The gap strategy is about profiting from panic in the markets. It takes some careful study. It can work on any instrument representing major indices (eg GER30, US30)
At the outset I should say that this is one strategy that should be practised carefully on demo accounts repeatedly to see what happens. For sure you will lose many times – and keep in mind that losing is about 60% of this business – that’s the easy part. Finding the skill to limit your losses on that 60% and maximising winnings on the 40% (or so) of winning trades is the most difficult part.
Nobody is saying you need to make silly money every week or to leave your regular job. The following strategy is applicable for about 1 hour every day of the working week. What if you could make just £200 profit per week (tax free – after all your losses)? Could that be useful to you? And what if you got better at it and began making more?
In the video below things do happen very quickly – so quickly that many people may not have appreciated that Alessio Rastani made £1180(approx) in less than an hour in this particular trade. See the video first – it moves surprisingly fast.
The screenshots below are clickable and take you to specfic points in the video.
Trade opens at 12747 @ 14:29PM (click pic to get to point in video)
First lot of profits (approx) => £15 x (12788 – 12747 ) = £615
Second lot of profits (approx) => £15 x (12826 – 12747) = £1185 @ 15:20PM
Total profit = £1800 in 51 min (less than an hour, for emphasis).
A number of things have come together in this trade that most people unfamiliar with spreadbetting are not likely to appreciate:
- Experience of what happens at the open of markets.
- From that experience picking the right day of the week to attempt this (based on statistical analysis).
- Managing losses, with an appropriate stop-loss.
- Avoidance of greed by taking half of profits at the appropriate time.
- Exiting at the appropriate time.
- Acceptance that this sort of strategy will lose more times than not, but limiting losses quickly and knowing when/how to let profits run.
Alessio is a pro at this stuff. He wasn’t born a pro, which means that he had to acquire the knowledge, experience and skill (KES) to do this. If he can, you cannot?
His strategy for this is at his site here and quoted below:
Simple Set Up Instructions:
- Set up a 5-minute or 2-minute Chart of the Dow mini Futures (YM) – For free charts and trading platform we recommend ETX or go to www.etx-capital.com
- The timeframe for this chart must be from 9:30 ET to 16:15 ET
- This chart will show you the Opening Gap, which essentially is the gap from yesterday’s closing price on the Dow at 16:15 ET to today’s open at 9:30 ET
- You trade in the direction to fill the gap (see below)
- If the open on the Dow today is lower than yesterday’s close, then we go long (buy) and if open above yesterday’s close then we go short (sell short).
- The gap on the Dow must be a minimum of 20 points and no more than 100 point.
- Enter with a market order at the market open i.e. 9:30 ET
- Use a 20 (or 25) point stop-loss
- The first target is when half the gap fills.
- The final target is yesterday’s close (or a few points away from it).
New traders should not attempt this strategy with large sums of real money. It’s best to try this with smaller sums like a £1 bet and gain that KES. I have to say that there is no shame in putting on your L-plate and learning in a safe environment. Some may laugh at you now for winning or losing demo money but if you practice hard, you can have the last laugh in the end!!