Hi Bronks, not that I'm making' it big trading, but good size gap ups or downs are one of my favorites. Wait 30 mins (some like 60min's, though some like only 15 ??) then enter if it makes a new high/low in the direction of the gap. As for a stop , this isn't nice I use the low or high of the day. But I guess you could use a set amount. I realize this doesn't sound like rocket science, but then that's why I have hope I'll make it as a trader All the best, Andy
If it sounds easy to you I have done you a disservice. It is simple... yes... but anything other than easy. I have never been able to MOC on a big gap day. I usually out smart the market and enter a short right before it continues upward. And I know better! ~EC
Hey Bronks I have a simple question for you.. Looking at the Snagit chart.. I see you are using a 5 min chart to assist you in your trading. What is the point of using this chart if your avg profits and losses are ranging to less than 5 points. The range on a 5 min bar is nearly 5 points and your avg. hold time is well under 5 min. Looks like a bunch of noise to me. ---MIKE
Mike-- I actually use a 3 min. I just used the 5 min. so I could fit it all in one frame for illustration purposes.
Just an aside, I thought the general rule was that gaps got filled. I kept going short today inspite of everything being green and didn't lose much money but it was a wasted trading day. Glad you pulled a profit out, Bronks, because apparently you were working with the same expectation (and I know expectation is a lousy thing to bring to the market).
I think the "rule" is that small gaps are filled... gaps of 20 ES points or so indicate a trend day is likely. Or so I've read. ~EC
The day after a narrow range contraction day has a higher probability of becoming a trend day, gaps outside of a narrow range day have a very high probability of developing into a trend day... PEACE and good trading, Publias
Publias, Commisso, whoever..., While trend days normally follow and require an immediately prior narrow-range day, that doesn't mean that the day following a narrow-range day is likely to be a trend day. If you look at the daily chart of the QQQ for the past few months you'll see plenty of narrow-range days that were not followed by trend days. As to other comments since Bronks posted his results I respectfully disagree with a few notions regarding Monday's range. While the DJ-30 was certainly a vaunted Trend Day, the NQ/NDX/QQQ was anything but. First off, the Q's gapped 2.6%, a nice gap to be sure, but nothing spectacular, certainly nothing indicating a "sure" trend day. Very often gaps in that range tend to completely fill or mostly fill, and on the initial pullback (especially since the NDX had showed relative weakness most of last week) there was a very good argument for going short. I realize after-the-fact one obviously shouldn't have gone short, but we're talking realtime decisions here, no 20-20 hindsight. Another characteristic of a "long" trend day is that the open is fairly close to the lod and the close is fairly close to the hod. In the QQQ neither was the case (although the NDX came closer). In fact the entire range of the day in the QQQ's was only 1.04 pts which is even less than it's average daily range, same for the NDX.
Magna, Thanks for keeping it real. In hindsight if we would of bought all the dips today.. we would of made a killing. But in realtime is a different story. In realtime how do we know this dip is a buying opportunity.. or really the start of a downtrend?? Especially given the fact that a discretionary chart reader usually has minutes to make his final assessment!! Traders lets keep this game real! don't berate yourself after looking back at a day like today and say.. " I wish I would of done XYZ"... thats foolish thinking. If it was that easy we would be sipping Martini's in the French Riviera placing our etrades with our little laptops, while getting a massage by Claudia or make that Pierre (for the ladies only) ---MIKE
Magna, First why you gotta blow up my spot with the Commisso thing? Upon reflection I suppose I did not make myself clear... By "contraction" I meant an inside contracting bar such as we had on Friday. There is a higher probability of an IDNR-7 or even an IDNR-4 resulting in a trend day and expansion in range and a very high probability when the "indecision" day is extreme and occurring at a pivotal juncture as it was on Friday. Also keep in mind regarding the lack of a "long" day in the qqq and NDX that Globex trades all night and the move yesterday actually started pre 3am... PEACE and good trading to you Magna, Publias