Gap Probabilities for Tuesday 7/13/2010
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These Probabilities Have lead to 100% Winning Trades so far!
Please note that the above factual statement does not mean that it is mathematically possible for this to continue for ever. Having said that, I believe this system will help you gain remarkable advantage over random trades.
For help with using this guide visit Fading Opening Gaps 101.
For trading in general, the best place I have found so far is
LBR Group
headed by market wizard Linda Raschke. Beware that most other sites are scams.
LBR Group
headed by market wizard Linda Raschke. Beware that most other sites are scams.
Yesterday's Forecast and Recap
Yesterday's Forecast:
Before Gap
Table -2 does not support any gap play for Monday. But Table -1 has strong values for opening above close and below the high of Friday(1071.75 to 1075.00). I will take this trade if the gap is equal or more than 1 point. Even though this is not supported by timing, the chance of winning is 81% with PF of 1.77 and there is no pivot points between the close and the high.
Table -2 does not support any gap play for Monday. But Table -1 has strong values for opening above close and below the high of Friday(1071.75 to 1075.00). I will take this trade if the gap is equal or more than 1 point. Even though this is not supported by timing, the chance of winning is 81% with PF of 1.77 and there is no pivot points between the close and the high.
According to Table - 3, if the market opens above the high (1075 ) or below the low (1064.25) and closes the gap, it is likely that the price continues in the same direction for an additional 4 points. I will take this trade also.
Yesterday's Recap:
Before Gap - ES opened at 1071, Below the prior day's close of 1071.75 and and above prior day's open of 1066.25 (in C-O zone). Win rate for this zone was 70% which is quite good. But Profit factor was 1.24 which was good but below my personal criteria of 1.30 threshold. I did not take this trade but the price moved up 6 points in 15 minutes. Anyway, according to my criteria of minimum 1.30 for PF, there was no trade.
After Gap - This trade would have triggered if the opening price was either in H or L zones. The opening price was in C-O zone so no trade triggered..Additional Comment: Don't be disappointed that this system has trade-able setups only for some days and even if we do have a setup, it may not triggered because the market does not open in a triggering zone. I expect to see only one or two trades a week and perhaps 5 or 6 per month. This is like digging gold and diamond hidden in the middle of tons of trash.
Today's Forecast Summary:
Before Gap
The only high probability area confirmed by both structure and timing is the H-C zone between 1077.25 and 1076.25 which is too narrow and probably will not trigger.
The only high probability area confirmed by both structure and timing is the H-C zone between 1077.25 and 1076.25 which is too narrow and probably will not trigger.
After Gap
According to Table - 3, if the market opens above the open (1071 ), probabilities are very good for this setup. We will have to wait for a move to close the gaps, then we enter in the direction of the move for 4 additional points. Because of low true range of market, stop is at 5.
Table - 2 Gap Fade Probabilities(based on timing)
According to Table - 3, if the market opens above the open (1071 ), probabilities are very good for this setup. We will have to wait for a move to close the gaps, then we enter in the direction of the move for 4 additional points. Because of low true range of market, stop is at 5.
