My 8 years of experience in 5 min. A thread on a very important strategy on how to trade the gap up or gap down opening . Follow me to learn for free and help me fulfill my mission of 1 lakh independent traders .

1⃣ Open Gap Reversal Trading Strategy These patterns generally appear at the top or bottom or any strong supply or demand zone. The open gap reversal process:- - There needs to be an existing extended uptrend on the chart for at least a few trading sessions to the supply zone

- A gap up in price to quality supply zone is a very high odds shorting opportunity. - Or a gap up in price to quality supply zone in the context of a downtrend is a very high odds shorting opportunity.

- After a gap up the price starts falling and crosses yesterdays. This generates the sell. - The Stop-Loss is the low of the same day. NOTE :- As we are trading against the gap more confirmation is required confirmation either from price action or volume action.

2⃣ Inside GAP Trading Strategy :- Let’s analyze a downtrend and the previous day was a down day. Today’s price gap is up but close within the range of the previous day. Our entry opportunity will be (a) Gap up short (b) Gap up long

A gap up in price, in the context of a downtrend, is a VERY high odds shorting opportunity if any bearish reversal signal is given. A gap up in price, in the context of a downtrend, is a lower odds buying opportunity.

If the stock gaps up and then sell off and remains beneath its opening price after the morning pullback has stabilized, it’s possible that the stock has reached its high of the day.

However, if a stock gaps up and pulls back during the morning pullback, but then rallies to break above its opening price, the mark-up was probably not trapped gap and the stock should make new intraday highs.

(a) Gap up short in a downtrend Context downtrend :- - Wait for at least 5 minutes. - After the 5 minutes, wait for a reversal price signal to provide you with short-term confirmation that the mark-up was a trap by smart money and the short-term trend is pointing downward.

- Then short below of the first candle Volume should be below. If the stock has gapped up high; volume should be high for confirmation of the real gap. - If the price closes below the opening price with no large volume, chances are that the mark-up was a trap by smart money.

(b) Gap up long in a downtrend How to know, whether the gap up is real or trapped by smart money. - Market when gap up opening, the volume should be heavy to go higher. if smart money is active supported by volume.

- Wait and see if the market trades above its opening prices after the morning pullback. It indicates the gap was real then go long. - Or you can enter from a previous day’s low when the price retrace test of the previous day’s low.

3⃣ In an uptrend, entry opportunities will be :- (a) Gap down long (b) Gap down short

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