Gap Trading Strategy For Regular Income From Stock Market

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Gap trading strategy for regular income from stock market. This video is dedicated to Scott Andrews, “The Gap Guy”.

Scott has made a lot of research on trading gaps in the US markets and he traded the S&P 500 index successfully there. I have also done some research in gap trading in India and found that gap trading strategy can be equally profitable in the Indian markets and you can successfully trade the Nifty, Bank Nifty as well as the liquid stocks of Indian exchanges. You can even trade liquid commodities with the same logic.

The preferred way of analyzing gap size is to use the 5 Day Average True Range (ATR). Gap sizes equals to or below 20% of 5 Day ATR is filled very fast and the win rate drops off significantly when the opening gap size is beyond 40% of 5 Day ATR.

How To Trade Gaps?
The most simple gap trading strategy is find a stock or index that opened significantly gap up or gap down than the last close. In case of a gap up simply open a short order with a target of last day’s close. Similarly in case of a gap down simply open a buy order with a target of last day’s close. Use a stop loss of 20% – 50% of 5 Day ATR depending on your risk appetite. You can find stocks with more than 1% gap up or gap down in our NSE Stock Screener page in my site www.stockmaniacs.net.

Gap trades can be improved for a regular income from stock market if we understand the concent of gap zone. I have coded a special formula in Amibroker using the Gap Zone technique. I have named the trading system as GAPTS (Gap Accelerated Profit Trading System).

I will start distributing GAPTS on Amibroker shortly to my trading clients who are trading actively in my team. Remember to receive a copy you must have a trading account in my team.

Thanks a lot for watching my webinar on Gap Trading. I will come with more results on GAPTS on Amibroker.
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Tools Used In This Video
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We have used our FREE NSE Stock Screener: http://www.stockmaniacs.net/freebies/nse-stock-screener/
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Also, Check out:
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Intraday Gap Trading Strategies: https://www.stockmaniacs.net/intraday-gap-trading-strategies/
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And Follow Us At:
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Website: http://www.stockmaniacs.net/
Twitter: https://twitter.com/stockmaniacs
Facebook: https://facebook.com/stockmaniacs
Google+: https://plus.google.com/+stockmaniacs

This presentation contains images that were used under a Creative Commons License. Click here to see the full list of images and attributions:

https://app.contentsamurai.com/cc/79464

Comments

Sikander Kumar says:

How to calculate atr

sibbala kiran says:

can you please make a video with this concept by taking a script using zerodha kite

sibbala kiran says:

ok got it .Its ATR with period 5 in studies.But can you please let me know how to use that identify whether the gap size is <=20% or >=40% of 5 day ATR ?

sibbala kiran says:

Hello,

In your video..it is mentioned that if the gap size <= 20% of 5 day ATR they will be filled fastly.and win rate drops if the gap size is >=40% of 5 day ATR.
I am having a zerodha account and found ATR Bands in studies.
Can you please explain how to use that identify whether the gap size is <=20% or >=40% of 5 day ATR ?

Stealth Dodger says:

Today’s gap up near resistance was beautiful. The reversal after the 10:00am #’s were even more predictable! I recorded and upload a great trade during the double bottom major trend reversal formation knowing we had just FILLED the GAP! All in on the Gap Indrajit!

Satish Kathar says:

Can you use hindi language …. that I understand better. Please this video.

Shivam Dubey says:

Undoubtly a very good video. Answered the WHat How and When of Gap trading. I would love to learn more about the same.

Milan Dutta says:

i am a novice in the stock market….it will be very kind of u if u explain the atr,,,,how to find 5 day atr? thanks

Surendra Atchyam says:

Hi sir, can u share analysis on vortex

rishi jha says:

nice.👍🏻

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