![]() ![]() And thx for those who continuously support me, more cool stuff is coming up.From the desk of Tom Bruni a saying among market participants that “all gaps need to be filled” or “all gaps are eventually filled”, but as with most market generalizations, this saying shouldn’t be taken at face value. Thx to LucF for helping with the "process_orders_on_close" element, since i had to use closing price i had to remove it tho, was afraid results would differ even more from a more realistic backtest. The advantage of this strategy against ones using technical indicators is that this one does not heavily depend on user settings, which make it way more efficient, this a big advantage of patterns based strategies. The results show that using invert option might be better. SummaryĪ strategy based on gap filling has been briefly introduced and tested with 3 tech stocks. Here the balance does not appear so heavily decreasing and even managed to reach back the initial balance before going down again. Like AMD the balance is heavily decreasing.įinally we will test the strategy on Seagate technology, a company mostly known for their mechanical hard drives. Not better, using invert would of course create better results. We will now test the strategy on NVDA, the company is one of the biggest when it comes to the Gpu market. Using invert would return positive results. We can see negative results, with an heavily decreasing balance. (by the way i have a bad feeling about it, hey ! feeling filling ! Lame jokes!) We'll be making our first analysis using AMD, who has recently formed a full reverse HS pattern, where the neckline has been crossed by the price. The analysis will be tested in different tech stocks with a main TF of 15 minutes with no spread and commissions applied. This option would reduce the number of trades. Reverse Position : This option close all previous position when a contrary position to the current one is opened.New Gap : This option close all previous position when a new gap has been detected.New Session : This option close all previous positions when the market is in a new session. ![]() There are various closing conditions available that the user can select from the "close when" setting. Positions are exited when the gap has been filled, which in the chart is show'n when the price cross the red level who act as either a take profit (invert = false) or as a stop loss (invert = true). When invert is set to true gaps are considered to be runaway or break away gaps, therefore the contrary positions are opened. When the setting invert is set to false the strategy interpret the detected gaps as being exhaustion gaps, therefore when an up gap occur a short position is opened, when a down gap occur a long position is opened. In this strategy, the significance of a gap is determined by the position of the opening price relative to the previous high/low and make sure the bar following the gap don't fill it. Significant up gaps will have an opening price greater than the previous high, while significant down gap will have an opening price lower than the previous low with both high volume accompanying them.Īfter a gap, when the price go back to the point previous to the gap we say that it has been "filled", this characteristic is what will be exploited in this strategy.
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