How to handle Gap up/Gap down scenarios w.r.t to taking the trade the next day


Last Update 3 years ago

Waiting for some time after the open is a prudent strategy. If you are an active day trader, then you need to decide how long you shall wait to gauge where the market is headed to. The time of waiting is to be decided. Gap opens are not predictable but they do demand faster action from the player as a gap, by definition, indicates markets in a hurry. Those are not stocks to be approached with a specific time rule as one may do so at other normal times.

 All analysis and indeed all tools that facilitate analysis and consequently trading are to be applied to "normal "markets. Most of the time they work. Some of the time they don't. Or cannot be worked. It is just something to accept and move on. Fortunately, such situations tend to occur once in a while and we should just let it ride. Trying to find solutions for them will not really be possible. Every now and then something shall get away from us. We should just let it go and move on to the next one that we may be able to catch. The good part about the market is that there are plenty of items to catch!

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