This Gap Trading Strategy Prints You Money (Gap Up, Gap Down, Gap Fill) transcript

in this video we're going to show you how to trade price gaps like a pro learning how to trade gaps correctly is a cheat code that most Traders will never discover as always please hit the like button as it allows forour team to continue to produce more free content on YouTube what is a gap up a gap up is when price opens higher than the previous day's close you have your candle Clos and Market close followed by a gap up of price once the Market opens what is a gap down a gap down is when price opens lower than the previous day's close you have your candle close and Market close before a gap down occurs once the Market opens price gaps often occur due to news releases outside of regular trading hours that cause swings in price what is a gap fill a gap fill is when price returns to the pregap price you have your Gap up and price isn't able to sustain the higher price and reverses back to the pregap price you have your gap down and price isn't able to sustain the lower price and reverses back to the pregap price so why do Gap fills occur a gap fill occurs when the driving force behind what caused the Gap was based on irrational or emotional factors and not based on true fundamental factors if you see a gap up and the reason for the Gap up was based on something credible like a surprise massive beat in earnings the high High gapped up price will sustain and even possibly go higher if you see a gap up based on just a hype up news piece or even fake news then the higher gapped up price represents an overvaluing of the stock also known as overbought and the price will correct back to the pregap price so that the stock is back to being fairly priced now a key Point The Wider the Gap is the more overbought and overvalued the stock is which can trigger a more drastic move in the opposite direction wider gaps make for better Gap fill reversal trades going in the opposite direction if you see a gap down and the reason for the gap down was based on something solid like a surprise Miss in earnings the lower gapped down price will sustain and even possibly go lower if you see a gap down based on just a hit piece or even fake news then the lower gapped down price represents an undervaluing of the stock also known as oversold and the price will correct back to the pregap price so that the stock is back to being fairly priced Again The Wider the Gap is the more oversold the stock is which can trigger a more drastic move in the opposite direction wider gaps make for better Gap fill reversal trades let's now dive into the strategies section combining price gaps with key levels these reversal points give you your key resistance Zone price then forms a gap up and enters the Zone which presents a short trade setup notice how wide this Gap up is and the wider the Gap the more overbought the stock is the reason this is a great short trade setup is because you have short sellers looking to enter short trades at the zone as well as the price of the stock being overbought and overpriced as always you need to look for an intraday Trend change confirmation before taking a short entry now along the bottom these reversal points give you a key support Zone you have a gap down into the support Zone with multiple long with candles and price being oversold which presents a long trade setup another gap down into the support Zone and price being oversold which presents a long trade setup let's show this again this reversal Point here gives you your key support level as price comes back down you have a gap down slightly past the Zone which is a false breakout and traps a lot of breakout short sellers false breakouts can trigger drastic moves in the opposite direction due to all those breakout short sellers having their stop losses hit once price reverses once you had the break of trend line and higher high that is your Trend change confirmation and is when you would look for long trade entries this is a quick In-N-Out trade we took on the paler stock these reversal points here give you your key support Zone as price comes back down you add a gap down into the Zone which presents a long trade opportunity so you need to look inside of this area here but on a lower intraday time frame for a trend change confirmation so let's pull that up on the left is the paler daily time frame we just looked at and on the right is the paler intraday time frame this trade setup area here is this same area here you have a falling wedge pattern and once it breaks above with a gap up you would look for a long entry point using our entry strategy your exit Target would be this Zone here now here's where the magic happens combining price gaps with key levels and with Ballinger Band Breaks before we continue we want to hear from you tell us in the comments below right now what video topics we should cover next as always please hit the like button as it allows for our team to continue to produce more free videos on YouTube these two reversal points give you your wide support Zone as price comes back down you have a very wide gap down which represents a very oversold price you also have multiple candles breaking outside of the Ballinger band which further confirms the price is extremely oversold once you have an intraday Trend change confirmation you would take a long entry using our entry strategy let's show this again these two reversal points give you your wide support Zone price then gaps down into the zone you also have a candle that breaks far outside of the Ballinger band which further confirms the price is extremely oversold once you have an intraday Trend chains confirmation you would take a long entry this is the Tesla stock trade we took using this exact strategy these two reversal points give you your key support Zone that is also a a weekly Zone this zone is also inside of the 50% to 61.8% FIB Zone making it a highquality area of value price then gaps down into the zone and breaks outside of the Ballinger band representing an oversold price and presents a long trade opportunity once you have an intraday Trend change confirmation you will take a long entry using our entry strategy your target one is this reverse Point here this is the Shopify stock trade we took using this exact strategy these reversal points and false breakout give you a key resistance Zone as price comes back up you had a wide Gap up into the key Zone which presented a short trade setup price also breaks outside of the Ballinger band which represents an extremely overbought price once you have an intraday Trend change confirmation you would take a short entry using our entry strategy your target one is this reversal Point here this is the Vimeo stock this reversal Point gives you your key resistance Zone as price comes back up you put a wide Gap up into the key Zone which presented a short trade setup price also breaks outside of the Ballinger band which represents an extremely overbought price again once you have an intraday Trend change confirmation you would take a short entry now there are many Advanced methods we use to find intraday Trend change confirmations but here's one simple way this is the Disney short trade we took these reversal points give you your key Zone as price comes back up you had a gap up into the key Zone which presented a short trade setup price also breaks outside of the Ballinger band which represents an extremely overbought price so you need to look inside of this area here but on a lower intraday time frame for a trend change confirmation so let's pull that up on the left is the Disney daily time frame we just looked at and on the right is the Disney intraday time frame this setup area here is this same area here you had a head and shoulders reversal pattern and your entry could have been on the break here or at the pullback but a better entry is using our entry and exit strategy so moving on a gap fill completion at a key level you have a clear strong moving uptrend so you want to trade with the trend these reversal points give you a key level this is your Gap up here price comes back down and fills the Gap right at the key support level which presents a long trade setup the reason this is a high quality trade is because the Gap fill completion means prices back to being fairly priced so value buyers will step in at this level short sellers will also close trades at this level knowing the Gap is filled and price no longer being overbought key support level buyers will also open long trades at this level all of this creates an area of Confluence and presents a highquality long trade setup let's show this again these reversal points give you a key level this is your Gap up here price comes back down and fills the Gap right at the key support level which presents a long trade setup once you have an intraday Trend change confirmation you would take a long entry using our entry and exit strategy so what we've covered in this video is only scratching the surface there is a series of Premium trading guides that work in combination with this video and are required to have to fully grasp these Concepts they are available on our site at WIS trade.com the link is also in the descript deson below tell us in the comments below right now what topics we should cover next be very specific make sure to hit the like button as it allows 4our team to continue to produce more free content on YouTube