Hot Pick Of The Day

[New-born baby]

Gap Theory

I think I read somewhere that 95% of gaps fill. Even so, that's 5% that won't =1 in 20. Not something to be counted on.

Good point, NOshadylady. Not every gaps fills, but most do. So it is kind of like being close to a rattlesnake. It most likely will bite, but sometimes they slither away. And since no trading system is 100% accurate, a 95% rating is pretty good, and worth considering.

Last week was a VERY good week for the market. That may have had an effect on keeping MFLX from filling the gap. Compare Runners' chart on NGPS. January 24 it gapped up, and January 26 it filled the gap. Weak market helped hold her down.

Remember Trader's mag say 54% of gaps fill in 10 days or less. Take that into consideration, and perhaps place stops to prevent the loss of profit.

I've had a gapper fill on me. That's why I said, "My experience is, if the price falls through the floor, pretty accurate."

Best to you always!

[spikefader]

Thanks NoShady!

Yes, one never knows. This is why I love stops (disregarding non-stop systems I’m experimenting with). If I’m wrong about a trade, I get out and it doesn’t hurt too bad.

As Newborn says, 95% is something to be called an edge. The problem is WHEN is it an edge? If it’s one of the 95%, WHEN will it fill? What kind of price movement will occur before it fills? If I trade a gappy chart on the long side, how long will I be on the wrong side? If I trade a gappy chart on the short side, will the trade bite me on the rear side and lead to, God forbid, a margin call? See, no matter what kind of edge exists in the world of trading, it’s still all about timing. All one can do is attempt to time an entry with the gap in mind, allow price the opportunity to fill a gap, and keep downside within limits. It’s just the same as giving price the opportunity of bouncing at gap support. No guarantee it will hold, but trading long at gap support is attempting to put the ‘edge’ on your side. Same stuff coming to the front of my mind: support is support until it isn’t; resistance is resistance until it isn’t; a gap is a gap until it isn’t. The how and the when and the why may be far beyond my own full and true understanding, but that’s not that important anyway. Must I know why the sun comes up in the morning to benefit from it’s light? Nope, it’s going to occur completely independently of my human understanding. Yet I’ve got to be smart enough to know that the sun’s light can be harmful and there are times when one must protect myself against it otherwise risk getting badly sunburned and develop cancer cells that may eventually kill me. Same with the market, I don’t have to understand why price moves in the direction it does. The why doesn’t matter. What matters is knowing when it can be harmful to me and when I must protect myself against it otherwise risk getting burnt and killed. Unfortunately the market does not share the consistent and reliable timing that the sun does . For this reason trading is all about knowing the risk, preparing for it, doing all you can to protect against it, and employing a strategy that attempts to take advantage of any number of ‘edges’ we can identify about price patterns, support, resistance, channels, or even things as laughable as stock price relative to moon behavior. Fact is, if it’s a highly reliable statistically significant edge then it’s worth considering. Are gaps such a thing? Absolutely. But know when they can burn and plan accordingly. Know when they can be beneficial and plan accordingly. Give a gap a chance, and if it blows it, get out. Wait for another ‘edgy’ opportunity, give the gap another chance, and if it blows it again, get out. Eventually, this type of behavior will result in a great entry, a happy trade journey, and a wonderful profit. But like all other trades, it’s all about timing.

[dmk112]

Thanks NoShady!

Yes, one never knows. This is why I love stops (disregarding non-stop systems I’m experimenting with). If I’m wrong about a trade, I get out and it doesn’t hurt too bad.

