losses. Past performance
is not a guarantee of future results. Only risk capital should be invested
in the market. All investments and trades carry risk, and all trading decisions
of an individual remain the responsibility of that individual.
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