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Monday
Nov262012

Mind the Gap! part 1

Trading Gaps can be the bane of an overnight or swing trader, but Gaps are a big part of the stock market.   There are many strategies that try to take advantage of gaps and gap fills. 
Whole sections of books have been devoted to gap trading. With a quick search I found two books that were entirely devoted to trading the gap.  
 
Whether you want to play the gap or defend against gaps in your strategy, first we need to tell Prodigio that we had a gap.  To do that we'll need to build a Wiztool to find them.

 

Definition of 'Gap' 

 
According to Investopidia, a Gap is a break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between. Gaps can be created by factors such as regular buying or selling pressure, earnings announcements, a change in an analyst's outlook or any other type of news release. 

Read more at Investopidia 
 
In order to test for a gap we need to find yesterdays closing price and compare it to the open of todays market.
 
  
Subscribers can continue to page 2 -->>
  
(Non-subcribers can purchase the PDF with the WizTools)  
 
 
Other books that came up in my search for Gap Trading.

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