Gold Interday Gap Strategy

Not all gaps fill, and even those that do may take days, weeks, or months. About 70-80% of common gaps fill within a few days. Breakaway gaps may never fill as they mark new trend starts. Trading gaps requires accepting that some won't fill.

Main weekly gap: Weekend (Friday 18:00 to Sunday 23:00 GMT). Session gaps can occur at Asian open (00:00 GMT), London open (08:00 GMT), and US open (13:30 GMT). News gaps occur around Fed decisions, NFP, CPI releases.

No. Choose strategy based on gap type: Common/exhaustion gaps = fade. Breakaway/continuation gaps = trade with gap. Evaluate news catalyst, gap size, S/R levels before deciding. Some gaps should be skipped entirely.

Most gap fills occur within the same session (4-8 hours) for small gaps. Medium gaps may take 1-2 days. Set a time stop: If not significantly filled within your timeframe, exit. Holding indefinitely hoping for fill is risky.

For fade strategy: 0.2-0.7% (about $4-14 on $2000 gold) is optimal. Smaller gaps have tiny profit potential. Larger gaps are less likely to fill quickly. For continuation: 0.5%+ gaps with catalyst work best.

Common: No catalyst, random drift, likely fills. Breakaway: Breaks S/R with catalyst, starts new trend. Continuation: Within trend, extends move. Exhaustion: End of trend, RSI extreme, quick fill. Look at news, levels, trend, and RSI.

Volume at gap: High = conviction (may continue), Low = weak (likely fill). Post-open volume: Moving toward fill = fade working. Moving with gap = continuation working. Use volume as confirmation, not primary signal.

Major news (Fed, CPI) gaps often continue rather than fill - they represent fundamental shifts. Minor news gaps may still fill. Either trade with major news gaps (continuation) or skip them. Don't fade major news gaps.

Fade: Stop beyond gap extreme + buffer (e.g., gap high + 0.5× ATR). If gap extends beyond this, fade thesis failed. Continuation: Stop below gap open level (longs). The gap open is key level for continuation validity.

Take partial profit (50%) at partial fill (50% of gap), let remainder run to full fill. This locks in gains on partial fills, which are common. Example: Gap $10, take half at $5 fill, trail rest to full $10 fill.

Gap and Go trades continuation with momentum confirmation. Requirements: Gap holds 30+ min, MACD/RSI confirm direction. Entry: First pullback after gap holds. More selective than plain continuation, higher probability when momentum aligns.

Define: Gap measurement (minimum size). Classification rules (type criteria). Entry rules (fade vs continue, confirmation). Stop rules (beyond extreme). Target rules (prior close for fade, S/R for continue). Backtest 5+ years.

Price gaps one way, trades in range, then gaps opposite way - creating isolated 'island'. Strong reversal signal. Trade: Enter in second gap direction after pattern completes. Stop beyond island. Target: Extended move in reversal direction.

Defined risk gap trades: Buy call for gap-down fade, put for gap-up fade. If gap extends, max loss = premium. Straddles before weekend: Profit from large gap either direction if move exceeds premium. Useful for uncertain/large gaps.

Gap appears bullish/bearish but reverses within 30-60 min, trapping chasers. Trade: Wait for trap confirmation (quick reversal past gap open), then enter reversal direction. Target: Gap fill and beyond. Strong reversal pattern.