Why Use Trading Rules?



In order to successfully trade gapping stocks, one should use a disciplined set of entry and exit rules to signal trades and minimize risk. Additionally, gap trading strategies can be applied to weekly, end-of-day or intraday gaps. It is important for longer-term investors to understand the mechanics of gaps, as 'short' signals can be used as exit signals to sell holdings.



Each of the four gap types has a long and short trading signal, defining the… Continue