Discover and read the best of Twitter Threads about #gaptrading
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If a stock gaps up in pre-open due to an event, does it usually continue going up after market opens? Here’s the analysis about #imtraday #gaptrading 
To validate if a gap up stocks would continue to move up after market opens, we need to backtest it with huge data sets. I have considered data from 2007 to 2019, taken all gap up stocks, gap is calculated by
(Today’s Open price - Previous Close price)/Prev close price.
(Today’s Open price - Previous Close price)/Prev close price.
I get the list of gap up stocks.
Once I get this list, then I calculate what is the % intraday movement. That is Open to close. So again I calculate the returns
(Today’s close price - Today’s open price)/Today’s open price
Once I get this list, then I calculate what is the % intraday movement. That is Open to close. So again I calculate the returns
(Today’s close price - Today’s open price)/Today’s open price
One day spike in #Crude is highest in the History. Higher than 1979 Iran oil crisis and 1991 Iraq war. #CrudeOil #SaudiAramco #DroneAttacks
I don’t usually trade #commodities, but today I took a contrary bet, thought the over night crude attack news would bring in more people to buy the crude, which would push the price to open gap up and there would be few users who might be holding over night short position.
so they might cover the shorts if crude goes up further, and exactly the same happened, after gap up, moved little further and hit stop loss of overnight short holders..
#GapTrading is interesting for #Intraday traders, however for #optionsellers Gaps are headache, as its hard to manage their trades. Here's the last 12 years historical data analysis of #Nifty and #BankNifty, showing the no of days where gap % is greater 1% or lesser than -1%.
#BankNifty has seen more no of gaps during the 2008 market crash period, however #Nifty has seen more no of gaps in year 2011, Nifty haven't seen more gaps during highly volatile period of 2008,so most of the significant movement in Nifty happened during the intraday time frame
If #BankNifty repeats even half of what it has witnessed in 2008, it could be catastrophic for #optionsellers who doesn't have proper #riskmanagement
