Knowledgebase
How do I enter a Trade when the price gaps? How do we know that the price has gapped too much?
Posted by Charlie Trader on 30 March 2018 04:00 PM

Your entry point should always be the high (for Long) or Low (for Short) of the consolidation or other pattern.  (Unless entering without a breakout)

If the stock has gapped by some way, then you do not have a trade.

If the stock has only gapped beyond your entry by a few cents, then it is at your discretion whether you want to enter the trade or wait for it to come back into the flag/pattern and look for a new entry opportunity.

Note that you can protect against gapping at a Brokerage by using a Stop/Limit order to open, where the Stop part triggers the possible trade and the Limit part controls the range of price movement in the event of a gap that you are happy to trade at.

Stop/Limit orders are not available for spread betters at this time.


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