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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: Rocketman1 who wrote (4692)	7/13/1998 6:14:00 AM
From: John Hunt	Read Replies (2) \| Respond to of 12617

Rocketman, A gap is when the stock opens significantly higher or lower than the previous close. The amount of the gap determines what is likely to happen during the trading day. If the stock gaps 15% or so, the stock will usually rise / fall within the first half hour or so and then pull back, before resuming its trend. However, if a stock gaps up 40 - 50%, it has probably fully discounted any news and will not resume the trend that day. However, remember there are always exceptions to any trading rule, so the best you can do is try to understand the patterns and play the odds. You can trade the stock by either buying / selling on the first uptick / downtick and reversing when the momentum stops, or you can wait, as he seems to be saying for the pullback before entering. Everyone has their own style and I am still learning and certainly no expert. There is nothing wrong with trading using limit orders to buy and sell, especially if you can't watch the stock all day. I would call it 'swing trading'. Hope this helps. Have a great trading day. John PS - If you want a great introduction to daytrading, read the first 100 - 150 posts of Ken Wolff's SI momentum thread where he talks about several daytrading patterns. Subject 18748