Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Alsi Crystal

Reply
saash
Super Contributor
They always close - the theory is on the statistics of WHEN they close. And the market direction that results on unclosed gaps. Those Oct gaps .... WILL be closed, Next recession, maybe?
0 Kudos
SimonPB
Valued Contributor
you cannot say they always close .. if only because there are some unclosed gaps ..
0 Kudos
richardw
Super Contributor
Then it has no value :) The Japanese gaps from the 90's still aren't closed. They may fall into the sea before it happens, at this rate.

I bring it up because I see newbies come on, ask around about a concept, and be given a curt absolute 'X always happens'. Someone snapped 'gaps close' at one poor oke, and while it's a nice mantra if it only closes a decade later it's not useful.
0 Kudos
SimonPB
Valued Contributor
well no, it means understand the value .. in other words find a way to give a probability of the close .. know when to enter and when to walk away .. even if they always closed that doesn't ensure profit .. for example being in a trade for the last year waiting for the gap from oct 08 to close .. in this case cost of carry would likely kill any profits ..
0 Kudos
richardw
Super Contributor
Agreed, but that's a more nuanced description, which is less likely to lose someone money.
0 Kudos