How to trade Gap Down?

Now a days, intraday traders are getting trapped in BNF. Its a cyclic phase where BTST or STBT traders are minting huge rewards but intraday is having least opportunities for ling time. Index either opens huge gap up or down & then either goes in opposite direction or consolidates. So how do we trade these days?

Idea is simple. Remember the more you keep it simple, more interesting will be the rewards!! So if it consolidates, lets wait till important level break or VWAP break on either side with volume. It is important to mark 2-3 days H/L levels for sudden reversal or S/R.

Example – On 10th Nov 22, we had kind of sideway day without a clear trend. It was trading in a narrow range. Every dip was getting bought & high was getting sold. If observed carefully, on 5 Min TF chart was having lower lows & lower highs. Hence ideal trade strategy would be to short at VWAP or important rejection level.

We entered in both Call & Put trades. PE trades were entered at VWAP & range breakdown. Towards noon, when BNF fallen to day’s low, there was 200 EMA support on 15 min TF. BNF reversed exactly from same point & it closed near day high. We entered CE trade post it crossed VWAP with volume & day target was done with ease!

BNF Trade entries on 10th Nov 22. Entered in both PE & CE trades as per important S/R Levels. One of our small a/c order book snap attached.

Leave a Reply

Related Post