On days when YM gapped down 50 pts or more, what are the chances of it closing +50 pts up for the day? From my experience, I bet it is greater than 75%, but it would be great if I could put a number on that. I don't have the data or a back testing program and any help would be great.
Unfortunately, your experience does not reflect the actual data. I have tested many different Gap strategies and none are consistent. Not to say there aren't profitable ways to trade gaps. I just have not found a mechanical approach. fan27
are you kidding me? London bombings: Gapped down -70 pts, went up +140 pts. Hurricane: Gapped down around -60 pts, went up +110 pts. I found a way to regularly lose money when it gaps down. All you have to do is just short it. I know there has to a different way of doing it.
Maybe there is a way to differentiate between gap downs based on news, and the ones without any news?