Gapping Stocks

Gap Trading Strategy

Gap Trading is a short term trading strategy. With this strategy –

  • Short term trade - hold a position for one day to one or two months.
  • Superior Performance - Gap trading strategy has returned 11% per annum.

For stocks that are expected to gap up, we try to get in at the market open if the price is within our target range (Closing Price to Expected Open Price).  We set our entry point between 9:30 am and 9:50 am. If the order does not get filled in that time frame then we cancel the order. We typically set a stop loss of 8% below the market entry point.  Our profit is usually in the range from 4.5% to 14% per trade.

We buy if the stock gaps at the open – but below the Expected Gap Price

Gap Trading Report
Stock Symbol Yesterday Closing Price Expected Gap Price
DMLP $23.00 $24.15
CRMT $23.78 $24.97
IXYS $24.76 $26.00
MOLX $25.67 $26.95
TSM $21.67 $22.75
FLML $15.77 $16.56
CAAS $19.45 $20.42
BGFV $12.66 $13.29

 

View  Gap Trading Strategy Performance