Trading GAPS

[CanOz]

Can anyone share thier experiences in trading GAPS? I'm very interested in this as a strategy. Nick Radge mentions it quite frequently and almost every chart where i have searched for GAPs has proved the theory on the GAPs being filled.

Very curious to hear your opinions and experiences.

 

[carmo]

http://www.stockcharts.com/education/ChartAnalysis/GapsandGapAnalysis.html

Hope this helps

 

[gsandral]

In my experience gaps can be a very sucessful way of trading as long as you avoid stocks that have dual listings as they have a high tendencey to be gappy(eg NWS), you also need to ensure your trading in the direction of the trend. CSL came onto my radar when it closed below its lonterm trend line on the 17/7, then traded above it and back down below it on the (4/8) (trend line anchered on the 17/5/05 and 28/10/05). CSL had an intra day gap (openned below previous days low) on the 10/8 and fill it with an up wick (high of the day) and then traded right past the open. I went short as price past the open (entry trigger was 49.20) with a stop one tick above the high (stop at 49.70). Well I wont bore you any more but as a newbie be aware you first job is to protect you capital. I start with Nick Ridge (http://www.reefcap.com/) by completing his course and becoming a member of "The Chartist". In my experience the journey with Nick represents the best education and live trading experience available.

Regards Grae
PS My worst fear is meeting Nick on the other side of a trade!

 

[WaySolid]

Can anyone share thier experiences in trading GAPS? I'm very interested in this as a strategy. Nick Radge mentions it quite frequently and almost every chart where i have searched for GAPs has proved the theory on the GAPs being filled.

Very curious to hear your opinions and experiences.

You might care to read Trader X http://traderx.blogspot.com/

Traders Magazine August 05 and Sep 05 also have an article on gaps in the US indices.

 

[alankew]

Does the gap around 12th Sep qualify as a gap for Zinifex and what are the consequences of this

Apologies if the image doesnt show,still learning

 

[tech/a]

Some analysis.
There are basically 3 types of gap.
Breakaway,Continuation,and exhaustion.

 

[alankew]

Tech thanks for the reply-just so i have it clear in my head,if things behave as expected the price will go lower

 

[tech/a]

Tech thanks for the reply-just so i have it clear in my head,if things behave as expected the price will go lower

Current chart analysis suggests that if the gap is not filled within 3 days then it is likely---not guarenteed to go lower.

Nothing is clear in technical analysis only likely.

Radge put it best when explaining Elliot.

I think it pretty well covers all analysis Technical or Fundamental

Prove---disprove---prove----disprove and so it goes on.