Fading the Gap

A great trading Method by TRO
The way we will play this

1. When the stocks gaps up we will short this stock and vice-versa. When the stop gaps down we will buy.

2. We are looking for the gap to be filled. For example a stock that was 20.5 at the previous close and in the morning it gapped up in premarket to 22.40, we will short it. The gap filled price will be 20.5 however, we do not or ever wait for it to be filled we will take profit as much as we can. If it goes down to 21.4 we should already start to rake in profit even if the change is as low as ten cents.

3. The way we will enter our trigger price is the opening of the market or we can wait for the reversal candles. I prefer the reversal candles. ex such as green candles turn from red to green vice versa. I usually look at the 5 min candle for this setup.


This is the chart of CHRW on Nov 1, and Nov, 2. What is being shown is the 10 min chart. It shows how rapidly gap can be filled.









Note: Fade the Gap can be filled very fast sometimes as fast as within 5 min. The accuracy of this is usually 80 percent. Even if you make a dime for each share, it will come out nicely. I mean 80 percent of knowing you will get atleast a dime is fantastic. Remember to get practice with paper money first before entering with real money.