Peter passed away just recently.

• forex scalping strategies that work;
• Gap Strategy Tool - Helping you Master EasyLanguage.
• Add to Cart failed..
• Discussion;
• binary options signals nadex!
• Scott Andrews - S&P Gap Study 2004-2010.
• is options trading better than stocks.

Don't panic in down markets. Think outside the box. The book is also a big ad campaign for Investor's Business Daily Newspaper. This one is more focused on market timing and pivot points. What happens when real people are taught a system to make money on Wall Street.

Easy read. Ideas like this can help your overall trading strategy. Check out Scott's website. Google "The Gap Guy". Does an excellent job of training your eyes on stock patterns and anticipating what comes next.

Well written. The Montreal Exchange, where options are traded in Canada, has excellent materials and webinars explaining how options work. Readers should already understand options before reading this book. I skimmed this book which is a great resource for understanding options. William W. Uncanny insight into how future dividends, stock buy-backs and debt reduction would play an important role going forward. This holds up in long-term independent backtests from several sources eg. This simple strategy is extremely easy to execute manually, with no discretionary judgement necessary and takes just 15 minutes a day with no additional screen time after the open.

Betting opportunities arise almost once every trading day, adding up to an estimated number of to trades per year. The strategy seems to be uncorrelated to other portfolio assets and strategies and could easily be added to a combination of investments and strategies requiring only temporary margin. Edit after several months of live testing: Correlation seems to be an issue in real trading and the strategy had severe losing streaks in concert with drawdowns in other strategies — more details at the end of this post.

There is little evidence, that such high rate of returns over longer time periods exist in the real world maybe with the exception of some extremely lucky examples or the untrustworthy claims of strategy sellers. Things like a non-normal distribution of returns or a serial correlation between losses leading to long trends of underperformance would derail it quickly and volatility would be huge, even if the statistics were spot on.

Add to that some imperfections and mistakes in the execution of the strategy which always happen in real trading and we quickly return to more conservative bet sizes. Unconstrained bet sizing is the source of many of the myths surrounding day-trading as a means to make a living off a very small capital base. It might work for a while, but it is unlikely to be sustainable over any period of time.

InvestiQuant Company Profile: Valuation & Investors | PitchBook

A simple rule of thumb is often more sensible. That certainly seems much more realistic. It is certainly not a very difficult strategy. As it is easily programmable, hordes of algos should take this obvious advantage out of the market in no time, or not? Robustness may be an issue. There is no real reason why the edge may not suddenly vanish or cycle on to a different strategy.

The best concepts tend to work everywhere eg. No basic edge.

Gap Trading Strategies from Scott Andrews

It needs extra rules to make money. This is quite typical for a mean reversion strategy: the size of profitable trades is defined by the size of the gaps while losses are unconstrained: rare, but large, losing trades will bring down the profitability of the strategy. A more nuanced return profile. In live trading many trades likely will not hit the profit target nor the stop loss, resulting in a lower average profit and loss than the initial risk that was taken on each trade and therefore a lower overall return.

The strategy is well known, but other ideas trading the opening, that often trade in the opposite direction from the same entry point, may be more popular. It follows an opposite concept to the gap fade, as it tries to capture a trend that develops when price breaks out of an opening trading range. ORB enters in the direction of the opening gap right around the price at which the gap fade stops out at a loss. It can also be a continuation of the gap fade, when the closing of the gap occurs right after the open and the move continues in a trend counter to the initial gap, triggering a breakout signal.

From my own observations, I found a high number of false breakouts occurring at several time periods 15 minute, 30 minute and 1 hour opening ranges.

Additionally intraday trend strategies face a serious conceptual problem: At the heart of trend-following lies the concept of letting your winners run while cutting your losses short. Several recent discussions and strategy statistics, I came across, point to the classic ORB as having been an unprofitable strategy after cost in recent years.

Also, the strategy is widely available as a commercial strategy package, which is never a good thing. This entry point and direction exactly coincide with the exit of the gap fade strategy. Gap continuation strategies , similar in concept to ORB, trade in the direction of the gap — stop runs on these strategies will essentially result in a closing of the gap, as stops are commonly placed on the opposite side. Other variations :. An explanation for the current superiority of a gap fade strategy could be, that it takes advantage of an over-crowded ORB strategy, or other trend trading strategies around the opening range.

InvestiQuant Valuation & Funding

If so, it can be expected to be an unsustainable advantage as popularity shifts towards strategy variations that work and causes them to work less well in the future. A pure gap fading strategy seems to be too simplistic, and easily implemented algorithmically, to be sustainable over the long run.

As the downside is small and the statistics are enticing with little additional effort involved I run a daily check of my portfolio around the US open anyway , I have decided to run a real money test with a small allocation to find out what is behind this. I will keep track of the performance at the end of this post.

Exploring The universe of strategies using the market open

When the statistics drop below break-even for a period of more than a month, I plan to stop the strategy. To reach the performance described above it is necessary to use screens to identify the gaps that are most likely to close, and use stop losses to protect against large trending moves as well as define the initial risk. I only use two essential screens to avoid over-optimization as much as possible and add some details of my own around entries and exits.