When a market is actually closed before the open then there is the chance to look for a gap and the potential for that gap to close.
This gives us a trading opportunity.
In the era of 24 hour electronic markets, this isn’t going to work with all products.
However if your market is closed then keep an eye out for a gap.
Here’s a couple of quick tips:
If the market drifts on very little news then look for a test of the “gap level.”
If you’re headed in the direction of the gap – there’s a very high probability of a test of the level.
If the gap level is just outside the recent high or low – look for a break of the high or low and a test of the gap.
Gaps don’t always happen and they don’t always work.
Just keep this one up your sleeve in your trading toolbox.
Good Trading
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