posted
How often do gappers occur? what i mean is can you come across them on a daily basis? I wanted to employ a gapper strategy where i would scan for stocks using OTccharts and fine all the gaps that are occuring in the A.M and play the good ones. What do you think of this idea? maybe some are already doing it, if so is effective? A
They post their picks after close after it's too late for you to buy, but early enough for you to watch it in the AM and check out day & closing action, they also have a good track record it seems. They are a paysite tho.
Anyone in here use em?
There's also http://www.daytradersrus.com, linked from the same site above... here's a bit of info that I'm liking from this site, I might have to give #1 a try:
"David's Trading Style:
1. My specialty and favorite type of trading style is to play bounce plays. When a stock is going down and selling off I love to buy that stock as close to it's low as I can get it. The faster a stock sells off the more I will look to buy it. Of course it all depends on why that stock is selling off, but for the most part I will look to take advantage of the temporary selloff as a great opportunity to buy that stock and profit greatly from it's subsequent bounce. This is probably the most scary type of trade but it is also the highest % play and also the most profitable.
2. I love high volume stocks, the higher the volume the better, my specialty is Nasdaq stocks with particularly high volume, although I also like to trade NYSE and AMEX stocks with high volume as well. If an OTC-BB stock has high volume I can also do well at these type of stocks, but the lower the volume the worse I am with any type of stock. Bring on the volume and volatility, the more the better!
3. I also like to play breakout plays, stocks that have broken their hod (high of day) and their trading ranges, again the higher the volume the better.
4. I consider myself to be very nimble when I trade, I like to get myself in and get myself out of a stock often until I'm able to position myself onto the right side of a trade, I do not and will not hold a stock when its going down, unless I'm buying on a nice dip and I'm relatively certain the stock will bounce. However, if I'm taking too much of a loss on a stock I will exit the trade without exception, I try to always exit with a maximum of a 10% loss, no more. You will see me buy in and then sell out of a position often until I'm on the right side of the trade, once I am, depending upon the trade, I may hold all day for a big winner, or I will actively trade the stock if its moving fast and spiking in price too fast, then I will sell the spikes and buy the dips. The broker in which I use for this allows me to trade for relatively cheap, and that is one of the reasons that allows me to use this trading style since I'm not worried about high commission costs. The broker I use for most of my trading is: www.rushtrade.com
5. I also use other brokers for various other reasons. I like to use the Ameritrade Command Center for quotes, for viewing L2 screens, and for their very useful streaming news, http://www.ameritrade.com/. Another very special and unique broker I use is http://www.interactivebrokers.com/index.html, this is a very special broker because you can purchase 100 shares of a stock for $1, or 500 shares for $5. But what I really like this broker for is the fact that you can short stocks which are under $5, and of course you can use margin on stocks which are under $5 as well. And they have some of the fastest executions in the entire business. Their main drawback is the fact that you cannot buy otc-bb stocks with them, and that over 500 shares is .005 per share. But what they are good for they are very good indeed and they are a very important arsenal in my trading repertoire."
-------------Also, did anyone notice that otccharts was showing wrong % gain today on some stocks or was that just me?
[This message has been edited by Ruh420 (edited October 22, 2004).]
posted
Oh yes....happened earlier this week also...got to where OTC was only good for news....and then their news was out yesterday. Felt like Stevie Wonder.
-------------Also, did anyone notice that otccharts was showing wrong % gain today on some stocks or was that just me?
posted
Thanks for the suggestions they're helpful but i just need an answer to this question if anyone knows, how often do gappers occur? a rough idea is what iam looking for, everyday?, thanks
Posts: 109 | Registered: Sep 2004
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posted
Jugi I don't know if this will help you or not I found it in one of my files on my computer but here goes.
*I did not write this* GAPS: How do you play the GAPS? Are they real or fake. Is it really a GAP & RUN or a GAP & TRAP? These are tough questions to figure out & answer.
For me what I look for in GAP is the strength of the gap. Is it an outside gap or inside gap? For me I want to see an outside gap. What is an outside gap? A gap above the previous days high and hold it without coming back down. For me the first 3-5 minutes of the morning are critical on a gap. I focus intensely on the opening price of the day and the low of the day the first 3-5 minutes. What I am looking for on a very strong gap is for the open & lows of the days to either be equal or to be within 1or 2 cents of each other and it has hold that the first 3-5 minutes.
Heres great example
AZAA: Thursday 11-06-2003
GAP & RUN: stock closed on Wednesday @. 85, the next day it opens @ 1.01. Strong gap. It's an outside gap very strong. Again first thing is we look at is the opening price of 1.01, secondly I am watching the spread between the opening price and the low of the day which 1.00. It held that spread for the first 3-5 minutes, bammmm 25 minutes later it hit 2.00.
The main focus was the spread between the open and the low of the day in the first 3-5 minutes of the trading day. If you go into this type trade or if you’re in the trade already in this scenario your stop loss becomes the low of the day off that tight spread.
EXTI: Friday 11-06-2003: Another great trade. I made bank on this on Friday as well. GAP & RUN: The stock had fantastic news. Another outside gap. The previous day close was at .84 then opened the next day @ .89 well above previous day high of .86. Now I am watching how it trades around the opening price of .89. Remember everything revolves around the opening price of the day in the first 15 minutes. Remember your watching this on your Level 2 screen.
Open is .89 now the low of the day is .885. I have my tight spread that I am looking for in the first 3-5 minutes of the trading day, and watching this develop with level 2. As soon as I got my tight spread set up I bought 10k shares @. 92. All I have to do know is make sure it does not break the low of .885 that’s my risk. In one hour it hit a high of 1.15. My exit was .1.12. My risk was 400 my reward 2,000.00 one hours work.
**** I will only make these kinds of trades if the stock trades above 5 & 10 moving averages.
GAP & TRAPS: The only thing I will mention about a trap is if a the stock gaps up and stays flat for 10-15 minutes and you see the high of the day equal to the opening price chances are it’s a trap. Another words if XYZ stock HOD is .50 in the first 15 minutes and the opening print is .50 and the low is .48 after 10-15 minutes and you see it break the low. 48 watch for the trap. USXP is a great example Friday 11-07-2003.
Other traps I see on regular basis are when I see stocks being promoted via email by pump houses. You get the initial gap it holds up 10-15 minutes then comes the trap. ask your self these questions .
Does it trade at least above the 32, 10, 5 daily moving averages, at least you know its an up trend. If not don’t touch it.
This should help you guys understand the opening bell a little better.
posted
Basically when you hear people say a stock gapped big in the AM they are meaning that a stock opened higher than the previous day's close. An example would be a stock that has good news after market close because when the markets open up in the morning they are bound to Gap big. Again the Gap is the difference between the closing price and the opening price the next market day. Good Luck
[This message has been edited by MxPx (edited October 22, 2004).]
posted
If I'm in a stock that closes HOD & gaps, I usually sell half at open and wait about 5 minutes to see where the price heads.
A problem I've run into in the past is if I hold my whole position at open and the stock starts trading down, it is really hard to get out. Then you have to try an figure out if the gaps is gonna fill or not? If I sell some at open, I take a smaller hit when things go south.
There alot of other variables, news, vol, float, ta, that will affect my descisions but I'd rather take profits a little at a time than lose $ on a gap n crap.
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