Gaps? What to do? © 2009 ProAct Traders LLC www.proacttraders.com

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Gaps Occur due to primarily two things: A fast moving market After hours trading over the weekend The rule of thumb is that ALL gaps get filled The question is: WHEN?

Gaps filled Usually gaps will be filled within 24 hours This is especially true if they occur over the weekend This is an untidy mess from a trading standpoint and since all gaps are filled, Institutional traders like to fill them and get that “loose end” out of the trading criteria for the coming week

So let’s look at some

If the market is going to go down- it will fill it on the way down In this scenario, since the gap is less then 60 pips away – it is easier to fill it now before any continuation – IF it is going to go up. If the market is going to go down- it will fill it on the way down

This is an OVER the weekend Gap caused by after hours trading

How to trade them They are hard to trade since no one knows WHEN they will be filled It is best to use the information to stay OUT OF A TRADE! Or to use it as a target when the reversal comes. This way you know that they are trying to close the gap Some Gaps do not get filled for months …but sooner or later they will!

As of May 26, 2009

Advanced Traders could take the trade back to the gap

Thank You