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Trading Gaps Trading Gaps: Hubert Senters
Trading Gaps Trading Gaps: Hubert Senters
Trading Gaps
Hubert Senters
www.TradeTheMarkets.com
Homework and Market Research
Homework and Market Research
• Must keep Separate
Must keep Separate
• Dr. Jeckel and Mr. Hyde
• Have little to no value for intraday trading
li l l f i d di
• No preconceived Notions
• Kill your Decisions, Performance and P&L
Action Item
Action Item
• No News Feeds for 30 days of any kind.
No News Feeds for 30 days of any kind
• If you mess up and slip up.
• Restart at Day Zero (0)
(0)
Wake Up late to get Ahead
Wake Up late to get Ahead
• Try sleeping in…
Try sleeping in
• Might not work for all but try it.
• If you are a early riser No news of any kind
f l i f ki d
• If you want to do some thing exercise, read,
work on other business, or look at markets pre
market to see how they act.
Globex High and Low
High and Low
• Pre
Pre market
market
• Make note of high and low
• TradeStation
d S i h has a built in indicator
b il i i di
Avoid Land Mines
Avoid Land Mines
• Econoday
• fidweek.econoday.com
• S
Scan Note important news Items
i
• For currencies use
• http://www.dailyfx.com/calendar
Action Item
Action Item
• If Flat Prior to number stay that way.
If Flat Prior to number stay that way
• If in a position and have no cushion Exit.
• If in a position and have enough Cushion stay.
fi ii dh h C hi
• If unsure Exit
Good Morning Sunshine
Good Morning Sunshine
• Wake
Wake at 9:20 a.m.
at 9:20 a m ‐ 9:10 a.m. at the earliest
9:10 a m at the earliest
• Head ups turn off Windows auto update
feature
• Have machine prepared and all ready on.
First Things First
First Things First
• Is there a gap?
Is there a gap?
• If so up or down?
• What day of the Month is it? Last first OEX
What day of the Month is it? Last first OEX
• What day of the week is it?
• H Bi i th
How Big is the gap? ?
• Is it near a daily Pivot?
• Color of TTM Trend
• How do I feel about the Trade?
How to set up a Gap Chart
How to set up a Gap Chart
• @YM.D
@YM D
• Sessions, Other sessions
What is the probability of a gap fill (total) and which
d
day of the week is a gap fill most likely?
f th ki fill t lik l ?
•On average 76% of all gaps close at some point during the same Day.
• Mon‐ 65%
• Tue ‐ 77%
Tue
• Wed‐ 79%
• Thu‐ 82%
Thu
• Fri ‐ 78%
What size gaps are most likely to close?
What size gaps are most likely to close?
1pts 93% 13pts 56%
2pts 90% 14pts 33%
3pts 82% 15pts 0%
4pts 86% 16pts 0%
5pts 60% 17pts 100
6pts 77% 18pts 50%
7pts 71% 19pts 50%
8pts 54% 20pts 0%
9pts 55% 21pts 0%
10pts 40% 22pts 100%
11pts 45% 23pts 0%
12 t
12pts 60% 24 t 50%
24pts 50%
Caution
• OEX Friday drops ‐2% 78 to 76
• Monday after OEX ‐13% 65 to 52
• Rollover Thursday ‐7% 82 to 75
• Friday after Rollover ‐15% 78 to 63
• Fi t S i
First Session of Month
f M th 56%
• Last Session of Month 85%
• Half Gap Fill
Half Gap Fill 80%
• Large Gaps Use 25% stop loss
• Large gap use less size
Large gap use less size ½ or ¼
½ or ¼
What is the probability of half the gap
filli ?
filling?
• This is my favorite gap play 80%.
• If you trade a lot of gaps just cut at least ½
loose at ½ a gap fill you will be happier
loose at ½ a gap fill you will be happier.
Gaps and the Pivot Point and Support and
Resistance Levels
i l
• Price Opens price at certain levels Total% Closed
• Over R3 100%
• R2 to R3 33%
• R1 to R2 62%
• PP to R1 82%
• S1 to PP 79%
• S2 to S1 57%
• S3 to S2 60%
• Below S3 000
Trading With TTM Trend
Trading With TTM Trend
Hubert Senters
www.TradeTheMarkets.com
Gap up look at TTM need 2 to go short and or a tick hook
Still got you first 10 point before it reversed on you
Part 1 @9:30 am this is what the gap looks like
Part 2 TTM turn Blue Step up go long.
Heikin Ashi
Heikin‐Ashi
Average bar
Average bar
• haClose = (Open + High + Low + Close) / 4
• haOpen == (haOpen(previous bar) +
(haOpen(previous bar) +
haClose(previous bar))/2
• haHigh = Maximum(High, haOpen)
Maximum(High haOpen)
• haLow = Minimum(Low, haOpen)
What is it doing
What is it doing
Trading Ambush Set Up
Trading Ambush Set Up
Hubert Senters
www.TradeTheMarkets.com
Scalping, Tape Reading
and Order Flow
Hubert Senters
www.TradeTheMarkets.com
Internet connection
Internet connection
• DSL
DSL.
