There are 5 basic ways to trade a Gap or any line. In this video, I discuss two ways to enter the market using a Gap before I make the trade plan. The Gap entry techniques by themselves are of little use, but if we make a few distinctions in market structure and the process of a swing cycle, they can become functional.
Swing cycles have a process that they go through. As long as we understand that process we can view Gaps in the light of where they happen in that process. I'm going to focus these two Gap entry techniques in the lower portion of the reaction leg at the bottom pivot of a swing. The Gaps are what make up the pivot portion of the swing.
If you observe markets and swings you will often see this distinct pivot portion of a swing, it looks like a U at the bottom of a reaction leg as the buyers wrestle control back from the sellers.
Some solid pieces of advice in there for our community. We've selected this video for Editors' Picks!
ShaneBlankenship
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@TradingView, Thank you for highlighting the post. It's good that this one took less time to get stopped out on than it did to make it.
TradingView
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@ShaneBlankenship, hahaha, that happens. Losing trades are part of the deal, like it or not. :)
basictradingtv
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Gaps are pretty tricky and that's why I prefer to trade higher timeframes because even then a gap of +/- 10% doesn't matter at all!
ShaneBlankenship
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@basictradingtv, Thanks for the comment. It is good to find ways to manage what we each find tricky. Many things I used to think were tricky have become very useful to me after I opened up to develop more understanding of them. Mostly what is tricky for all of us, is handling the changing unknown environment of markets.
The gap between what is and what MIGHT be. A subtle change of language that stops us falling victim to confirmation bias, one of the biggest reasons why many otherwise competent traders aren't profitable.
ShaneBlankenship
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@StewySongs, I'm happy you noticed some of the subtleties of what I'm saying. I constantly work on making methods, market structure, and trading rules as objective as possible so I don't fool myself too much. Never trust anybody, especially yourself.
We've selected this video for Editors' Picks!