Thursday, December 07, 2006

Gap trading

Article with data on gaps at Trading Markets (link). The bottom line is to trade opposite the move, eg short a gap up, buy a gap down. Keep in mind that gap days are often extremely volatile and prices can move quickly and fills can be hard to get at the price a trader wants.

I often prefer to wait until the dust settles and calmly establish my long or short a day or more later.

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