DAY TRADING GAP & GO WHAT TO LOOK FOR
The principal of a Gap & GO is taking advantage of a big overnight move that no one expected going against the present trend. People are in fear as they are seeing their swing profits going down the drain and automatic stop losses are about to get triggered at open
For this example, i did a short Gap & GO trade. (for long Gap & GO you look for opposit)
On the Daily what do you look for (premarket time before open) :
- prior day candle to be in the opposite direction of the gap
- previous week trend (few previous days) opposite direction of the Gap
- On your scanner, set up filters to have at leat 3% or more gaps if you need it (me i just eye ball my favorite tickers on the daily)
On the 30 min or 15 min chart what do you look for (premarket time before open) :
- look for prior pivots where people have their stops, if the gap is below multiple pivots you have more chances that it will take out many swing traders from the smart money guys who went in early to the chasers
- check where are the Daily SMAs 20, 50, 200 if you break some Sma that is even better
- check the volume on the previous days prior to gap, if you see some good volume bars even better as more people trapped
- look on the screener for nice premarket volume at least 50K vol 30 min before the market open or you can tell just by looking at the premarket intraday it has to look clean with a nice continuation of candles
like everything in Trading, it works till it doesn't so watch out on your entries and respect your rules
don't go in YOLO because it is a GAP and GO
Have a good one!!!
For this example, i did a short Gap & GO trade. (for long Gap & GO you look for opposit)
On the Daily what do you look for (premarket time before open) :
- prior day candle to be in the opposite direction of the gap
- previous week trend (few previous days) opposite direction of the Gap
- On your scanner, set up filters to have at leat 3% or more gaps if you need it (me i just eye ball my favorite tickers on the daily)
On the 30 min or 15 min chart what do you look for (premarket time before open) :
- look for prior pivots where people have their stops, if the gap is below multiple pivots you have more chances that it will take out many swing traders from the smart money guys who went in early to the chasers
- check where are the Daily SMAs 20, 50, 200 if you break some Sma that is even better
- check the volume on the previous days prior to gap, if you see some good volume bars even better as more people trapped
- look on the screener for nice premarket volume at least 50K vol 30 min before the market open or you can tell just by looking at the premarket intraday it has to look clean with a nice continuation of candles
like everything in Trading, it works till it doesn't so watch out on your entries and respect your rules
don't go in YOLO because it is a GAP and GO
Have a good one!!!
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