A picture is worth a thousand words and nothing will wake you up like a morning breach.
The gap has the amazing ability to take the breath away from swing traders and long-term investors as they engage in pre-market trading activity and early in the morning.
In this article, we will discuss how to exchange morning gaps in the open air and how to take advantage of these chaotic situations.
Definition of Morning Gap
The morning gap is one of the most profitable patterns that many professional day traders use to make the most of their trading profits. The morning gap is a by-product of the accumulated trading activity that occurs overnight due to an economic number, a profit launch, or a company-specific event. 
Day Trading Morning Gaps
Now let’s delve into the structure of the gap. If you listen to some of the “gurus,” they will begin to describe a large number of gap types present in the market.
Like the rest of Tradingsim, we will take a simple approach to analyzing the market and focus on two types of gaps: full and full.
We have a complete gap when the price never defaults on its days before closing.
Fill in the gap
A gap occurs when stocks are open, but at some point in the day they overlap with the previous days closed. 
Most of the gaps are filled at some point in the day. However, if stocks are very strong, it can take days and even weeks before they fill their void. They are also called separable gaps.
Gaps are a lot of fun to negotiate if you know what you’re doing. Conversely, if you are away from home to make fences to fences, you can hurt your feelings.
Gap negotiation techniques
Below I will list 4 techniques I see playing every day and you can get what you deem appropriate.
Strategy # 1: Get tired of the first candle
The first 5-minute bar can tell you a lot about the strength of actions. When I first started, I would only buy the leak at the first 5 minute bar.
At times, this worked very well and I would be able to catch the lion’s share of a 15 or 30 minute open race.
This was the dangerous part where I sincerely believed that every action should work like this in every purchase. As you know from trading, things don’t always work out as planned.
While I would land some of these in a row, at some point the nasty investment would come to hit me in the face. Now, that’s not a little small, it’s cruel.
For example, look at the chart below.
The hardest part is that the blow to the face comes after you have had some success. So if you don’t have a stop, this is where hope comes into play, as you still live in the past.
So what to do?
I learned to wait a bit after the market to let the graphics set up. I am no longer in a hurry looking to quickly put myself in a position. So sometimes I miss one that works, but it also allows me to avoid the pitfalls of jumping too early and then enduring life dearly as stocks move down.
The last thing I will say about this is that buying the first chandelier after the gap is also the challenge of where to put your stop. You can place it under the bottom of the chandelier and this will work sometimes.
I would have trouble if the stocks closed close to the minimum of the candle. I would freeze because I needed to get out, but this half-second hesitation would cause losses during the day.
The other option you can take is to reduce this level of weakness when it occurs in the morning. I personally don’t take this approach, but see if it works for you.
Strategy no. 2: Wait for the flag
This is my favorite goto for morning settings. Basically, I expect stocks to skyrocket and then I like to see consolidation near the high. This consolidation should be carried out between 4 and 8 bars.
I also like that the stocks don’t pull too far back towards the strong belfry of the chandelier. The last thing I like to see is that stocks remain above the ten-period EMA, so it’s clear that stocks continue to trend strong.
This for me presents a nice graphic with clean chandeliers.
Then I hope the stocks make a run for the most of the day, but you have to do it between 9:50 and 10:30 at the latest. Once past 10:30, stocks usually crawl without any clear direction.
Strategy no. 3: wait to fill the gap
This is another strategy that works for other traders, but I still don’t have to master it.
This is where stocks are expected to close their previous days again and fill the void. Then wait to see a force signal and enter the position in this movement.
Then place a stop below the bottom of the chandelier.
The most difficult part of this strategy is setting the price target. I have noticed that these setbacks far outweigh the highs or lows of the morning.
Most professional traders buy the withdrawal and then sell the new test from the morning high.
How can Tradingsim help?
Trading gaps is not an easy feat as it requires great discipline as you are trading the most volatile period of the day.
You can trade these three configurations at Tradingsim to find out which system best suits you or you can work on your creation.
- Rockefeller, Barbara. 2004. Technical analysis for mannequins. Figure 7-3 Price Gap. Wiley Publishing Inc.
- Gap pattern. Wikipedia
POPULAR LESSONS IN THE COURSE: Basic concepts of daily negotiation
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