The stock opens far from yesterday's close and keeps running in that direction through the first bars.
“Gap fills happen a lot, so if the gap starts filling in the first fifteen minutes, that is your answer: get out.”Jason Parker · Founder
A stock gaps 8% on an earnings beat or a headline, and instead of fading the gap, you're trading with it. The first candle or two after the open tells you whether the gap is holding: a strong open, a small pullback, buyers stepping back in. That's a gap and go. A weak open with an immediate fill back toward yesterday's close is a different trade, and it isn't this one.
| Entry | First pullback after the opening print that holds above the pre-market high, for a long gap |
| Exit | Partial profit into the first extension, trail the rest behind a short moving average |
| Stop | Below the low of the first five-minute candle |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
Gap fills happen, a lot. The stock that gapped up 8% and held for four minutes can be back to unchanged by 10am, and no chart pattern reliably tells you which kind of day you're in until it's already happening. Size small, and if the gap starts filling in the first fifteen minutes, that's the answer. Get out.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
For a long gap, the entry is the first pullback after the opening print that holds above the pre-market high. The stop goes below the low of the first five-minute candle, and the exit takes partial profit into the first extension while trailing the rest behind a short moving average.
Watch the first candle or two after the open. A strong open with a small pullback and buyers stepping back in is a gap and go. A weak open with an immediate fill back toward yesterday's close is a different trade. No chart pattern reliably tells you which kind of day it is until it is already happening, which is why size stays small either way.
It carries more risk than most setups on this site, since gap fills happen a lot and a stock that gapped up and held for four minutes can be back to unchanged by 10am. The wide-stop, smaller-size approach in the fact grid above is not optional here. Newer traders are better off starting with a setup that has a tighter, more structural stop, like the opening range breakout.
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