When markets open gapped up higher than yesterdays settlement, and higher than yesterdays high, and the morning high is not higher than +1.0 Dev, the gap should fill back down to yesterdays settlement …most of the time unless there is a major support level inbetween. I check this by plotting major support and resistance found over a weeks time frame. When the gap fills price down to previous day settlement, it normally goes back up to some major resistance point…when it drops again what percentage of the time does it drop below the morning low? Or does the percentages indicate price will continue up past the morning high?
Gap Fill Continuation
darrell
#2
I usually don’t factor in support and resistance when doing gaps as they have been broken.
I have never done this strategy of reversals of gap fills breaking highs lows etc… so i don’t have any %'s on it. I’m sure you could pull them. Even with that would probably not do it. I do it in a sense of using the APEX strategy but not simply trying to call a reversal.
I like to keep it simple. After the gap if I still want to trade for the day after taking profits so fast. I would be playing the APEX strategy. When it goes back up i would be looking either to go long on a long APEX or short on a short APEX.