Gap Stats!

[asylum]

Just wondering if any forumite keep stats on gap close, i have a couple of questions and if any forumite can help would be appreciated,1. Is it worth it keeping records of gap closes? What % of gaps close on the same day, next day and so on? thanks

[Mar-11]

it appears as if a gap up closes more often than a gap down.....anyone have any stats to confirm/deny this?

[earlyret]

I have started keeping some kind of stats on gap closes. Only for same day closes though. Unfortunately I have missed a few days - Don't you hate when work gets in the way!! Will try post something soon, but it seems that the gap has closed the same day more often than not in the last few weeks.

[john_1]

I did some serrious study of this about 3 years ago, at the time 90% of all gaps try close on the same day (50 points below the open price)70% of all gaps close the distance between the previous days High or low and the open gap.( it may not get all the way to the exact close price but will reach the previous days price action trading range.) and 59% of all gaps closed on the same day...this was a back dated study over 5 years..go to www.dwt/education...there you will find all chartist trading videos after all he is the master of this kind of trade

[asylum]

thanks john quite imteresting, almost 60% close on the same day now theres something to think about.

[john_1]

The first thing...Is that it does not make sense to trade against a gap..in the very short term. Secondly..when a gap does not close on the same day but the market pulls back it will defend the gap hard but if it does breach the gap it is a absolute no brainer trade, as the gap is a point in time when there is no price action support..so trade failing gaps that have taken days to close Hard....Lastly it is my experience that first atttempts at close are often repelled so its better to be a little cautious.. either take bigger positions well inside the gap for 50 points..or be very careful with how much room to give the trade when it moves against you..they happen often enough to be cautious and wait for gaps with good risk/reward set ups.

[earlyret]

thanx for the info. interesting

[#8]

John's study is absolutely spot on - my own studies concur. First attempt at closing the gap often fails, second attempt more successful. i personally am not interested in anything less than 150 points to make a gap play - 200pts becomes interesting

[earlyret]

nice gap today??