Timing Trade Entries

Timing The Gap Trade For Proper Entry

The gap trade is the most reliable trade because the gap closes nearly 75% of the time. Whenever the market opens at a price that is above or below where prices closed the previous session, the difference is called a “gap”. Because gaps are so obvious, even novice traders are aware of them whenever they occur, and gap openings occur often, which is fortunate because gaps close almost 75% of the time during the session. Therefore, gap trades offer a 75% opportunity to earn a profit.

But that doesn’t mean that every time a gap trade opportunity exists, you should just take a trade with confidence that the trade will work out in your favor. Even when the gap closes, there can be a significant amount of pullback prior to the trade actually working out, so it’s important to be able to time the trade entry properly in order to avoid being underwater and possibly stopping out.

Timing your trade entries is so important that it is a separate topic all by itself. Trades that are made correctly and based on careful observation of a setup (a signal that prices should move in a certain direction) can cause a loss if the trade entry is not timed correctly. The best timing for any trade is when prices move in the direction of the trade immediately when the trade is entered. Unfortunately this rarely happens, because unlike the setup, which is observable, timing is not as obvious.

The best a trader can do is to be cautious as to when to enter a trade and try to observe any signals the market may be providing as to when prices are ready to make their move. 

Anyone who wants to learn how to day trade S&P emini futures needs to have as much information as possible in order to help determine where to place a trade. Trading is not easy to do because it is impossible to know the future with any degree of certainty. But the market does give off signals and a wise trader needs to know how to interpret the signals. Market prices seem to move erratically, but with enough information, trading S&P emini futures can be done with a greater assurance of success. An S&P emini futures trader who has Information about market signals and knows how to use them makes knowledgeable traders much more successful than others who use “seat of the pants” method. 

Some of the information that S&P emini futures traders should have are:

1. The Trend
2. The Intraday and / or Low
3. The Calculated Trading Zone via Taylor’s Book Method
4. The daily calculated range
5. Support and resistance levels
6. Stochastics
7. Candlestick patterns

These are some of the bits and pieces of information every trader needs to have in order to assess a trade. Of course, that is not to say that even with all this information a trade will work out, but having this knowledge puts the odds of success more on the trader’s side.

Having as much information as possible gives S&P emini day traders a big advantage over “seat of the pants” traders. It cannot be stressed enough that without learning as much as possible about the market, it is highly unlikely that a trader will succeed at making money by day trading S&P emini futures, much less in a trading career.

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