Robert was a typical struggling day trader. Gap trading was never on his mind. Every day he went with the notion that he could pick his stocks with old fashioned research and time-tested strategies that would result in daily winners.
Then he found Warrior Trading on Twitter. Navigating over to the site, he started to really delve into all the strategies that Warrior was touting, from momentum trading to bull flag to gap trading. Gap trading seemed to be the most promising, so Robert immersed himself even more.
And this is what he learned about trading gappers.
First of all, it is a daily strategy. It is so rich with potential, you would be a fool not to use it every single day. Very simply, it is about finding gappers. What are gappers? They are stocks where the price moves sharply up or down, showing a “gap” in the normal price pattern. They represent excellent opportunities to make money day trading. If you can grab gappers at the right time and sell at a preset stop-loss mark, you can make some consistent money. Remember, this is all about discipline and repetition.
On Warrior Trading’s site, they describe a strategy that means searching for gaps of at least 4%, identifying the catalyst and buying them at pre-market values. That allows you to make money on them when they move.
Always look for gap stocks with low float. That is where the real opportunities lie. There is usually a very good chance that the entire float will be traded that day. The percentage gains on doing a gap & go with low-float stocks are enormous.
Robert learned importance of trading gappers pretty early in his Warrior training. And once he was able to master the strategy an institute some much needed risk management, he started to see some real profits with the gap stocks.
A word about catalysts: They could be earning announcements, massive layoffs, executive changes, really any type of big news about the company. Finding that catalyst is key to the decision about whether or not to pursue that gap stock. Gap trading is about math and reading charts, but it is also about being able to identify the right catalyst and use it to your advantage.
Robert was able to take what he learned from studying Warrior Trading’s gap and go strategy and turn it into real profits. Can you do that? Find out if you have the dedication necessary to make real money day trading.