Trading The Opening Gap by Stephane Reverre
ARTICLE SYNOPSIS ...Trading The Opening Gap by Stephane Reverre
Is it possible to profitably trade a gap opening from the previous close? Here's one trader's test of that idea using Dow Jones Industrial Average (DJIA) stocks as the subjects.
Profitably buying an opening dip or selling an opening
pop, depending on the size of the move, is possible,
but it's not easy money. I systematically tested taking a position in the morning following a gap at the open and unwinding the position at the close of the same day, regardless of profitability. What I found was that the strategy, though not hugely profitable, ...