3SOF

For daytraders only...quick setups.  I am gonna scan for gaps to fade in the morning (9:30am - 10:00am)

Fading the gap:  Stocks that gap in the morning often come back to their close price.

I am just testing this out...used to do it a lot.  Need a refresher.

Hay Elite G , What scan do you use for that?  Tony

I find gaps using Realtick or just in yahoo.  Many sights show the morning gaps.

then a quick visual on the chart... today I'll just post the intraday fades that worked... something to study  8)

I see thanks.

     I have something that ive been kinda looking at for like the last two or 3 years. It started with Enron, and Adelphia Cable. Both of these companies and many others that i have looked at in the last few years, they went bankrupt, then their stock hit the street, i think i remember adelphia being at like .0005 . But the point they all seem to drift back up , of course not to original status. But taking a minor investment of 200 dollars on adelphia , you whould have had 400000 shares, the the stock went to at least .30 , and higher. Well thats quite a pinch for a meager investment . Wht ya tink?  I did the same thing with enron, only went to .10 before i sold though.   Tony

I think the idea is good.  How much time did it take to go up?

Elite-
Once again, you are spot on in your ideas. As I'm sure you are well aware, there are ALOT of guys who make an absolutely great living just fading gaps, not to mention fading the open.
The Irishman

thanks Irishman,

Definately aware of it  ;)
I'll post some gaps that were good to fade by end of day or over the weekend..we can all study up...and get ready for next week

8)

I remember it being ,,, 6 months to a year. Not good for the adhd. But for a let me alone and see what happens it seems to go pretty good. The trick seems to be to wait for the turn around off bottom. Winn dixi did something similer a little while ago, went down to .60 then in a month or so to 1.20 , and now i think drifting to a 1.00.

too long to wait for me...but point one out if you see one

this is a perfect fade.. :o

**note: the stop would be @ high of day up to that point...that is an amazing reward to risk ratio

entry: 27.83
stop loss: 27.93
target: 27.45

(for shorting)
reward = entry - target = 0.48
risk =  stop - entry = 0.10
reward to risk ratio = reward/risk = 0.48/0.10 = 4.8 = awesome!

THE FADE of the day!...a little something special here  Evil Wink

(for shorting)
entry: 37.95
stop loss: 38.18
target: 37.06

reward = entry - target = 1.34
risk =  stop - entry = 0.23
reward to risk ratio = reward/risk = 1.34/0.23 = 5.82 = wow!

no setups today for gap fades as the market did not gap strongly itself...tomorrow hopefully

I was managing my positions and did not pull the trigger on this.  It a great Fade even if it goes no further.

I will try to post something here today.  Anybody else have any gap fades?

Tho, I haven't traded the Gap fade before. I am intrigued and compliment you on your work.

Do you look for opening gaps via INET ? ........if not pre-opening screens what criteria do you use to watch for interday gaps, if any?

I generally day trade and try to not have any dayend carry over.
Those I have been trading for the last few weeks are IIJI, ABLE, GEOI
Started ROYL this week and back into FORD.

Thanks for sharing.

Thank you jayrbee.  :)

I know some of the morning gaps via a filter in Realtick but I also find them by searching the web for news and I keep a list of very liquid, volatile stocks that are safe for a gap fade.

I generally look for 50 cents of gap or better to trade.  The gap fade is only entered in the 9:30am -10am time frame based on the gap on opening.  It is also a useful thing to sell by 10am sometimes as reversals generally happen at this time. 

I will try to post ones I am watching eventually, but for now it will only be studies.  I hope they shed some light.

8)

Hi Guys, The only place that I am able to find gaps up and down before the market opens is from Breifing.com's in play news wire. It's delayed on yahoo finance but my online broker streams it real time.

Not gonna be able to post any studies today...tired. 

MR. O - I will check for other sources of gap ups.

