How to Trade Large Gap-Ups 📈
Whether you’re holding positions heading into a large gap up or not, there are key principles to follow to protect your account and maximize your gains. Here’s how I approached last week's big gap up after the election and some tips for navigating these types of moves 👇
1. Be Patient: Allow the first 15-30 minutes for the market to settle.. Initial profit-taking often occurs at the open. You’ll likely see key levels retested before a continuation OR see if a gap up gets sold. IF you didn't have any positions into the open.. this is when and where you'll find key opportunities to enter
2. Focus on Strength: Target names with relative strength, strong news catalysts, or momentum from the previous session. These are the names more likely to hold their gap and continue trending. Ex: $NVIDIA Corp(NVDA)$ making new ATHs with $.SPX(.SPX)$ making new ATH'S
3. Stick to Your Plan: Maintain discipline. Follow your trade plan and manage risk. Don’t over-extend yourself, and size your positions appropriately.. Don’t let these types of days turn into big red days from you breaking your rules.
4. Maximize Trend Days: On strong trend days, create a systematic approach to locking profits and staying in your winners. My rollup strategy helps lock in gains while maintaining exposure to the upside. Learn more about my strategy here..
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