To view the 8 minute video presentation on the Open Gap Trading Technique recently made at the Dallas chapter meeting of AFTA, click on the link below. Be patient - the file may take 5-10 minutes to fully download. For multiple viewings save the file to your hard drive, then double click to start.  Click Here!

An opening gap occurs when the market begins the trading day at a price other than where it closed at the end of the previous session, resulting in a "gap" in price when viewed on an intraday chart. If this discrepancy is unusually large, it is likely that new information has entered the marketplace, and price activity will tend to trend even further in the gap direction. If the difference between closing and opening price levels falls within a more reasonable range, there will be a tendency for the market to trade back into the gap area. The strength of this tendency is indirectly proportional to the magnitude of the gap. The narrower the gap, the stronger the tendency. Very small gaps are not even tradable. Very large gaps are less likely to close, and contain the potential to quickly move even further away from the gap level, marking the beginning of a strong trend move. These kinds of gaps are referred to as "Breakaway". On the other hand, the kind of gaps that have a higher probability of closure, and the sort that we are most interested in for the purposes of this article, are referred to as "Common" gaps.

Breakaway Gap		Common Gap
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