Interested to see what percentage of us are doing this (besides me), regardless of the instrument ... Thanks.
opening gap of what and how do you trade it? fade,participate??? i guess i do..sometimes..i can even predict the direction of major indices or magnitude of the move right after open..sometimes..
OK, fair questions; apologies for not having been clearer... By "Trading the Opening Gap" I guess I meant placing a fading trade in a given instrument at session open, based principally on the fact that there is a "gap" a) between the instrument's closing price in the last session and b) the price at which it opened in the current session. I guess the key point is that you are using the fact that there is this "gap" as principal trigger for your trade (although there might be other "filters", too).
if the opening gap does not close immediately upon entry and thereafter fit like a glove, I'll pull my capital out.
http://www.thegapguy.com/ Scott Andrews talks about gap trading extensively already, get his ebook from internet file sharing if you could find it. http://www.gapedgetrading.com/ Troy Peterson runs a chatroom where he trades gaps exclusively during opening hours. many of us trade gaps (besides other strategies) and not all gaps are rated the same. some u can fade, some u ride the continuation.
Do you mean opg orders? I used to do them based on morning indications but that racket has almost completly dried up. I still every so often catch a gapper but there is not enough volatility of uncertainity for this stragety to work on a large scale. Typically when the market goes down gaps seem to work better and occur more frequently. Every so many years this stragety works great for a few months. Keep it in your playbook, stay in the game long enough, and be perceptive for when they start working again, because eventually they will. I know some guys who were having million dollar months just from their opg orders during the fall of 08.
Gaps are good opportunities and "gap days" have the potential for significant day gains. Therefore, we should be trading most of them. However, there are 3 primary types of gaps with at least one significant variation on each. That is, getting the "correct gap play" on the first attempt has only about 1:6 odds of being deciphered in real time. Just as in other trades, "which gap play to play" is an educated guess.