surely this cant be legal?

[#1]

someday they are gonna ban this practice....gap closes are just criminal!

[#2]

Why are you complaining?

[#3]

Ok Chartist, gap closed, what are we waiting for now to go long? or am I wrong?

[#4]

Why the sudden rally?

[#5]

Chartist, what is the theory behind gaps closing? And what time frames are you talking about?

[#6]

timeframes...we are talking minute rather than hours..yesterday was a few min...this morning a bit longer...but I have seen 200pts in matter of seconds...(see the gap close video).....there are afew theories...one is a self fulfilling prophecy...everyone looking at the same gap expecting the same thing and acting in unison...(thats why I say u gotta believe...its partly a joke but partly illustrates the phenomenon)...so heres how I think it works...so for argument sake u are long overnight...u check your position in the morning...Wow...bloody marvelous...U were long and u are in profit...for every one that was long there is also someone who is about to take the toaster to the bathroom with him...before he does that he buys (covers his short) ...he the buggers off and attempts a parasuicide...so now the market rallies a little and mr Smarty pants long thinks this is bloody marvelous...maybe he even buys more...but people like me have seen this before so we decide to lock in some profits or we sell in anticipation of the gap close...Mr smarty pants now sees his nice easy overnight profit evaporate so he also sells ...usually as he starts losing money (which equates with the original open price)...so we drift lower....meanwhile the parasuicide was just that...luckily no paramedics were needed to be called ...so he gets back to his screen...what the ^%$$*(&!..I just sold a while ago and now we are moving lower!! thats not fair...Ill have to sell as well maybe I can recover some of my ZZZZ losses....hope it helps....

[JohnnyCash]

C, Have to say, Many thanks for the GAP-strategy, its really added some decent options to my trading. See how the first try to close the gap coincided with a real contraction of the bollingers. It just added to the move, and the move was completely against all other indicators and if not for the gap u would never have gone long around there. Yet I did and am done for the day barring something interesting materialising....

[#8]

Thanks Chartist, one last thing. The gap we had on the 17th, you said if we were to short it, we would wait for a trade below opening price, ie gap would already be closed and then we would go ahead and short, let the market tell us where it is going. So did i understand correctly that we wait for the gap to either close and then short or break a point and then go long, or do we trade while the gap is still open and hope that it closes? Thanks

[#9]

great...nice when u can be done and dusted in an hour.....entered trade at 10.30 and out by 11.30..u know some people make a good living just off trading gaps? glad we have another believer....maybe u will even become a disciple like John...at least u seem easier to convert....

[#10]

there was no gap on 17th...

[#11]

My bad, 16th....

[#12]

Thanks Chartist, this helps alot.

[#13]

quite simply there was no signal to enter the gap on the 16th...we had a closing tick below the open of 18800..on the 19th we gapped up...we traded below the open of 19100...u go short....later we traded below the open of 16th u go short...closed two gaps in one day...very very simple....prob is u gotta wait for the signal...cause otherwise....nuff said

[#14]

that should read we had NO closing tick...

[Electrox]

yes thx chartist for that explanation. So in reverse eg. Today, we gapped down but did trade above yesterdays close. So how does one analize it this way. Do you wait for closer to the end of day to get a signal? thx

[#16]

No No...we gapped down and we traded above todays close...that was your signal...not a huge gap but an obvious one

[Amar]

You do mean above todays open...not close

[#18]

yes..apologies...being distracted by the poolboy here...gorgeous day in CT,,,

[Electrox]

Yea im sure he means today's open. Ok i understand that part.What about the fact that we traded above yesterdays close. Does that ahve any relevance for gap trading?

[#20]

no...