Looking at CRXL, NCRX, SGMS, IMCL, GSOL as possible gap fades

CRXL just activated, short CRXL

stop is 24.13 on CRXL(high of inside candle)

wowee! beautiful

thats what its all about

allright I feel like fading gaps today..lets see if anything pops up.  If you feel like something is gapping up or down falsely let me know  ;)

this is my possible list:

ANTP  CBST  PAYX  CRDN  BRCM  XMSR  YHOO

COGN entered the gap, CBST PAYX XMSR off watch

YHOO faded, COGN faded..no one else triggered...nice  8)  ANTP is right there but out of my time zone

Honestly, probably my favorite technique for daytrading. This is one of the few that I use if I'm going to hold a security for a very short period of time. I didn't have a very good day, but I did profit a bit... Also checkout how MERQ did the anti-fade.

BSX:
Short @ 28.65
Cover @ 28.47 (I had to go get lunch :( )

(http://www.vafrous.com/stocks/bsx.jpg)

hey mix-master-mike  ;)  Nice work.(applaud)  I'll try to find some gaps to fade tomorrow.  If you want to try posting any gap fade picks here that would be great.  This could end up being a great resource for those interested in learning or playing the gap fades.   >:D

A couple days ago, I bought BRAVO at .72 when it fell from the sky.  Flipped it up at .90.  made some money.  It does work!

EliteG,

thanks for the compliments :) And congrats on your success, you seem to be a great resource for the board. I noticed that like many others, I'm following in your footsteps - I'm 19 and a CS major at UofM - but instead of doing trades before class I do some during :)

Unfortunately I work full time this summer, and I get into work after a long drive right at the market open, but I'll try to post what I'm playing as early as possible.

Keep up the good work, sir.

Michigan is a great school...it may be evil(I was a Buckeyes fan, grew up in Ohio ;)) but they have a great program.

If you need any help in Computer Science just ask.  I may have some of my old things  >:D  So what you looking to do with programming skills?  I always wanted to work for Blizzard or LucasArts, but decided on Electrical instead of Computer Science.

I did my best trading when I was working 2 other jobs.  Good for you man.

wasn't paying close enough attention to post some picks.. :-X

AH! THE BUCKEYES! What a good rivalry :)

I much enjoy web programming - your PHPs, ASPs, JSs, etc... That's what I'm doing at my current summer job, and it's a good time.

Okay, okay... today... I haven't seen many high vol picks that are worth (able to) shorting. And the anti-fade I'm really not feeling today. And I missed the damn market open (ahh work!).

Right now I'm closely watching the action with MPET... might get in if the vol. is right and it doesn't break any trends.. I'll try to post a chart at the end of the day.

Ah! Entered into MPET @3.12 (short)

Okay that one clearly isn't working out... closing position. I'll review the others I was watching today AH and post some charts with anything tasty.

Alright, had a bit of a down day. One that I couldn't pay too close attention to at work was this; it formed a pretty chart:

(http://www.vafrous.com/stocks/enmd.jpg)

Quote from: mix_master_mike on July 06, 2005, 10:12:47 AM
Ah! Entered into MPET @3.12 (short)

mike,
  can you clue me in to how you shorted a stock under $5? i didnt know you could do that with any retail accounts. thanks

EliteG are you a fellow buckeye?  Class of 93 for me.  Teddy Ginn looks good this year.  Go bucks!!

Shorting can only be done on margin, and margin requirements vary by stock. They are usually based off of volitility, as far as I understand. There are many sub $5 stocks that ETrade will let you short.

Quote from: Adam on July 08, 2005, 10:41:12 PM
EliteG are you a fellow buckeye? Class of 93 for me. Teddy Ginn looks good this year. Go bucks!!

nope but I went to Toledo.  Yea cant wait for football season to start.  The best sports game I have ever watched may be the Ohio State vs Miami College Championship match.  That was incredible!  Triple overtime.

