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> ----- Original Message -----
> From: "Prosper" <brente@xxxxxxxxxxxx>
> To: "Real Traders" <realtraders@xxxxxxxxxxxxxxx>
> Sent: Tuesday, June 12, 2001 7:57 AM
> Subject: [RT] Gaps! How do you deal with them?
>
> > Gaps seem to be one of the things that messes up my trading the most these
> > days. Just when I think that I'm going to get going short the next day, it
> > gaps down and then proceeds to go flat for half the day, throwing my game
> > plan off for the day.
> >
> > I was wondering if any of you have found effective ways to deal with gaps?
> > Thanks.
> >
> > Prosper
Greetings Prosper:
For those kind of gaps that occur right after a rising and/or declining wedges,
my experience tells me that it is a double confirmation of the correct
identification of the wedge pattern. And the trade should be taken on that bar.
More often than not in the past, I had the patterns correctly identified, along
with indicator divergences. Then I hesitated the following day when the breakout
was accompanied with a gap. Granted that the risk exposure is far more greater
than any other kind of patterns. But the reliability of the wedge patterns is
the highest amongst any other kind of patterns, IMHO. I have had missed out
quite a few of these swift and powerful impulsive moves in the past. Inherently,
it is the most dangerous and profitable pattern. Regards
Have a good one
Jeff Harteam
Hong Kong
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