As Newborn says, 95% is something to be called an edge. The problem is WHEN is it an edge? If it’s one of the 95%, WHEN will it fill? What kind of price movement will occur before it fills? If I trade a gappy chart on the long side, how long will I be on the wrong side? If I trade a gappy chart on the short side, will the trade bite me on the rear side and lead to, God forbid, a margin call? See, no matter what kind of edge exists in the world of trading, it’s still all about timing. All one can do is attempt to time an entry with the gap in mind, allow price the opportunity to fill a gap, and keep downside within limits. It’s just the same as giving price the opportunity of bouncing at gap support. No guarantee it will hold, but trading long at gap support is attempting to put the ‘edge’ on your side. Same stuff coming to the front of my mind: support is support until it isn’t; resistance is resistance until it isn’t; a gap is a gap until it isn’t. The how and the when and the why may be far beyond my own full and true understanding, but that’s not that important anyway. Must I know why the sun comes up in the morning to benefit from it’s light? Nope, it’s going to occur completely independently of my human understanding. Yet I’ve got to be smart enough to know that the sun’s light can be harmful and there are times when one must protect myself against it otherwise risk getting badly sunburned and develop cancer cells that may eventually kill me. Same with the market, I don’t have to understand why price moves in the direction it does. The why doesn’t matter. What matters is knowing when it can be harmful to me and when I must protect myself against it otherwise risk getting burnt and killed. Unfortunately the market does not share the consistent and reliable timing that the sun does . For this reason trading is all about knowing the risk, preparing for it, doing all you can to protect against it, and employing a strategy that attempts to take advantage of any number of ‘edges’ we can identify about price patterns, support, resistance, channels, or even things as laughable as stock price relative to moon behavior. Fact is, if it’s a highly reliable statistically significant edge then it’s worth considering. Are gaps such a thing? Absolutely. But know when they can burn and plan accordingly. Know when they can be beneficial and plan accordingly. Give a gap a chance, and if it blows it, get out. Wait for another ‘edgy’ opportunity, give the gap another chance, and if it blows it again, get out. Eventually, this type of behavior will result in a great entry, a happy trade journey, and a wonderful profit. But like all other trades, it’s all about timing.

Nice write up spike... did i push your buttons or something? hehe

[spikefader]

Nice write up spike... did i push your buttons or something? hehe

lol ya, maybe. thanx fer that though!

[RL]

Here Is my contribution

ccj- Bcause It Is the largest source of high quality uranium In the world.

bone- because It looks good to me.

Sure hope that was not ment to be sarcastic when you said you were like a hillbilly about stocks New Born regarding my question on all the Intrest In ngps.
HOPE WE ALL HAVE A GREAT WEEK

[New-born baby]

RL--Thanks alot.

RL,

I thank you for your posting your picks. After the great week you had on BillyJoe's portfolio thread, I thought you'd be just the man to post here.

As far as the picture of Andy Griffith and Barney and Gomer, it was in no way meant to be offensive towards you. I just came into this new image importing tool, and I am having too much fun importing pictures. I intended to say that I myself am inexperienced in the market ("hillbilly") and could use an education from you (who did rather well last week in your stock picks). I don't consider Barney, Gomer and Andy to be very savvy in the financial markets. I was trying to say, "RL, you had a great week in BillyJoe's portfolio. Why don't you teach a hillbilly like myself, someone who is not very savvy in the financial market, how to better invest our money. What pick is better than NGPS?"

Please do not take offense at my comments. I apologize if my comments were offensive to you. My family is from Kentucky (both sides), and we call ourselves 'hillbillies.'

Thank you again, and best investing to you, and God bless,

[Runner]

RL,

I thank you for your posting your picks. After the great week you had on BillyJoe's portfolio thread, I thought you'd be just the man to post here.

As far as the picture of Andy Griffith and Barney and Gomer, it was in no way meant to be offensive towards you. I just came into this new image importing tool, and I am having too much fun importing pictures. I intended to say that I myself am inexperienced in the market ("hillbilly") and could use an education from you (who did rather well last week in your stock picks).
Please do not take offense at my comments. I apologize if my comments were offensive to you. My family is from Kentucky (both sides), and we call ourselves 'hillbillies.'

Thank you again, and best investing to you, and God bless,

Hey watch out, I'm from the back woods of Alabama!!!

[New-born baby]

AL is a great place

Hey watch out, I'm from the back woods of Alabama!!!

Alabama is a great place. I like Gulf Port,Buloxi, Mobile, Montgomery and Birmingham. I took my parents shark fishing off the coast of Buloxi after I graduated from college. I'd love to do it again.

[Runner]

We got lots of red clay and pine tress. Most think of us as Red necks with pick’um up trucks… I’s from a small town love the outdoors and fish’in. My folks moved to Tampa and my brother wants to take me shark fishin, but just have not been able to get down there. When I go fishin I’m know as a perch jerker. This is one who fishes from the banks!! lolo

[IIC]

Alabama is a great place. I like Gulf Port,Buloxi, Mobile, Montgomery and Birmingham. I took my parents shark fishing off the coast of Buloxi after I graduated from college. I'd love to do it again.

