Gaps are when no shares changed hands.  Gaps will most likely close, “eventually”.

Intraday Gaps – “Significance is often greater than that of many interday gaps.”  Thus, in the daily charts we will not always see the gap that may have broken over the continuation pattern (i.e., flag, rectangle) buy point.  More specifically, “Practically every emphatic breakout move from a strictly defined Rectangle or Right-Angle Triangle is attended by a gap, but only those few show up on the charts that occur at the day’s opening gong”. (Edwards and Mcgee, 230)

One of my dream trades is to find a “day-trade” that is first at 1:3 Risk/Return; which I hold overnight (and perhaps over a few weeks/month), that turns into a 1:70 R/R.  Which, in laymen’s terms, means if I risk $100 dollars on said trade, the end profit would be $7,000.  Or if you risk $1,000, for you ballsy nuts (punny), you’d make $70,000 in a month. 

Even better, you pyramid into said position and compound into the position… that’s my dream trade.  Granted, 1:70 R in one month is freaking near insane.  Thus, my dream trade.  Maybe one day I will be consistent with this style… dreaming. Don’t forget to add that $20 buck round-trip commission for our friends at Schwab.

 Quoted material taken from…
Edwards, Robert D. and John Magee. Technical Analysis of Stock Trends, 7th Ed.  Amacom: New York, 1997.

 By the way, my main trading style thus far are gappers (intraday), usually up (long).  I have a nasty long bias when trading… which I’d like to end, abruptly.

 More to come on gaps… maybe all four, but I prefer breakaway gaps and continuation/runaway gaps.  More on this tomorrow.

-Dan