This is a Simple Gap Indicator.
Version 1…Many Additional Features To Come.
***Designed for Intra-Day Charts.
***Great for Stocks…Forex and Sunday Night Gaps.
***Plots Green Lines If Gap Up
***Plots Red Lines If Gap Down
Additional Filters Coming Soon:
***Minimum Gap% Filter
***Gap Mid Lines
***Color Coding On Filled Gaps
//Created By ChrisMoody on 1-15-2015 //Version 1...More Features Coming Soon... study(title="CM_Gap_Indicator_Intra-Day_V1", shorttitle="CM_Gaps_Intra-Day_V1", overlay=true) tdo = security(tickerid, 'D', open) pdc = security(tickerid, 'D', close) pdh = security(tickerid, 'D', high) pdl = security(tickerid, 'D', low) gapUp = tdo > pdc ? 1 : 0 plotGapUpLine = gapUp ? tdo : na plotGapUpLowLine = gapUp ? pdc : na gapDn = tdo < pdc ? 1 : 0 plotGapDnLine = gapDn ? tdo : na plotGapDnPDC = gapDn ? pdc : na plot(plotGapUpLine, title="Gap Up - Upper Gap Line, Todays Open", style=circles, linewidth=3, color=lime) plot(plotGapUpLowLine, title="Gap Up - Lower Gap Line, Yesterdays Close", style=circles, linewidth=3, color=lime) plot(plotGapDnLine, title="Gap Down - Lower Gap Line, Todays Open", style=circles, linewidth=3, color=red) plot(plotGapDnPDC, title="Gap Down - Upper Gap Line, Yesterdays Close", style=circles, linewidth=3, color=red)
I like trades overnight or more because of account limitations (Pattern Day Trades). "Street Smarts, High Probability Short Term Trading Strategies" by Laurence A. Connors and Linda Bradford Raschke tells of "Whiplash" strategy would be opening gap with fill and reverse (todays session) triggering a trade near close for next day continuation. Those setups are easy to spot with this indicator. Looking at charts I trade would give myself more rules/filters before pulling trigger.
1. These are Opening Gaps. Opening Gaps are the only valid gaps with statistical data where people make a living from this one trade setup. The way the code is written it's designed to be placed on Intraday Charts...Not Daily charts.
2. As for the way you play gaps. I'm not going to go in-Depth now...but there are traders who have the statistical probablities of Gaps Filling based on Instrument, Day of Week, Week of Month, % of Gap Move etc. Something to look at is throw the indicator on a few symbols...and see what percentage of the time the Gaps are filled the same day!!!
Enough for now...more when I add to the Indicator.