Another Huge Opening Gap Foils Gap Trade

Today was always going to be difficult for the opening gap trade and it was inevitable that mnGapAutotrader would be stopped out with all the major index futures.

The trading day after the 4th July holiday is always tricky as the market has three days of news and developments to absorb. It’s almost like it has to expend the energy it saved on the holiday in one big blast.

Well we saw that with the size of the opening gap on the major index futures today. In fact the opening gap was so huge that it engulfed the pivot point, R1, R2 and R3! There is almost no chance at all that price could retrace through all three of those strong support lines, unless news emerged to shake the market in a major way.

We’ve discussed the importance of pivot points on the success of fading the opening gap before and we actually did not put any capital at risk with our trading system today for that reason. It is important that we publish every real trading result (today using a papertrade account with our broker) for complete transparency with our users and potential users.

The one small plus point of todays trading result is that even though the automated trading system had almost no chance of success, it’s integral money management prevented a catastrophic loss and keeps us in the game.

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