Gap Trading

Gap trading is a simple and disciplined approach to buying and shorting stocks that have a price gap from the previous close on a news catalyst. In my trading I focus on gaps with relatively high pre-market volume from the institutional players that are selling and buying these stocks before the market opens.

There are several gap trading setups that I developed over the last year (I call them my A+ setups). They include the following:

  • Gap & Go Setup
  • Gap & Reversal Setup
  • Gap & Continuation Setup

I run a private Twitter account where I share alerts with my subscribers on these setup trades.

While the gap trading strategy can be very profitable, as with any trading strategy, not every trade will turn into a winner. Losing trades are part of the game. That is why I only trade with stop losses.

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Below you can see some of my recent winners and losers.

Recent Winners

SDC – Gap & Go Setup (November 13)

EXPE – Gap & Go Setup (November 7)

ROKU – Gap & Go Setup (October 28)

NFLX – Gap & Continuation Setup (October 18)

WDAY – Gap & Go Setup (October 16)

NVDA – Gap & Go Setup (October 15)

CGC – Gap & Continuation Setup (11 October)

ROKU – Gap & Go Setup (October 9)

Recent Losers

While the gap trading strategy can be very profitable, as with any trading strategy, not every trade will turn into a winner. Losing trades are part of the game. The following charts show the trades that I was in but had to exit due to price reversals.

ROKU – Failed Gap & Go Setup (November 7)

TSLA – Failed Gap & Reversal Setup (October 24)

NVDA – Failed Gap & Go Setup (October 22)