Suppose a day opens gap up and you decide to buy at the open and sell at the close. Similarly, on a gap down day you decide to short at the open and cover your short at the close. What would be your success rate like?
Take a look at the above table. On an average you would be successful around 45% of the time. The average return at the end of day would be around 1.1% -1.3%
Data based on Nifty Futures.
Note - This is a study on full gaps ( full gap up = today's open > Yesterday's high, full gap down = Today's open < Yesterday's low ). Similar study on partial gaps will be posted later.
Note - This is a study on full gaps ( full gap up = today's open > Yesterday's high, full gap down = Today's open < Yesterday's low ). Similar study on partial gaps will be posted later.
6 comments:
Hi SS
Very useful statistics, Thank you.
Visiting your blog after a long , long, long time. In fact every "long" represents an year.I find
Everything has changed.
Even I have changed , My methods have changed.The Only Thing That Never Changes is Change.
Keep up the good work.
Wow!!!
Dear Smarty, I just can't believe it! Great! Nice to hear from you after a very lonnnnnnng time!!! I'm really delighted!
How are things at your end and the indi forum? Haven't been there for some time.
Yes! The only constant thing is change!
Good one. Will mail you if I dig up your mail id.
Thank you,
Thank you SS
My new home
http://niftynirvana.blogspot.in
Have a look.
Looking forward for a long term association and meaningful interaction.
Does it also mean 55% success with taking counter trade (45% success with trend?
Regards
Vinod
Does it also mean 55% success with taking counter trade (45% success with trend?
Regards
Vinod
Vinod,
If we play this "game" for a long time then we will approach 45%
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