Gap trading techniques: Five-article set

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This article compilation focuses on trading gaps -- both "opening" gaps (that is, the move from one closing price to the next opening price) and gaps between the lows and highs of price bars. This set also includes two Trading System Lab articles that show detailed historical testing results of a gap-based system. This collection is 30% off the regular price. Price shown is the discounted price. Here's a summary of the Active Trader articles in this compilation: ARTICLE 1: "Morning reversal strategy" by Bryan C. Babcock and Arthur Agnelli (May 2003) Historical tests reveal the tendency of the major stock indices to revert to the previous day's closing price in the early minutes of the trading session. The following strategy takes its cue from that bit of market behavior. "The following intraday strategy, the Morning Gap Reversal (MGR), capitalizes on the major indices' tendency to retrace toward the prior day's close each morning. It has a high winning percentage tested in both bull and bear conditions - an important characteristic for any short-term strategy - and it is easy to execute…" ARTICLE 2: "Trading the overnight gap" by David Nassar (March 2001) With increasingly reactionary markets comes the higher risk of opening gaps. Learn how to spot the early warning signs and how to take advantage of them. "In today's markets, many stocks can have large supply-demand imbalances at the opening bell. Often, these imbalances result in what are known as gaps, when the opening price is higher or lower than the preceding close. News, in various forms, is generally the catalyst for gap openings. The most common type is macroeconomic news such as FOMC meetings, the release of economic indicators such as unemployment or the Consumer Price Index (CPI), or stock-specific news such as earnings surprises or analyst upgrades or downgrades…" ARTICLE 3: "Trading the opening gap" by John Carter (December 2004) Watching pre-market volume is a good way to determine whether to trade or fade the opening move. "Opening price gaps - the distance between the regular-session opening price and the previous day's closing price - are stomach-churning events when the market makes a big move against you, but they represent low-risk trade opportunities if you know which gaps are likely to be followed by predictable patterns…" ARTICLE 4: "Trading System Lab: Gap closer (stocks)" by Dion Kurczek (May 2003) "Most traders are familiar with the technical analysis axiom, 'All gaps are eventually closed.' This system test is designed to see if the axiom regarding closing gaps holds water..." (Tested on a portfolio of stocks.) ARTICLE 5: "Trading System Lab: Gap closer (futures)" by Dion Kurczek and Volker Knapp (May 2003) The gap-based system summarized above is here tested on a portfolio of futures markets. SPECIAL NOTE: You can also copy the programming code for the Gap Closer system -- and test the system online -- through the Strategy Testing feature of our Web site.


These four articles would normally cost a total of $22.50 if purchased individually. Save 30% and purchase them as a set for $15.75.

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