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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Is "Mastering the Gap" the new suckers trap?

InvestorEducation / Learning to Invest May 11, 2012 - 02:17 AM GMT

By: Ron_Jaenisch

InvestorEducation

My email box is full offers for webinars that will teach me to master the gap. Some may provide useful information.

Could buying just because prices have filled the gap be a trap for uneducated investor that generates frustration and losses?


The above example is perfect to make a case for this. Prices gaped up and the day after investors jumped in as prices filled the gap. And then prices went up for a few more days and the upward momentum ran out of steam. All of this was predictable.

Unfortunately some investors’ place their stops just below their purchase and were stopped out after prices came down again. What is unseen to many investors is that when prices moves back down, the down move had a definable distance to go. This resulted in prices coming down again below their stops. This is all part of the ebb and flow of prices.

To the surprise of those who just got stopped out prices then gaped up which generated frustration on the part of the new investors. To make matters worse those that are gap theory enthusiasts probably had buy orders in after the gap past 115, only never to be filled.

The moral of the story is that there is so much more to learn about markets than just "mastering the gap" and perhaps there is a time to use gap theory and a time not to.

Ron Jaenisch, lives in the USA and his email address is RonJaenisch@gmail.com.

His website is www.Andrewscourse.com where the updated Advanced Andrews Course (with manuals and videos) can be ordered as well as a leather bound copy of the hidden cache Andrews techniques.  

© 2012 Copyright RCS   - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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