Gold Interday Gap Strategy

Compare the current session's open price to the previous session's close. If there's a significant difference ($5+ for gold), you have a gap. Your charting platform will visually show this as empty space between bars.

No. Only trade significant gaps ($5+ for gold) that meet your classification criteria. Small gaps may be noise and not worth the transaction costs. Focus on quality setups.

Common gaps typically fill within 1-3 days. Exhaustion gaps may take 2-5 days. Breakaway and runaway gaps may never fill or take weeks/months. Gap type determines expected fill time.

Use daily charts to identify and classify gaps. Use 15-minute or 1-hour charts for entry timing with opening range breakout. Monitor 4-hour charts for gap fill progress.

Breakaway and runaway gaps often don't fill because they represent genuine trend changes or strong momentum. When a fundamental shift occurs, price may not return to old levels for a very long time.

Use the classification framework: Look at location (start/middle/end of trend), catalyst (major news or random), volume, and technical context. Score each factor and the total guides your strategy selection.

Fade common gaps (random, no catalyst, in range) and exhaustion gaps (end of extended move). Trade continuation on breakaway gaps (out of pattern with catalyst) and runaway gaps (mid-trend momentum).

Very important. The opening range (first 15-30 minutes) shows how the market is digesting the gap. ORB in gap direction supports continuation; ORB against gap direction supports fill. Wait for this confirmation.

Weekend gaps are larger and more significant - apply full classification framework. Intraweek session gaps are usually smaller and often fill same session. Adjust expectations and targets accordingly.

Consider taking profits at 50-75% fill rather than always waiting for full fill. Statistics show full fills don't always occur, so locking in partial profits is often prudent.

Track all gaps historically: type, size, fill rate, fill time, market environment. Calculate fill probabilities by category. Build expected value model combining probability × reward - probability × risk to evaluate trade quality.

Trending: with-trend gaps rarely fill, counter-trend gaps usually fill. Ranging: most gaps fill. Volatile: larger gaps, less predictable. Quiet: smaller gaps, high fill rate. Identify environment first, then adapt strategy.

Gap-and-go (aggressive continuation), gap fill reversal (enter after fill), multiple gap analysis (unfilled gap targets), gap plus divergence (extra confirmation), gap trap (failed gap reversal). Use based on setup quality.

Track by gap type, strategy (fade/continuation), market environment, and day of week. Key metrics: win rate, profit factor, average fill percentage, fill time. Monthly review to identify patterns and refine strategy.

Gaps can extend unpredictably, so slightly smaller position sizes than trend following. Time stops important (2-3 days for fade). Maximum 2 gap trades open at once. Don't add to losing gap trades.