Hi All, We havnt had much on this topic for a while and to be honest I didnt pay too much attention the first time around. Last night the ALSI closed round 26290. This am it opened at 26430 a gap of over 100 poins. How does the gap strategy work. People say that there is a high probibility that gaps close. So my question to you all is how do you play that? If we are expecting the index to return to the 26290 level what is the strategy? - Paul C
Hozit, Firstly the market tends to move through phases of GAp closes and un-closed gaps.. so one need to review how the market is behaving. The basic Idea is that you go short (on your signal) against an openning gap and ride till its closed or nearly closed then you look to go long once its closed.you do the opp for a gap down.. not sure what the current stats are but it used to work best when gap is against the trend..so gap downs in a rising market go long etc.