A low strategy in unstable markets? Gap trade. It works like this:
What is a difference? Suddenly the price increases between tomorrow and today’s open.
Why does it work? Gap is often filled – the meaning value goes back to previous levels.
How to act:
- Spot a gap in the market open.
- Wait 15-30 minutes. Don’t jump in a hurry.
- If the price starts to reverse in the difference, you can set the short (for up intervals) or long (for during intervals).
- Set a tight stop above/below the gap.
- Get out near the gap.
It works very well in the revenue season or after a big news message. Just make sure you don’t chase fake.