Yes, that game was sweet... but you want to talk triple-OTs? How about that UM v MSU at the big house this last year? Classssssic...

shoot I wasnt playing close attention to that last year, sounds good... but it didn't have Willis Mcgahee's knee inverting after a tough tackle  ;)  I have that vid on my pc....nasty but classic.

good gap fade setting up

triggered  8)

magnifico  :D

Hay G  whats your fad trigger? 10%. I have never shorted but my account has been upgraded to a margin,,, so im looking to learn. Thanks    Tony  G

Hey agatto2, these gap fades are very rule specific plays which make them, in my opinion, extremly safe and almost easy.  I'll break it down for you:

1.  Find gapping stocks
          -I like to find stocks that have gapped up and fade that gap, or short them but you can do the opposite with stocks that have gapped down and fade them long.

2.  I look for the gap to go outside of the BB(Bollinger Bands), $10-$40 price range, at least 200,000 volume at that time of day which is almost right at open.  This gives you a fast exit(liquidity)

3.  Some people use the break of the first 5-min bar to go short or you can use an inside candle that forms(i like this way a lot)

4.  trigger is immidiate break of that 5min bar low, or inside bar low

5.  stop is very tight, high of day at that point or top of inside candle.

6.  target is the close of the gap but you dont need to wait for all of it since it can be a huge gain anyway.  take 1/2 profits if you feel support coming on.

7. these play usually dont last more than 1.5 hours and I have had plays that only last a few min.

8.  this is an awesome tool to every traders arsenal  >:D

 ;D

GREAT find today Mr. G!

thx Mr. Mix  ;)

BAM!

wow almost completely faded!  a 6.6% move (short @ 17.90) a great fade!

couldnt find any fades for today, any luck mix?

Quote from: eliteG on June 10, 2005, 09:44:44 AM
I find gaps using Realtick or just in yahoo.  Many sights show the morning gaps.

then a quick visual on the chart... today I'll just post the intraday fades that worked... something to study  8)

Here's what I use:
http://www.trade-ideas.com/Help.html#wsf_MinGUD

I also like false gap retracements as these often indicate a good direction:
http://www.trade-ideas.com/SingleAlertType/FGUR/False_gap_up_retracement.html

Quote from: eliteG on June 15, 2005, 02:17:08 PM
I will try to post something here today.  Anybody else have any gap fades?

Here's a list of recent ones:
http://www.trade-ideas.com/SingleAlertType/GUR/Gap_up_reversal.html

This one was pretty amazing from Tuesday - especially the continuation after crossing the open:
Y 07/12/2005, 03:57:32 PM Gap reversal, Gap=+1.25, 1.01 gap continuation.

Hey atl_trader  ;) (I'm in atlanta too)

Thx for the links.  Can you tell me how you use these trade ideas alerts?  Just for study or do you get realtime gap fade alerts?

I checked the links and it seems that a lot of these don't have the volume or the neccessary gap distance is that something you can set for it to look for.

coo  8)

elite, again, great find monday. I really haven't been watching too much this week because here in Detroit we had the MLB All-Star game. So I've been playing a little hookey and getting to work late the last couple of mornings with all the festivities. I'll post some finds tomorrow morning. Happy trading and good luck today sir!

yo mike...cool  8)

BWLD...entered the gap
ATRS, ELOS too

Quote from: eliteG on July 13, 2005, 12:33:55 AM
Hey atl_trader  ;) (I'm in atlanta too)

Thx for the links.  Can you tell me how you use these trade ideas alerts?  Just for study or do you get realtime gap fade alerts?

I checked the links and it seems that a lot of these don't have the volume or the neccessary gap distance is that something you can set for it to look for.

coo  8)

That's great! I keep things moving in Midtown on Peachtree.

That's how I use the system ... I pick those alerts and then I can make all kinds of filter requirements based on volume (daily, current relative volume, etc.) or volatility or base on price (position in daily range, year range, MAs, etc.)

