>>>What does fading against the gap mean?<<<
"Fading" is a tactic professional traders like to use...it's when you go against the prevailing trend, anticipating a reversal. For example, when a stock gaps at the open, a trader will be watching the quote screen and once the immediate momentum begins to dry up, he will trade against it in the opposite direction whether that be long or short. The idea is that the amateur investors placing their trades overnight or before heading to work in the morning determine the opening price, and that they will often drive the stock to an extreme into a particular direction. So when the price corrects, the traders are there to profit from the reversal. So tomorrow, if CYMI gaps up at the open, it is possible that the traders may short it on the the upsurge as the opening market orders get executed, hoping to cover when the pressure pushes the price back down from an inflated peak. Of course, if it doesn't work out, they'll get stopped out and just go long. But what I'm hoping for is that this intraday downpressure created by possible fading tactics may provide me the opportunity to pick up some more shares in the 20s in case the stock really moves fast tomorrow.
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