I musta missed it all...but my Grandfather was from KY and my Grandmother grew up there...My Dad is a Kentucky Colonel(but he was born in West Hollywood CA...I was born in SF, CA)...and some long time distant relative(my Dad keeps track of 'em all) was a waitress for Col. Sanders...gave him a loan so he could expand.

There is a family reunion back in KY every year...but I never went...but my parents have gone a few times.

My Dad likes to meet people he never knew...Me, I'll pass.

My Grandfather always said..."Just because they are relatives doesn't mean you have to like 'em"...But the main reason I never went is because I don't know these people...I can stay home and meet new people.

[New-born baby]

I musta missed it all...but my Grandfather was from KY and my Grandmother grew up there...My Dad is a Kentucky Colonel(but he was born in West Hollywood CA...I was born in SF, CA)...and some long time distant relative(my Dad keeps track of 'em all) was a waitress for Col. Sanders...gave him a loan so he could expand.

There is a family reunion back in KY every year...but I never went...but my parents have gone a few times.

My Dad likes to meet people he never knew...Me, I'll pass.

My Grandfather always said..."Just because they are relatives doesn't mean you have to like 'em"...But the main reason I never went is because I don't know these people...I can stay home and meet new people.

IIC,

What part of KY? My clan is from Glasgow and Horse Cave and Bear Wallow and Summer Shade. All these are near Mammouth Cave, KY. I'd be interested to know where your family has their reunions.

[Runner]

Oh, I should also mention I was born in Chicago So South side, ran away and joined the U.S. Army. My recruiter guy said if I learn how to jump out of airplanes I’d get an extra 110.00 per month. I said what, where do I sign… Little did I know what I just got myself into? Learned a lot from the military. Most of my time was with the 82nd Airborne Division. I was chosen to be on a Recon team. This was fun during peacetime, but another story in wartime….

Ok now you know a little about runner, what about you?

[IIC]

IIC,

What part of KY? My clan is from Glasgow and Horse Cave and Bear Wallow and Summer Shade. All these are near Mammouth Cave, KY. I'd be interested to know where your family has their reunions.

My Grandfather was born in Laurel County KY...in 1891. The reunions are in different places...One year they were in AL. I guess they are all over the South???

My Grandmother was born in Cincy...but moved to Louisville I believe. She was in the first class that accepted women at William and Mary in VA. But she did not graduate. She came out to CA in the early '20's with my Great Grandparents...who I never knew...My Grandfather who was 11 years older and divorced(Oh My!!!) followed her out here...The rest is history I guess.

[IIC]

Oh, I should also mention I was born in Chicago So South side, ran away and joined the U.S. Army. My recruiter guy said if I learn how to jump out of airplanes I’d get an extra 110.00 per month. I said what, where do I sign… Little did I know what I just got myself into? Learned a lot from the military. Most of my time was with the 82nd Airborne Division. I was chosen to be on a Recon team. This was fun during peacetime, but another story in wartime….

Ok now you know a little about runner, what about you?

Well, there was a star in sky...somewhere to the North on April 9, 1953. I was born at Children's Hospital in San Francisco...which makes sense since I was just a kid at that time...LOL

Moved to Seattle, WA and then to Los Angeles...near what was to become Marina del Rey when I was 2. Grew up in Culver City, CA near West LA...w/ a stint in Houston for 9 mos in 1961...back to Culver City.

Went to college at U. of Nebraska and U. of Hawaii. Lived in various LA suburbs since.

Got married at 26 in 2/80. Divorced in 1984...remarried in 6/86 and still together. Have one son from the first...that's it.

You'll have to buy the autobiography for the details

[billyjoe]

New-Born,
Spent two great vacations camping out with the kids when they were little at Mammoth Cave. Hope I'm not too decrepit to tour the caves again some day. The stories about extracting salt peter from the caves to make gun powder in the early 1800's was really interesting. Everything they left behind is still in there like it was yesterday. When it's nearing 100 degrees, the 55 degree caves are nice. Also, for those not familiar with the area, you can see the corvette museum and tour the corvette assembly plant in Bowling Green, Kentucky.
billyjoe