V.9:3 (129-130): Another Chance With Breakaway Gaps by John Crane
Product Description
Another Chance With Breakaway Gaps
by John Crane
Suppose you've been monitoring the market for weeks, faithfully updating your daily charts and studying your favorite indicators. The criteria for your trade are met and, at long last, a buy signal is generated. You know that once resistance is broken, the ensuing move will be substantial.
The next morning you place a call to your broker, only to hear that the market gapped higher on the open, soaring to levels somewhere in a neighboring galaxy. This was definitely not a part of your well-developed trading plan. You then decide to wait for the market to pull back during the day to enter at a more attractive price. But the market doesn't pull back. Disheartened, you cancel your order and begin to search for another market with similar profit potential.
Does this scenario sound familiar? It happens to even the best and most experienced futures traders. When a market gaps to higher (or lower) levels, many traders will hesitate to enter at even higher (or lower) levels than originally planned and often miss an explosive move in the market. But occasionally, you do get a second chance to enter the trade before the explosive move by the judicious use of breakaway gaps.
Suppose you've been monitoring the market for weeks, faithfully updating your daily charts and studying your favorite indicators. The criteria for your trade are met and, at long last, a buy signal is generated. You know that once resistance is broken, the ensuing move will be substantial.
The next morning you place a call to your broker, only to hear that the market gapped higher on the open, soaring to levels somewhere in a neighboring galaxy. This was definitely not a part of your well-developed trading plan. You then decide to wait for the market to pull back during the day to enter at a more attractive price. But the market doesn't pull back. Disheartened, you cancel your order and begin to search for another market with similar profit potential.
Does this scenario sound familiar? It happens to even the best and most experienced futures traders. When a market gaps to higher (or lower) levels, many traders will hesitate to enter at even higher (or lower) levels than originally planned and often miss an explosive move in the market. But occasionally, you do get a second chance to enter the trade before the explosive move by the judicious use of breakaway gaps.
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