Timothy Sykes
@timothysykestrader·479K subscribers·3.4K videos
"Gap and Crap" Trading Pattern? What Does It Mean?
Posted
February 25, 2019
Views
39,263
Likes
1,256
Comments
146
Engagement
3.57%
February 25, 2019
39,263
1,256
146
3.57%
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TITLE: What Are ‘Gap and Crap’ Patterns?
DESCRIPTION:
People often ask me about these two patterns: ‘gap and crap’ and ‘buy the rumor, sell the news.’ Get ready to take notes!
These two common patterns can be a little counterintuitive, so let’s break it down to help you better understand them.
A gap in a chart can create an uptrend or a downtrend. A gap up in a chart can mean that there was good news overnight. A gap down can be a sign of bad news.
A ‘gap and crap’ generally focuses on good news. The stock gaps up but then craps out. This usually happens when a company jumps the gun on announcing the good news ... traders are prepared for the opportunity.
This leads me to the next phrase, ‘buy the rumor, sell the news.’ This is where you know about an upcoming catalyst or news event, and you buy the stock in anticipation of it.
Big caveat here: Steer clear of trying to predict earnings. There are just too many unknowns, like what will happen before a company reports, how the company will announce earnings, and how people will react.
That’s three variables — it's not just whether the earnings report is good or bad. Once you understand that there are multiple unpredictable variables, you know your time is better spent elsewhere.
Do you trade ‘gap and crap’ patterns? How about ‘buy the rumor, sell the news?’ patterns? Drop a comment below. I love to hear from you!
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Hey, it’s Tim Sykes, millionaire mentor and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that I've learned over the years. You can check out more videos right over there, and also click ‘subscribe’ so that you can watch all of these videos, get that knowledge and become my next millionaire student.*
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