Arch Public

Gap Strategy - RTY/M2K

Sale price$7,795.00 0.0

An initial gap trade at the open of the Dow Jones index is a straightforward yet effective strategy that capitalizes on price discrepancies resulting from market activity during non-trading hours. The concept revolves around the ‘gap’ that occurs when the market opens at a price significantly different from its previous day’s close. This disparity creates an exploitable opportunity for traders.

The process begins with analyzing the closing price of the Dow Jones index from the previous trading day. When the market reopens, if the opening price deviates substantially from the prior close, it creates a visible gap on the price chart. The essence of the strategy lies in identifying and acting upon this gap.

Our Gap Strategy, employing this approach, aims to capitalize on the momentum generated by the gap, taking a position in the direction that aligns with the gap’s direction. For instance, if the market opens higher than the previous close, traders might consider taking a short position, anticipating the price to move lower looking to fill the gap. Conversely, if the market opens lower, traders may take a long position, expecting the price to converge and fill the upward gap.

This strategy is characterized by its simplicity and speed, making it attractive to traders seeking quick opportunities at the market open.

Tier: Basic

Tier
The Gap is (Arch Public’s) simplest strategy and gave me the opportunity to get comfortable using automation 30 minutes a day and I’m done…

Don R. 

A stress-free way to invest! Arch Public's automation takes the guesswork out of trading.

Breakdown

  • 1.27 Profit Factor
  • Simple and speedy. The Gap Strategy trades only once a day at the open.
  • Risk management, stop losses, and capital compounding included in the internal parameters.
  • Trades take no longer than 30-90 minutes each day.
Gap Strategy Sale priceFrom $15,000.00
Trade Count

0-5 Per Week

Markets

S&P 500, Nasdaq, Dow Jones, and Russell 2000

Currency

USD

Risk

User-Driven

Coefficient of Variation

41.2%

Trading The Gap - 101

A gap occurs when the market price of a security jumps to another price level, either higher or lower, where little if any trading has taken place. A good example is an unforeseen comment from a senior Fed official regarding the direction of interest rates. Once the comment hits the newswires, markets may react immediately, with market makers pulling their bids and offers. This may cause a price gap from the last price at $25.20 to $26.50, for example.

Gaps are frequently seen in price charts of almost every security. In stocks, the most frequent and significant gap occurs between the daily close and open of the exchange. In FX markets, since they operate 24 hours a day, a gap may not be visible (possibly on a one-minute chart) but instead appears as a very long candlestick covering the gap in price. (FX markets may experience gaps over the weekend, between the Friday New York close and the Sunday Asia opening.)

Price gaps can bedevil traders, especially if they’re on the wrong side of the gap. The most attractive trading opportunity with gaps is to go long or short as the market moves to close, or fill, the gap. a reasonable gap trade strategy would be to sell the instrument that has opened higher than the close.  The price opened at 26.50, a short position was opened in this example (sell short) in anticipation to close the gap...(the space between 25.20 and 26.50).  If the market's underlying instrument we are trading continues in the opposite direction of the gap we cut our losses quickly and move onto another trade set up for the day.

How it works

1) Download Strategy

After completing your purchase you'll create an account on Arch Public. From there you can download your Strategy and several other valuable resources.

2) Set up TradeStation

We've partnered with TradeStation and their award-winning platform. When you sign up using our link you'll receive 50% off fees, forever. Once your TradeStation account is up and running you will be able to install the Strategy.

3) User-Driven Automation

From within the TradeStation platform you'll be able to adjust your risk parameters and turn the automation on or off.

Included With Purchase

Excitement Included

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Customer service

We are available from monday to friday to answer your questions.

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White Glove Delivery

One-on-one set up on your platform of choice.

Risk Acknowledgment – Engaging in futures trading involves significant risk, especially when trading on margin. Such activities may not be suitable for everyone, given the high level of risk involved. The leverage provided can both amplify gains and losses. Prior to participating in trading, it’s crucial to evaluate your investment goals, experience level, and risk tolerance carefully. There is a real risk that you might lose part or all of your initial investment, so you should not invest funds that you cannot afford to lose. We strongly advise that you fully understand all the risks related to trading and, if necessary, seek guidance from an independent financial advisor.

Regulatory Compliance – Only individuals who are registered with certain regulatory bodies are authorized to offer advice or conduct transactions in futures.  These bodies include the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and state regulatory authorities, each classified as an “Intermediary.” The Arch Public, its affiliates, or any associated individuals involved in creating and maintaining our offerings are not registered as Intermediaries. We encourage our clients to consult with a licensed investment professional before engaging in any trading strategies or transactions. We do not guarantee that the outcomes discussed herein will be achieved, nor do we claim that our past performance is indicative of future results.

Educational Purpose Only – Information provided by The Arch Public is for educational purposes and should not be taken as personalized investment advice. Investment decisions should always be made based on your specific financial needs and circumstances, with the counsel of a professional advisor. Engaging in trading without thorough understanding and professional advice may be detrimental to your financial health.

CFTC/NFA Disclaimer –Simulated or hypothetical trading scenarios have limitations and may not accurately represent real trading outcomes. Such results do not reflect actual trading and may not capture the impact of market factors such as liquidity. Hypothetical trading does not involve financial risk, and no simulated trading record can account for the risk of actual trading. The Arch Public makes no claims that any account will achieve profits or losses similar to those discussed.

General Warning – Trading involves the risk of loss and may not be suitable for all individuals. Past performance is not indicative of future results, and there can be significant differences between hypothetical and actual trading results. Deciding to trade represents a personal decision, and The Arch Public advises against investing money that you cannot afford to lose. This disclaimer does not consider your individual financial circumstances and is not intended as specific investment advice.

Acknowledgment - User’s acknowledge that all software is user driven and controlled by each individual trader, and not by Arch Public or any of its affiliates.