USING GAP DATA

ES Gaps

Typical low gap. You know the market will come back

Scalping a short above the green line would work very well.

Go long on a predicatable retracement.

Go short above the green line.

Another beautiful opportunity to scalp a few points going short

Go long on the dips for a profitable long trade

The gap warns the trader that a short trade could get stopped out.

Another short scalping opportunity

Another long scalping opportunity

Go long on the dip

Notice the green line. Short this above the green line. Its coming back!

Continuation of the previous screen shot. As predicted the market retraces to fill the gap and the short trade wins.

Long trades win to fill the gap

Short trades are very effective when the gap is below the market.

Trading The Gap Can Be Very Effective Using A Precise Entry

Vix Gaps

Vix gaps are equally predictable. We plot gaps on a 50 tick bar chart.

This shows a 5 week period where gaps started, where they ended and where they still exist.

The data can be extremely useful in knowing what direction to trade as the vix moves closer to a gap line.

Notice 1/7-8 on the next chart.

On 1/7 there were 4 known gaps on the vix originating from 12/30 & 12/31

As the trend of the vix was up the probability of filling these gaps was extremely high. the only direction the trader should be trading is short!

Conversely on 1/8 as the trend on the vix was down, the trader had a known cap (see green line) that became a target. 1/8 was categorically long into the gap fill which occurs in 1/9

Knowing where the gaps are on the vix provides a tremendous advantage in determining the direction of the trades as the vix trends toward the gap

Do You Know Where The Gaps Are? Do You Know What the Trend Is?

Trin Gaps

Trin gaps work the same way as vix gaps. They are predictable and highly useful in knowing the direction of the trade and potentially how long to hold it. We track trin gaps on a 25 tick bar chart.

Notice there were 3 known gaps (red bars) at the start of the day on 1/9. the trend of the trin was up. Shorting the market until these gaps were filled allowed for very profitable trades.

Between 11:51 and 12:58 there was a known gap (green bar) that aids the trader to hold a long trade until the gap is filled

Compare the movement of the spoos on the same day in the chart below.

Very easy to follow gap information shows likely target for the Trin.

Shorting the market to the gap fills make 8 easy points in 30 minutes

Same date as above with higher resolution. Gap fill has potential 30 point short

Gaps down to green line means long trade. Gaps up to red lines means short trade.

Even in volatile market gaps are always filled!