trading the gap

[sonny5]

Hello Trader

Can someone help with this question. I trade the gap specifically on Monday. How do you determine the close end of week trading. For example do you consider the official close for the AUSTRALIAN  200 INDEX AT 400 pm on Friday or the after hour close for the index to make a decision for filling the gap on Monday.

Your based on experience response is much appreciated.

 

 

[george2803]

i always use cash market closes for this

[backwardation]

You need to study your specific market closely.  I trade the DAX, where the cash gaps are a daily thing, but the futures gaps tend to be weekly.  Both tend to get filled, but in different 'ways'.  You also need to be cognizant of whether you are trading during open-outcry, in which case cash index is the dominant.

PS> Gaps are not always filled, Check out the gap near Gold's all time high (I've often heard there are a couple of large positions still open 8+ years, still hoping the price comes back).

[sonny5]

1 hour ago, george2803 said:

i always use cash market closes for this

Thanks George  Jut to confirm so you use the close of the normal trading session like from 1000 am to 400pm talking here about share indexe like DAX,aus 200 and wall st. You dont use the after market trading closes. 

[sonny5]

23 minutes ago, backwardation said:

You need to study your specific market closely.  I trade the DAX, where the cash gaps are a daily thing, but the futures gaps tend to be weekly.  Both tend to get filled, but in different 'ways'.  You also need to be cognizant of whether you are trading during open-outcry, in which case cash index is the dominant.

PS> Gaps are not always filled, Check out the gap near Gold's all time high (I've often heard there are a couple of large positions still open 8+ years, still hoping the price comes back).

Thanks , my question do you use the official closing price during normal tarding hours or the close for the after hours for indexes like DAX, WALL St etc....

[Caseynotes]

2 minutes ago, sonny5 said:

Thanks , my question do you use the official closing price during normal tarding hours or the close for the after hours for indexes like DAX, WALL St etc....

It's a difficult question to answer @sonny5, but I suspect it's best to use the price (gaps) on the IG chart if trading on the IG platform. IG get their prices from sources other than just the main exchange which has the Dow listed at the Friday 9pm (UK time) close price of 25983.94. Might be worth getting some stats to see if the exchange closing price is filled after Sunday and Monday London trading sessions but I would be be surprised if that was the case.