On today’s video I explain to you why the stock trade in Eaton Corp. ETN) that I outlined for you on Friday was not taken due to the gap above the entry. Be sure to watch today’s video because I feel it’s a valuable lesson you need to learn when trading stocks or ETF’s. Have a profitable day and I hope the video helps you.
Â Unexpected upturn for ETN
We were talking about the Stock on Friday Ecorp – Â ETN. Â We were looking to buy this market, ETN is a stock ticker. We were looking to buy above the highest inside pattern after the market came down from this high logical Support zone and an overall uptrend right?
Market Opening GapÂ – What to Do?
Little did I know the Market was going to get up through the high. Â I saw that about five minutes before the market opened and I pulled my order because when I take a trade either up through the high of an inside pattern or down through the low of an inside pattern I absolutely have to see the Market trade up through the high as opposed to a gap. Â I was looking to buy at $73.08. The market opened at $73.44. It opened up higher and I donâ€™t like the gap to trade up, Â and I donâ€™t like to get filled on the open when it opens up through my by point or down through my cell point. So I saw that and I canceled that order that you saw me place on Friday.
So I took a look at this and then I took a look at the intra-day chart. We will also look quickly at a five minute chart. The lesson of today’s video was If your looking to buy a penetration through a high or sell the market down through a low, you really want to see the market trade up through the high as opposed to a gaping up through it and buying on the automatically on the open. You never want to buy automatically on the open. Especially a stock. Up through a high or down through a low on a gap opening. I always, have to see the Market trade up through the high or trade down through the low. So thatâ€™s what filters out a lot of my trades.Â[Tweet “I always have to see the Market trade up through the high or trade down through the low. Thatâ€™s what filters out a lot of my trades. “]
Thatâ€™s one of the filters I use when trading stocks or ETFs, I need to see the market penetrate up through the high or down through a low if I’m looking to go short. I will never ever buy on the open or sell on the open– that’s just a suckers game. And so, buying it on the open you would have probably gotten filled way up. You would have been buying this market near the high of the day.
Again, to quickly reiterate, you want to see the market penetrate up through high or down through the low; never a gap up through a high or down through a low, especially on open. That’s what we’re talking about here on the open. Thatâ€™s when it Gaps.