Registered User
Joined: 3/25/2005
Posts: 864
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Does anyone know about the significance of a stock that gaps up or Gaps Down?
Is this a guarantee of automatic short-term day trade profits or what?
i.e. if a stock gaps up at the open, can I buy it for immediate gain? Likewise, if a stock gaps down at the open, can I short it for immediate gain or what?
Does anyone know if this is a given?
Please, explain, if you have knowledge in this area. Thanks.
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Registered User
Joined: 11/26/2004
Posts: 68
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An easy way to check for yourself is to create a simple per cent true indicator and have a list of stocks sorted. You can look thru them and see if their is any profitable pattern. My research would suggest there is no pattern that will consistently allow profit.
O<L1 or O>H1
That says that the open of today's bar is less than the low of yesterday's bar or the open of today's bar is greater than the high of yesterday's bar. That will give you all kinds of hits.
To make your formula:
Open Telechart 2005
Click on Chart template on the menu bar
Click on Add Indicator
Click on Per Cent True
Add the formula above and close window
Right click on the new formula
Choose Sortby
Click on Sort
When the sort is finished hit the HOME button on your keyboard and evaluate what you see.
One variation on the above formula might be be require the gap to be a certain value above or below yesterday's action
O>H*1.01 or O<L*.99
That formula requires the price to gap by a minimum of 1%
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Registered User
Joined: 3/25/2005
Posts: 864
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Thanks Spab!
I will check it out!
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