We all like to make easy money and the opening gap trade give us the opportunity to do just that.
Why the opening gap is a high probability trade
High trading volumes are often driven by news events and after hours trading statements by market leading companies thus creating an opening gap.
This is a high probability trade because statistically the gap is filled around 70% of the time during that trading day.
This means that when a gap down occurs, there is a 70% chance that buyers will step in and drive the price upwards to meet yesterdays closing price, and often beyond.
The same applies to a gap up. Sellers tend to predominate when the market opens and try and drive the price down to fill the gap.
This price action is called fading that gap and creates an excellent opportunity to make money with a high probability trading method.
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Why this is ideal for day trading
With a high probability of gap fill occurring during the trading session, the opening gap strategy is ideal for day traders. Often the gap will be filled within an hour or two of the start of the session so as long as the gap is significantly large, traders can make some good profits early in their day.
The opening gap makes an ideal automated day trading system [medianetrix com/trading-products/mngapautotrader/]. You can visit [medianetrix com] to learn more about how the opening gap strategy can be used in automated trading.
Article Source: EzineArticles com/expert/Chris_Ray/116908
Article Source: EzineArticles com/3088123
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