Today's Data:
ES pivot points:
R3: 1094.75
Fib 1.618: 1084.00
R2: 1084.00
Fib 1.272: 1080.25
R1: 1080.00
High: 1077.25
Close: 1076.25
Pivot: 1073.25
Open: 1071.00
S1: 1069.25
Low: 1066.50
Fib 1.272: 1063.50
S2: 1062.50
Fib 1.618: 1059.75
S3: 1051.75
Fib 1.618: 1084.00
R2: 1084.00
Fib 1.272: 1080.25
R1: 1080.00
High: 1077.25
Close: 1076.25
Pivot: 1073.25
Open: 1071.00
S1: 1069.25
Low: 1066.50
Fib 1.272: 1063.50
S2: 1062.50
Fib 1.618: 1059.75
S3: 1051.75
Profit Target = Gap Close, Stop = 5 points.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Long | Long | Long | Longs | Shorts | ||
| PF | 1.06 | 2.68 | 0.22 | 1.38 | 0.41 | 0.89 | 1.40 | |
| PCT Prof | 58% | 81% | 46% | 67% | 27% | 58% | 67% | |
| Avg Loss | $269 | $167 | $179 | $253 | $227 | $251 | $228 | |
| Net Loss | $2,688 | $500 | $1,250 | $1,263 | $1,813 | $17,588 | $12,075 | |
| Loose | 10 | 3 | 7 | 5 | 8 | 70 | 53 | |
| Avg Win | $204 | $103 | $46 | $174 | $250 | $159 | $160 | |
| Net Win | $2,850 | $1,338 | $275 | $1,738 | $750 | $15,625 | $16,938 | |
| Win | 14 | 13 | 6 | 10 | 3 | 98 | 106 | |
| Avg P/L | $7 | $52 | $75 | $32 | $97 | $12 | $31 | |
| Net | $163 | $838 | $975 | $475 | $1,063 | $1,963 | $4,863 | |
| Total | 24 | 16 | 13 | 15 | 11 | 168 | 159 |
Table - 2 Gap Fade Probabilities(based on timing)
Profit Target = Gap Close, Stop = 5 points.
Copyright © Ali Mohseni 2010 Charts are created using Tradestation software.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Short | Long | Long | Longs | Shorts | ||
| PF | 1.09 | 1.27 | 1.82 | 0.64 | 1.11 | 1.14 | 1.05 | |
| PCT Prof | 55% | 80% | 82% | 37% | 53% | 68% | 67% | |
| Avg Loss | $289 | $299 | $297 | $243 | $272 | $288 | $330 | |
| Net Loss | $8,963 | $5,088 | $6,238 | $4,125 | $2,175 | $25,888 | $34,675 | |
| Loose | 31 | 17 | 21 | 17 | 8 | 90 | 105 | |
| Avg Win | $258 | $98 | $119 | $265 | $268 | $154 | $169 | |
| Net Win | $9,800 | $6,475 | $11,350 | $2,650 | $2,413 | $29,400 | $36,350 | |
| Win | 38 | 66 | 95 | 10 | 9 | 191 | 215 | |
| Avg P/L | $12 | $17 | $44 | $55 | $14 | $13 | $5 | |
| Net | $838 | $1,388 | $5,113 | $1,475 | $238 | $3,513 | $1,675 | |
| Total | 69 | 83 | 116 | 27 | 17 | 281 | 320 |
Table - 3 After Gap probabilities(based on Market Structure)
Profit Target = 4 points, Stop = 5 points. Conditional probabilities after the gap is filled.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Long | Long | Long | Longs | Shorts | ||
| PF | 1.87 | 9.20 | 1.83 | 1.02 | 100.00 | 1.59 | 1.41 | |
| PCT Prof | 70% | 92% | 75% | 58% | 100% | 68% | 64% | |
| Avg Loss | $250 | $250 | $250 | $250 | $0 | $252 | $244 | |
| Net Loss | $750 | $250 | $500 | $1,250 | $0 | $8,075 | $9,025 | |
| Loose | 3 | 1 | 2 | 5 | 0 | 32 | 37 | |
| Avg Win | $200 | $192 | $152 | $182 | $200 | $191 | $192 | |
| Net Win | $1,400 | $2,300 | $913 | $1,275 | $600 | $12,800 | $12,700 | |
| Win | 7 | 12 | 6 | 7 | 3 | 67 | 66 | |
| Avg P/L | $65 | $158 | $52 | $2 | $200 | $48 | $36 | |
| Net | $650 | $2,050 | $413 | $25 | $600 | $4,725 | $3,675 | |
| Total | 10 | 13 | 8 | 12 | 3 | 99 | 103 |
Good luck and please direct any questions or suggestions!
Copyright © Ali Mohseni 2010 Charts are created using Tradestation software.
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