In the last episode we learnt about sentimental gaps and how it got faded by going against the retail traders sentiment and in this tutorial we will look into the professional gaps which remains unfilled for months and sometimes years!
Gaps are always interesting to me! I gives directional clues and also trading ideas. However each and every gaps should be treated differently. In the last tutorial we had discussed which gaps need to be given preference and which one should be ignored. Only the Gaps which opens above or below the previous days high low range gains importance from a traders perspective.
Strategy is very simple. when the market open with gap up and at the same time ,it crossed the previous day high then it should be considered as strong buy. When the market open with gap down and while opening if it crosses yesterday low then it should be considered as strong short.