[ubiestmea]

[ QUOTE ]
he does have a strategy, but i know he doesn't have any experience putting it into use, and frankly, the strategy sounds a little too good to be true.

Here's some statistics he gave me:

Gap fill chances during the week:

Monday – 65%
Tuesday – 77%
Wednesday – 79%
Thursday – 82%
Friday – 78%

Also, gap fill chances given initial gap:

1pt = 10 Dow Points
1pt – 93%
2pt – 90%
3pt – 82%
4pt – 86%
5pt – 60%
6pt – 77%
7pt – 71%
8pt – 54%


So I guess what I'm wondering is if gaps generally fill, why isn't everyone doing this?

Also, are there any quality investing forums with good content I could check out? Thanks again.

[/ QUOTE ]

Conspicuous by its absence is any mention of the size of the winning trades vs the losers. There are many trading strategies that rack up a high percent of small winning trades but the few losers are much bigger and wipe out all the profit from the winning trades. One of the more common things people have been doing that fit this profile is selling naked index puts, it works great until you get caught by a sell off. Just ask Victor Niederhoffer, rumor is he has now blown out his second hedge fund doing just that.