i don't mean blindly buying becaue the futures are up,i mean buying an individual stock that gaps up a few points based on earnings or other significant news. RIMM today for example? if so,what is yout strategy,buy the open,wait for a pull back ect..?
Gaps seem to be a popular subject here on ET the last several days. I did a video on my approach to them about 2 years ago, and little has changed. If you'd like to watch it, you can find it at www.brandonfredrickson.com/gaps.html Brandon
If it's bull$hit news, SELL SELL SELL. Though RIMM's news is not B$. Right off the open it will sell off 3pts, then BUY BUY BUY.
Gaps nearly always produce a "gap play"... but there is no one way to play them. There are basically 3 different gap plays with a variation on each. Learn those, then you still have to "figure it out on the fly" as to what is correct for the current gap.
Agreed..typically, gaps up are my cue to get out the short stick_ and beat them again and again..(and sometimes it works..lol)
You will not get a single credible answer from these seat of the pants day scalpers. They will not give you anything. Please read BULKOWSKI'S " How to trade chart patterns" available on amazon. His books are your desk top references.
Brandon, Have you seen any effects from all the gray/black boxes? I would think these would make it more likely to fade the initial gap.
I learned my style of trading gaps from traderX's blog. He stopped posting 8 months ago but the blog is still up just start at the beginning and go through the whole blog you can learn a solid way to trade. There are usually at least 3 to 4 good gaps a day most days that you can use his style of trades on. I have 3 to 1 win to loss ratio using his techniques. Sempiternal