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 ------------------------------------------------------- Strategies ------------------------------------------------------- This strategy involves day trading or short term trading. Day trading requires that you exit your trades by the end of the trading session regardless of gains or losses. Remember, we look for stocks that are channeling between lows and highs over some period of time. These stocks are said to consolidating, as the investors are indecisive as to how the stock will perform. When stocks get ready to break out of their current pattern (up or down) the stock begins to demonstrate some atypical behavior. One attribute is it begins to demonstrate a Daily Gap in their price. You can actually earn a very nice return on this strategy alone! Consider a $50.00 profit a day for 20 trading days per month is a $1,000 profit. How is that for a part time job? 
Technical analysis of historical prices and price patterns are used to identify stocks for investing, when-to-buy, and when-to-exit. Stocks that are range bound or channeling are much more predicable than stocks that are trending up or trending down! The Daily Gap Cycle works because:
There are more than 200 technical indicators and when you consider the various parameters of these technical indicators the number of statistics to analyze becomes mind-boggling. Whentobuy.com strongly believes that some of these ratios are very helpful, but when you find yourself over analyzing the ratios tend be educated guesses. Five indicators that are obvious and offer solid data points are:
The Daily Gap Cycle looks at these data points and considers them to be the most reliable data points to analyze. 
The Daily Gap Cycle can be used as either a Bull or Bear investment. Whentobuy.com will identify the type of the stock demonstrating this behavior and whether it is a Bull or Bear trade. First, whentobuy.com finds stocks that have demonstrated a minimum of meeting the Daily Gap Cycle behavior by 90% or higher in that last ten trading days. Another way to look at this number is nine out of the last ten days the stock meets the behavior we expect for Daily Gap Cycle. Breaking down the Daily Gap Cycle strategy yields the following trade types:
Often times the best method of learning a topic is to view an example. We recently finished a twenty-three day run of making $50 on each day or a total of $1,150. The stock was ISIL (Intersil Corporation.) The company makes high-speed wireless LAN chipsets and other integrated circuits. Major customers such as Cisco, Compaq, IBM, Nokia, and Sony incorporate Intersil's PRISM wireless networking chipsets into their equipment. Intersil’s power management chips are used in PCs, servers, and storage networking gear. The chart below illustrates the price range for each of the twenty-three days of the Bear Daily Gap Cycle. The column in red (Difference Open To Low) illustrates our profit. Ok, so you notice that on some days the price went down by much more than $.50, in fact on the first day (1-22-2002) the difference from the opening price to the low of the day was $3.97. So, your question is why are we pulling out only a $.50 profit? Historical analysis of price and volume tells us that on average this stock had a 90% probability of attaining $.50 each day. You will notice there are some days where the price only attained $.53 and $.73. This strategy is purely a mechanical trade! That is a Sort Sell, in this case, is placed first thing in the morning followed by a Cover Short Order with a Limit Price of $.50 higher than the Opening Price. DO NOT GET GREEDY! The volume is sufficiently high on these trades and you simply do not have time to wait and place trades at a price giving a higher profit. The prices move very quickly and if the trade is not made as a mechanical trade you will lose money. Notice we do not care if the stock closes higher or lower than the opening price we are only pulling out $.50 on the daily price range.  
The Daily Gap Cycle strategy is used for producing limited profits on a daily trade. No matter what happens exit the trade at the end of each day regardless of gains or losses. If you do not make the expected $.50 then the cycle or pattern is broken. For example on 2-22-2002 ISIL only went down $.16, which signifies that price pattern has been broken. You would exit the trade at the end of the day and no longer trade ISISL. Whentobuy.com identifies one stock demonstrating a Daily Gap Cycle as a bonus selection each week along with our range bound stock selections. Subscribe now to our investment research and start earning your profits this week. Want to learn more? Join now!   Back | Swing Trading | Day Trading | Significance of Volume | Daily Gap Cycle | Overnight Average | Stop Loss | | Range Bound | Continuation | Strategies | Practice Trades | Performance | Cancel | Options | | Order Now | Return Home | Home Business | Digital Economy | Sign In | Disclaimer | Training Center | FAQ | What's New | Contact Us | |
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