I dont think you'll see all the symbols in this alertwindow without signing up for the trial, but this is what I am looking at this morning:
http://www.trade-ideas.com/View.php?O=18300000000_3d_0&QGUR=.25&QGDR=.25&QFGDR=75&QFGUR=75&MaxPrice=66&MaxSpread=10&MinVol=300000&MinRV=1.4&WN=Gap+Alerts+on+Volume

Quote from: eliteG on July 11, 2005, 11:07:25 AM
Hey agatto2, these gap fades are very rule specific plays which make them, in my opinion, extremly safe and almost easy.  I'll break it down for you:

1.  Find gapping stocks
          -I like to find stocks that have gapped up and fade that gap, or short them but you can do the opposite with stocks that have gapped down and fade them long.

2.  I look for the gap to go outside of the BB(Bollinger Bands), $10-$40 price range, at least 200,000 volume at that time of day which is almost right at open.  This gives you a fast exit(liquidity)

3.  Some people use the break of the first 5-min bar to go short or you can use an inside candle that forms(i like this way a lot)

4.  trigger is immidiate break of that 5min bar low, or inside bar low

5.  stop is very tight, high of day at that point or top of inside candle.

6.  target is the close of the gap but you dont need to wait for all of it since it can be a huge gain anyway.  take 1/2 profits if you feel support coming on.

7. these play usually dont last more than 1.5 hours and I have had plays that only last a few min.

8.  this is an awesome tool to every traders arsenal  >:D

I just reread these rules - thanks for putting them on 'tablets' and bringing them down the mountain!  Great traders always have a plan and rules to live and die by - I think what's here is great stuff.  I even tried to model it and think I came close.  Without a trial you'll only see a few of the symbols that come through:
http://www.trade-ideas.com/View.php?O=804002c000000010100000020_3d_0&QNLPF=1&QGUR=.25&QFGUR=51&QPFH75=.25&QPFH25=.25&QRDI=2&MinPrice=10&MaxPrice=40&MaxSpread=10&MinVol=200000&MinRV=1.4&MinGUD=.25&MinBoll=99&MaxCount=20&WN=EliteG+Fade+the+Gap+Alerts

watching DCEL and COOL today.

lookin for PLAY  SGTL  SYNA to set-up  >:D

all our picks are fading mix  ;)  we rock!  >:D  fade masters

I thought I might paste the gaps I see through a Realtick MarketMinder I have.  This is the first step in fading stocks  ;)

noticed some errors in the topmost gaps but the rest are right on

PLUG broke its 5min bar low...should be good for a short, stop @ high of day  ;)

I'm not playing anything today or really this week.... but... today: ELSE, PLUG, TRFX

my current realtick gap list:  hopefully one of these will setup a great fade today

last update before market opens...(yea i know some glitches on top)

VPHM - entered the gap

wow..no nice gap fades, VPHM, just took out its stops...hard to stop this powerhouse  >:D

Yeah, wow, the first day I've seen in many without any decent fades. Everything I was peaking at today continued upwards.

Here's my list of gap faders - it refreshes during market hours:
http://www.trade-ideas.com/SingleAlertType/GUR/Gap_up_reversal.html

I play the continuation of these.

gap list for fading...lets hit it faders  >:D (we're gonna have a gap down so I'm thinking may be opportunities to fade long  ;))

8)

Thanks for the list G-Unit... I got into work 5 minutes after the opening bell and didn't have time to prep my own :)

Best of luck today!

thx mix, glad the list helps

kick it  8)

Both GM and F are making pretty, relatively textbook and narrow fade-ups.

gappers  8)

going for nse today,,, no time to post chart. let us see what happens here  >:D >:D

looking to fade the gap here on CARS short @ 36.12  >:D

good morning

ADBE is looking good for a short here too..target 26  >:D

ADBE went down but was stubborn and didnt givemany points

..and geez it took forever but CARS finally closed its gap.

