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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (38026)	10/21/1999 12:09:00 PM
From: Patrick Slevin	Respond to of 44573

A True Gap is when the Market opens outside the Range of the prior day. Like if the market went from 1260 to a High of 1275 and fell back to Close at 1270. If it opens the next day at 1273, that's just a Real Gap of three points. If it Opens at 1278, that's a True Gap of 3 points. I track True Gaps, I never tracked Real Gaps. Perhaps because there are so many of them. Since 1991, there have only been 195 True Buy Gaps and 331 True Sell Gaps. That's more manageable. I suppose this will be the next question, so.... 234 of the TS Gaps Closed during the day (70.7%) 129 of the TB Gaps Closed during the day (66.2%) So in general it's a safe play to fade the True Gap open, but it can be tricky. I do not use that as a rule of thumb, I look for other stuff to fine tune the odds somewhat.