Thursday, May 5, 2011

Gaps: Trading gaps.

FGEN: Gap acting as support. Gap is not filled.





PNX: Fade the gap. Gap filled.



MPI: Filling the gap.



SMC: Gap down. Fade the gap(?)



This post only shows how gaps act. Some doesn't get filled and act as support(FGEN). Some are filled a few weeks after building a base(PNX) while some gaps don't get filled outright. Sometimes, it takes a gap a really long time to get filled(MPI).

That being said, no one can really say how the gap in SMC would act. One thing is certain though, act when the opportunity says so. Not because a blogger says so or forum members say so but when your trading system says so.

Theory says that all gaps are filled, sooner or later. They say it's nature's way of things. :))
Once the gap is filled, price action resumes the direction of the gap.


*So if FGEN trades beyond 21 and the entire market crashes back, look to buy at 10.40-10.70 :)) (Just kidding).

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