Some people likes to trade gaps because of this there are big probabilities of collect few amount of pips.
But the risk to approach it must be strategic and could be different to each situation.
Gaps often signal continuation with the direction of the open and close of that trading day.
But sometimes could be a sing of weakness if the GAP is filled in less that two trading sessions.
I found a particular situation on DAI, a Germany stock and I decided to go short on it.
In this article, I will tell you how the trade goes and the way as a suggestion to approach it.
2.1 Open trade on DAI
I found this on my daily monitor, what I am looking is pattern formation such as Doji candles, inside bars, engulfing and so on.
This stock did some gaps the previous daily sessions and formed a bearish pin bar. At this level did few touches and
At this same level around 73$ per contract, the stock did few touches in the past and for me, this was a confirmation of a strong resistance.
this was a confirmation of a strong resistance.
The most incredible thing was to look an open GAP about of 240 pips.
That is crazy, I never saw a gap like this.
The next. was create a range to …