• Cable.
• Fiber.
ib
• VPN.
• You don’t need a T1.
Fast PC
Fast PC
• Fastest on you can afford.
Fastest on you can afford
• Dell
• Xview.
i
Best Software for Scalping
Best Software for Scalping
• X Trader Trading Technologies.
X Trader Trading Technologies
• Infinity AT / Transact.
• Ninja with Zen Fire or TT backbone.
i j ih i b kb
• Photon Trader
• CQG Trader
• Dorman/Cunningham
Do the Math
Do the Math
• 1YM =$5
1YM =$5 $7RT
$7RT
• 1YM =$5$5RT
• 1YM=$5
$ $4.25RT wholesale retail
$ 2 h l l il
• 1YM=$5 $2.85RT now you are taking
Lease Or Buy CBOT
Lease Or Buy CBOT
• IDEM CBOT
IDEM CBOT
• $2000 one time fee
• $ $88
$75‐$88
• Lowers cost by $1.40
• Buy 30k‐35k
• Lowers even more less than $1 50 RT
Lowers even more less than $1.50 RT
Lease Or Buy CME
Lease Or Buy CME
• 106 F
106 F
• 106H Firm
• $2000 O
$2000 One time fee
i f
• ECM 106R also has volume requirements.
• 25 RT a Day
• ‐1
1.04
04
Best time to Scalp
Best time to Scalp
• Anytime but you need movement
Anytime but you need movement
• 9:30‐11:30
• 2 30 00
2:30‐4:00
• Stay away from 4:00‐4:15
Best time frame
Best time frame
• 1 min
1 min
• 2 min
• 2 i k
25 tick
• 50 tick
10 Min Charts
(10) 1 min Bars
Clear advantage Play Rotation
Traders Audio
Traders Audio
Hubert Senters
www.TradeTheMarkets.com
Who We Use
Pit Noise
Guide lines on how to use it.
• 6 20 by ½
• Means 1136.20 X 1136.50 bid ask spread of the big SP
contract.
• Paper is a retail order like GS MER.
• Local market the locals are just trading among themselves
light action.
• Thin Top means there are not a lot of Bid up here look for top
to fail.
Pit Noise
Guide lines on how to use it.
• If you hear some one being a scale buyer or sell pay
y g y p y
attention to what they are doing and where.
• If noise explodes fade it.
If noise explodes fade it
• If
If noise get gradually louder go with it till it explodes
noise get gradually louder go with it till it explodes
then exit.
• If some on is above or below the market with size
and local fill him go with it.
Pit Noise
Guide lines on how to use it.
• If pit moderator tell you what the low is and you are
p y y
close to it has a good chance of going lower.
• If
If pit moderator say look for a stop run at 1136 pay
pit moderator say look for a stop run at 1136 pay
attention to that number if you are below it.
• Don’t get caught up in the excitement.
• It will take about 2 months of solid listen to get use
to a lot of the thing about pit noise but I cant trade
with out it.
FREQUENTLY USED SQUAWK BOX TERMS:
BOOK: Buyers that have actual resting orders to Buy below the market and Sellers that have resting orders to Sell above the
market at any given time. Currently the CME feed shows orders five (5) ticks above and below the current price. These resting
orders are known in the industry as the "book"
orders are known in the industry as the book .
BUY PROGRAMS: Using our proprietary Program Trading Indicator, we alert you to automated programs used by institutions that
cause buying in the E‐mini S&P Futures.
SELL PROGRAMS: Using our proprietary Program Trading Indicator, we alert you to automated programs used by institutions that
g p p y g g , y p g y
cause selling in the E‐mini S&P Futures.
BID: The current price you would get if you sold at market
INSTITUTIONAL: Trade Size Lots of 200 contracts or more
OFFERED: This means offered for SALE.
This means offered for SALE 100 Offered at 50 means 100 contracts offered for sale at
100 Offered at 50 means 100 contracts offered for sale at 1445.50
1445 50
If you hear a big offer, this means someone wants to sell a big number of contracts above the market
THIN: Volume is light.
g
BEST: Highest bid or lowest offer at that given time.
PULLS (OR PULLED): When an offer or bid quoted gets cancelled/withdrawn
FADING or FADES: Going the opposite way of the move or trend
PRINT: A price that is actually traded and sent out (printed) to real‐time data
SMALL: Small car or contract lot.
Small car or contract lot Not a big trade.
Not a big trade
LIGHT: Same as above
TEN TIMES: Ten contracts
FIFTY TIMES: Fifty contracts
Hubert Senters
www.TradeTheMarkets.com
Candles vs. Line on Close
Hook 1‐2
Extreme Positive Ticks
95