Anybody have any good strategy for trading gap up & gap down?

sanju005ind

Investor, Option Writer
#2
I will mention the way I trade the Gaps in Nifty.

Explanation : The Daily ATR of Nifty is usually 90-100 points. Whenever Nifty Gaps more than roughly 2x the ATR. I would look to fade the gap by taking the opposite side.E.G : The day post demonetization day,Gujarat Election day. However if the Gap is less than the earlier mentioned. I would sit out since most of the times it stays sideways. Regular gaps in the direction of the Trend usually points to strength in that trend. Not all gaps can be faded.
 
#3
I will mention the way I trade the Gaps in Nifty.

Explanation : The Daily ATR of Nifty is usually 90-100 points. Whenever Nifty Gaps more than roughly 2x the ATR. I would look to fade the gap by taking the opposite side.E.G : The day post demonetization day,Gujarat Election day. However if the Gap is less than the earlier mentioned. I would sit out since most of the times it stays sideways. Regular gaps in the direction of the Trend usually points to strength in that trend. Not all gaps can be faded.
Interesting. Did you take any trades on today's gap?
 

MSN1979

Well-Known Member
#5
Todays gap down was not that extreme.Usually it goes towards filling the Gap.It stayed that way for a long time. I sold a Nifty straddle expecting it to trade sideways for the rest of the day.
sanju where was ur sl for nifty?
 

sanju005ind

Investor, Option Writer
#6
Since it is a Straddle no need for SL at least for now. Since I have my breakeven points
 

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