Gap Up, Gap Down, Stop Sell and Stop Buy pending orders

Discussion in 'Stock picks and trading strategies' started by YourFriend, Jul 28, 2018.

  1. YourFriend

    YourFriend New Member

    Hi,

    I spoke with broker that I am using for trading different types of financial instruments. Our conversation was about four different topics:

    Gap Up
    Gap Down
    Stop Buy pending position
    Stop Sell pending position

    I am aware that most, if not all, Stock Events are based on two reasons for meetings only. Those two reasons Earnings Report and Dividends Report. Those are events that may move the trend a lot.

    My idea was to put on chart a minute or two minutes, before report goes public and its result causes movement on the chart, one Stop Buy and one Stop Sell pending order. Very close but not ''too close'' (to protect myself from last second unexpected movement before result of event causes the movement) to current market price. Then when either Earnings or Dividend report takes effect on chart, the trend goes either up or down via already added pending Stop order. Either ''touching'' it or bypassing it. Usually but not always uptrend, after event report, creates Gap Up and downtrend, after event report, creates Gap Down. Regardless if my Stop pending order gets ''touched'' or bypassed, it will be for sure executed (activated) in both situations. It doesn't matter if eiter Gap Up or Gap Down is formed after Stop pending order's location.

    I explained to the broker that my ULTIMATE GOAL are actually two:

    1. goal: pending Stop order must be executed on exact market price I chose when I was adding the pending order. So on exact location where pending order is located (price level). The only difference I may still agree with is the Slippage one. But even in this case, Slippage must not be anyhow dependent on gap, regardless if is gap up or gap down.

    2. goal: entire Gap Up or Gap Down area must be included in profit or in loss after pending order already gets executed REGARDLESS if that exact pending order price chosen in ''Pending Order Settings Window'' (before adding the order) was touched or bypassed. This is where big amounts can be earned (or lost) in small time. But since ''correct'' pending order was executed, its more ''earned'' than ''lost''. Possibility of success could be further increased hiring trading programming expert (developer) creating a script to automatically cancel the opposite pending order once the other one was executed - obviously on same trading symbol.

    Unfortunately broker told me: The only way to include entire gap up or gap down area (formed after event report takes effect on chart as a consequence of event) in profit or loss is to have position executed (active) BEFORE the gap is formed. If gap, either gap up or gap down, gets formed after my pending order then this pending order will be executed on the price where first next candle, after gap, is opened.

    I tired to find a solution using the most ''quickest'' chart (1M) instead of 1D (day per candle) but this is far away from being appropriate solution. The gap on 1M forms as fast as it goes on 1D. Impossible to catch it. Impossible to get position executed just a nano-second (not micro but nano) before gap occurs and impossible to even know in which way, uptrend or downtrend, will gap occur. So observing 1M chart instead of 1D won't work.

    Is there any alternative way to reach my TWO GOALS i described above?

    The only solution I thought of is taking a phone and make a call to the company, hoping to get internal ''in advance'' insider information but possibility to get in touch with correct person is zero. Besides this, small companies, e.g. some pizza delivery company, may not have any department being anyhow related to stocks.

    There is also one hope which could result in meeting my both wanted goals, although this is just a hope and not alternative to what i am looking for: If after ( * ) execution of pending order (that now becomes active), there is at least one single candle, regardless of time on chart (time per candle), then this will basically get me entire upcoming gap area into profit (or loss) - obviously only if gap occurs after this single candle is formed. Unfortunately that usually won't work because there is no candle between the gap and my pending order.

    * ''after'': this means above pending order if Stop Buy or below pending order if Stop Sell

    Would you be so kind to please tell me what else could I do?
     
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