One more down  ;D next

wow! this is a great resource,
thanks everyone for your input.
i have a question which i asked on the bcon board but got no answer so hopefully soneone here like elite g or mix master or some of you other traders may be able to help me with.
i noticed both bcon and vphm gap up in the morning but in the pre market ,say, for bcon as i remember it there was about 250k sales rather than buys so when the market opened it closed the gap . is this something to look for in a gap up in the pre market when there is a lot of selling at a higher price than the previous days close that the gap will probably close. vphm was the same.
thanks love to here your input,
maxi

Quote from: atl_trader on July 13, 2005, 02:14:58 PM

Quote from: eliteG on July 13, 2005, 12:33:55 AM
Hey atl_trader  ;) (I'm in atlanta too)

Thx for the links.  Can you tell me how you use these trade ideas alerts?  Just for study or do you get realtime gap fade alerts?

I checked the links and it seems that a lot of these don't have the volume or the neccessary gap distance is that something you can set for it to look for.

coo  8)

That's great! I keep things moving in Midtown on Peachtree.

That's how I use the system ... I pick those alerts and then I can make all kinds of filter requirements based on volume (daily, current relative volume, etc.) or volatility or base on price (position in daily range, year range, MAs, etc.)

I dont think you'll see all the symbols in this alertwindow without signing up for the trial, but this is what I am looking at this morning:
http://www.trade-ideas.com/View.php?O=18300000000_3d_0&QGUR=.25&QGDR=.25&QFGDR=75&QFGUR=75&MaxPrice=66&MaxSpread=10&MinVol=300000&MinRV=1.4&WN=Gap+Alerts+on+Volume

I've added another strategy that is like a bloodhound in the way it finds whats in a strong trend - these candidates gap up from yesterday's close by at least $0.05 or more but no fading these:
http://www.trade-ideas.com/View.php?O=2a20000000000000000000000_3d_0&QRUI=2.5&QSBOC=2&QFDP=2&MinPrice=3&MaxSpread=10&MinRV=1&MinFCD=.05&MaxLR130=0.35&MinConDays=2&MinRCon=55&WN=Strong+Trend+Candidates

with out the free trial i think you'll see every 5 alert or so.  But when I ran this on Friday - I feasted on GMA and ENH

here is a discussion by quite an experienced trader I found from one of the Yahoo MBs, discussing trading gaps on the CBOT Mini Dow market - makes for some interesting reading, on both mentality and philosophy of trading gaps, and also with plent of detailed examples.

Ineresting reading!

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1070+14719,00.html

I thought it might be interesting to bring this thread back to life as JMoney just contacted me about how useful this method seems.  I might start posting these plays again but I only suggest playing if you have an account you can use margin with to short(over 25k usually).  No matter if you "fade the gap" I think it is important to know of this method and that many traders do use it.

The following is some guidelines I put down on page 4 of this thread.  Check out the examples, especially the real-time ones. 

Quote from: eliteG on July 11, 2005, 11:07:25 AM
Hey agatto2, these gap fades are very rule specific plays which make them, in my opinion, extremly safe and almost easy.  I'll break it down for you:

1.  Find gapping stocks
          -I like to find stocks that have gapped up and fade that gap, or short them but you can do the opposite with stocks that have gapped down and fade them long.

2.  I look for the gap to go outside of the BB(Bollinger Bands), $10-$40 price range, at least 200,000 volume at that time of day which is almost right at open.  This gives you a fast exit(liquidity)

3.  Some people use the break of the first 5-min bar to go short or you can use an inside candle that forms(i like this way a lot)

4.  trigger is immidiate break of that 5min bar low, or inside bar low

5.  stop is very tight, high of day at that point or top of inside candle.

6.  target is the close of the gap but you dont need to wait for all of it since it can be a huge gain anyway.  take 1/2 profits if you feel support coming on.

7. these play usually dont last more than 1.5 hours and I have had plays that only last a few min.

8.  this is an awesome tool to every traders arsenal  >:D

check out the examples!

I'm going to start listing some examples here of fading the gap.

Also wanted to add that it is usually best to go the way the market goes.  If it gaps up look to fade short.  Today was a gap down so I was looking to fade long.  The market itself fades the gap  ;)

another